Yahoo! still has hold on Alibaba

14:10, May 13, 2011      

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Yahoo! Inc still has a considerable say over Alibaba Group Holding Ltd after the Chinese e-commerce giant ceded ownership of its online payment business, said analysts.

Yahoo's equity interest in Alibaba's subsidiary, Co Ltd, was transferred to a separate company, which will control Alipay, in order to help expedite necessary approvals for a regulatory license to operate an online payment business, Yahoo disclosed in a filing to the US Securities and Exchange Commission on Wednesday.

The shift is to a company majority-owned by Alibaba's Chief Executive Officer Jack Ma. The move came following Alibaba's failed attempts to buy back a stake owned by Yahoo last year.

The relationship between the companies has been deteriorating, especially after Yahoo Chief Executive Officer Carol Bartz replaced co-founder Jerry Yang to take leadership of the company.

Yahoo owns a 43-percent equity interest in Alibaba, according to the filing.

Details of the transfer were not disclosed. Yahoo said Alibaba's management is still negotiating the economic terms of the restructuring with its principal shareholders, Yahoo and Softbank Corp, over the transfer of Alipay ownership.

Analysts said they do not expect Yahoo to lose ownership of Alibaba's other subsidiaries, especially, China's largest online retail site by sales.

"Yahoo will definitely not let go of the interests already in its hands," said Hu Yanping, general manager of the Beijing-based research company Data Center of China Internet.
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