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Chinese firm has stake in MS/Yahoo deal

updated 11:40 am EST, Mon February 18, 2008

Alibaba Stake in Yahoo

Any potential Microsoft takeover of Yahoo is likely to require dealing with Chinese mega-reseller AliBaba before it can go ahead, says a source purportedly close to the latter company. As Yahoo owns nearly a 40 percent controlling stake in AliBaba, the Chinese firm is said to be pressing for greater influence from its management in any potential deal between Yahoo and an interested buyer, particularly in managing the transfer of shares.

While executives at AliBaba are said to assume Microsoft will complete its $44.6 billion or higher bid, the company is concerned that its senior staff may lose control if Microsoft is successful. Chinese rules and social customs may also come into play as foreign companies are often discouraged from obtaining commanding positions in native firms, which could happen if Microsoft chose to replace AliBaba's executives with their own.

Publicly, Yahoo has rejected Microsoft's bid with the argument that it undervalued the search engine developer, though it did not mention whether the Microsoft offer would significantly reorganize Yahoo itself or related firms like AliBaba.

by MacNN Staff



  1. Feathers

    Joined: Dec 1969


    alibaba and the...

    AliBaba should be quite happy with the forty thieves at Microsoft (and that's a conservative estimate)! Sorry... couldn't resist!

  1. njfuzzy

    Joined: Dec 1969



    I'm confused. If Yahoo owns part of Ali-Baba, and not the other way around, then why should Ali-Baba get a say in the acquisition of Yahoo? It sounds like they have the hierarchy confused.

  1. testudo

    Joined: Dec 1969


    Re: confusing

    Because they probably feel that, somehow, they're an interested party, since MS would become their new 40% owners. If there's anything in the purchase/ownership agreement on transfer of the stock, then they probably have a say.

  1. dslund

    Joined: Dec 1969


    AliBabaHoo?? :)

    AliBabaHoo?? If I can be first in suggesting a new name? :)

  1. UberFu

    Joined: Dec 1969


    good for yahoo!

    Ballmer is an Idiot!

    I just like saying that - rolls off the tongue - has a nice ring to it_

    More and more you see M$ sliding down from the top of the Mountain_ This one more grasp at loose sand as with the whole Vista Windows 7 debacle_ As they haven't been able to establish the same dominance they had in the desktop arena and are being outsed by both Google and Yahoo! in the online market_

    The bullying tactics of old days - as someone mentioned above - this worked in the 80's as the general public was more unaware of events playing out_ news was not near instantaneous or accessible via - networked information - PDAs - internet - cellphones - etc... But also M$ did not really try to take on a larger corporation of this magnitude_ It's not like they tried to acquire Enron or Apple or IBM_ Somehting big and prominant as they are attempting now_ Yahoo! is well enough to rival M$_ It's not like it's "Billy Bobs Unknown Search Engine dot Com"_ this is like Coke trying to buy Pepsi or Boeing trying to buy Lockheed_

    Ballmer is mis-handling this greatly and might be M$'s undoing on this endeavor_

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