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Yahoo buys US$1 billion stake in Alibaba
Yahoo Inc. signed a deal to buy 40 percent of Alibaba.com for one billion dollars cash while handing over the running of its China operations to the Chinese online retailer, AFP reported.
The investment is the biggest by a foreign company to gain access to China's 100 million net users and creates an e-commerce giant, with the combined entity valued at four billion dollars. It gives Yahoo 35 percent voting rights in Alibaba.com, making it the largest strategic investor in its Chinese partner. In return Alibaba wins the exclusive right to use and grow the Yahoo brand in China. The new company will be managed by Alibaba, whose chief executive Jack Ma will be chairman of the four-person board. Yahoo will retain one seat. "We don't look at this as Yahoo not being able to succeed on its own. Quite the opposite," said Yahoo chief operating officer Daniel Rosensweig. "We look at this as an opportunity to get much bigger, much faster, working with a great management team." Alibaba, founded in 1999 and based in the eastern China city of Hangzhou, is among a clutch of fast-growing Chinese Internet startups. It has a joint-venture partnership with Softbank in a popular Chinese online auction business, called Taobao, and owns online payment system AliPay as well as its flagship trading site Alibaba.com.
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