Feeds

Yahoo! gets! $7.1bn! injection! from! Alibaba! stake! sale!

Web biz flogs tasty slice of online tat bazaar

Remote control for virtualized desktops

Chinese e-commerce biz Alibaba has signed a deal to buy back half of Yahoo!'s 40 per cent stake in the company, marking the beginning of the end of their partnership.

The web bazaar will fork out $7.1bn (£4.4bn) for the 20 per cent holding with the option to grab back the remaining stake if it later goes public with its stock. Yahoo! will give up half of its stake now for at least $6.3bn in cash proceeds and up to $800m in newly-issued Alibaba preferred stock.

At the time it launches an IPO, Alibaba will either have to buy a quarter of the remainder of the holding or let Yahoo! sell the shares. After that, Yahoo! has the right to sell the rest of its stocks whenever it fancies as long as it's after the usual lock-up period directly after Alibaba's market debut.

The Chinese firm, headed by entrepreneur Jack Ma, has been trying for years to take back the stake that Yahoo! bought for $1bn back in 2005 as the partnership went sour.

Last year, the firms had quite the falling out over Alibaba's spinoff of its payment business Alipay. The Ma's team had chopped out the PayPal-like division the year before that, but Yahoo! decided it was ticked off about it and said that the transaction had happened without its approval.

The dispute was eventually settled, but it was another reason for Alibaba to seek a divorce.

Yahoo! also wanted the stake selloff, but has been holding out to squeeze the most it can get out of Alibaba. Yahoo! was under a lot of pressure from investors to sell its holding and put some money in their pockets.

Yahoo! said that it "intends to return substantially all of the after-tax cash proceeds to shareholders" once the deal is done.

Alibaba will continue to run Yahoo! China under the Yahoo! brand for up to four years as part of a technology and intellectual property cross-licence, which will also include the company stumping up $550m in royalty payments upfront and more money for the next four years. ®

Intelligent flash storage arrays

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
Verizon bankrolls tech news site, bans tech's biggest stories
No agenda here. Just don't ever mention Net neutrality or spying, ok?
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Simplify SSL certificate management across the enterprise
Simple steps to take control of SSL across the enterprise, and recommendations for a management platform for full visibility and single-point of control for these Certificates.