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Home >> Business
UPDATED: 12:36, August 10, 2005
Yahoo! 'in talks' for stake in Alibaba
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The US Internet giant Yahoo! is reported to be planning to spend as much as US$1 billion to acquire the Chinese e-commerce company Alibaba.com.

Such an acquisition could alter the e-commerce market drastically.

Sources close to the Japanese investment giant SoftBank, investors of both Yahoo! and Hangzhou-based Alibaba, said yesterday that negotiations between the two companies are almost at the final stage.

It was said the focus is on details like contract conditions and prices.

The Forbes website said on Monday that Yahoo! is in talks to buy 35 per cent of the Chinese e-commerce company, which runs the business-to-business (B2B) website Alibaba.com and the customer-to-customer (C2C) website Taobao.com, for almost US$1 billion.

Alibaba claims it is the biggest B2B website in the world and Taobao is the biggest in Asia, competing fiercely with eBay in China.

It is said that media in southern China received same news tips at almost the same time from a certain source, which remained unknown.

Both Yahoo! China and Alibaba said yesterday they would not comment on such speculations.

SoftBank, which has over a five-year period invested US$20 million in Alibaba, was believed to be pushing the deal.

Jim Sun, an Internet analyst with the London-headquartered Evolution Securities, believed a successful deal would have a big impact on China's Internet industry, especially in the online auction market where eBay and Taobao dominate.

The Chinese operation of eBay also declined to comment.

Yahoo! China is expected to see its president Zhou Hongyi leave the post at the end of this month.

He founded the keyword search company 3721 and led Yahoo! China to increase revenue.

If he does leave, Yahoo! will have to find a key person to take over in China.

Alibaba, founded by a former English teacher Jack Ma, is expected to greatly elevate Yahoo! China's position in China's e-commerce market, although Yahoo! already has a C2C joint venture with the biggest Chinese Internet portal Sina Corp, which lags behind eBay and Taobao.

The Chinese firm may choose to reward its founders and investors with the sale of some stock. There is speculation it may be listed overseas.

The US$1 billion price for a 35 per cent stake puts the company's value at almostUS$3 billion, a price which Alibaba may not even get from a public listing, according to Sun.

Source: China Daily


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