By now, I guess everyone in the industry knows how much Alibaba wants to get rid of its major shareholder Yahoo. Today, there is not much help Yahoo can provide to Alibaba. Their relationship got worse after Carol Bartz became Yahoo’s CEO. Bartz’s American style of management alienate Alibaba. Jack Ma’s previous relationship with Jerry Yang no longer count.
I was talking to a friend a few days ago. He was a former senior executive in Alibaba. He told me about Alibaba’s plan.
Yahoo has about 40% of Alibaba Group. My friend said Alibaba hopes to get it back and sold 20% to eBay and another 20% to a bank in China. Alibaba’s e-payment solution, Alipay, is getting more established everyday. So, it wants to have a Chinese bank as shareholder. Otherwise, it might get into trouble with the government in the future.
Recently , ebay started to collaborate with Alibaba. Its payment solution, Paypal, become the first choice for many Alibaba and Taobao traders when they want to develop international business. eBay’s CEO John Donahoe also became the keynote speaker in Alibaba Group’s Netrepreneur Summit in July.
My friend said many of the senior staff of Alibaba secretly hope that the transaction could succeed. It is because many of them hold equity in the Alibaba group (from staff options). These shares cannot be traded publicly. They hope if eBay or a Chinese bank invest in Alibaba group, they can liquidate some of their shares and cash out. Many of them have been with Alibaba since its early days.
Nevertheless, this will not be a easy transaction, involving so many parties, i.e. Yahoo, Alibaba, eBay, a Chinese bank. And Yahoo seems not eager to sell. Probably it is waiting for a better price, after Taobao’s IPO. Taobao was setup by Alibaba in 2003. It is China’s largest e-commerce market. Its public listing of is going to create huge upside for Alibaba’s shareholders.