Original URL: http://www.theregister.co.uk/2011/10/03/alibaba_wants_yahoo/

Alibaba! wants! to! be! Yahoo! purple! prince!

Would acquire a third of itself as part of the package

By Kelly Fiveash

Posted in Financial News, 3rd October 2011 12:58 GMT

The boss of Alibaba, which is part owned by Yahoo!, wants to be handed the keys to the Purple Palace.

Jack Ma told a gathering of people at Stanford University that his Chinese e-commerce company would be "very interested in Yahoo!", Reuters reported.

Alibaba runs domestic Chinese and Japanese services and also operates a bit like eBay for small businesses that want to get stuff made in the People's Republic.

Ma, who plans to set up shop in San Francisco over the next 12 months to gain a better understanding of the market, said he was keen to acquire the "whole piece of Yahoo!" and not just the stake the US company owns in Alibaba.

He brashly added: "China is already ours, right? It's already in my pocket."

Ousted and apparently "fucked over" Yahoo! CEO Carol Bartz, who was infamously fired last month over the telephone by the company's chairman Roy Bostock, had seen relations between Alibaba and Yahoo! sour during her tenure.

In 2005 Yahoo! spunked a $1bn investment on a 35 per cent stake in Alibaba, which was founded by one-time English teacher Ma in 1999.

The company's eBay clone is called TaoBao and it also ran a PayPal-like service called AliPay until it was spun off in August 2010.

That was a move that belatedly upset Yahoo!, which only told its investors in May this year about the spin-off of the AliPay biz.

It said at the time that the transaction had occurred without "the knowledge or approval of the Alibaba Group board of directors or shareholders".

Alibaba, which floated a $26bn IPO in 2007, disputed that claim, and said it had first discussed the plan in a board meeting in 2009.

Yahoo!, Alibaba and Softbank signed a framework agreement in July this year to settle the long-running row over Alipay. The deal gave Yahoo! and Softbank a chance to benefit from any future flotation or sale of Alipay, with the minimum amount payable set at $2bn and the maximum $6bn.

A little over a month after that agreement was struck Bartz was sacked. As of today Yahoo! is still searching for a replacement and the company's founder Jerry Yang said last month that his ailing business was not up for sale.

But Ma is hopeful that Alibaba can acquire Yahoo! "We are probably one of the very few companies that really understand Yahoo USA very well," he said, before adding, "We are very, very interested". ®