

Yahoo sells 1/2 its Alibaba stake for $7.1B - bretpiatt
http://www.engadget.com/2012/05/21/yahoo-alibaba-stake/

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blhack
Wow, alibaba is actually a legit company? Every time it comes up in a google
search, I take a few glances at it, and it just _screams_ "spam, landing page"
at me.

Odd.

Has anybody here actually bought anything from them?

~~~
quink
> Has anybody here actually bought anything from them?

You don't really buy from Alibaba, you buy through Alibaba. The amount of
money we've spent to the Alibaba owned TaoBao is getting very scary indeed.
It's like eBay and Amazon combined, filled with a crappy ActiveX plugin
(Alipay) to pay - usually combined with a security token from either of the
four dozen or so big banks that one may be a member of - and any question you
may have pre-sales answered. Or post-sales too. It's what eCommerce should be
in the Western world.

To say that TaoBao is the eBay of China is under-exaggerating things by about
hundred-fold.

And it's a shame no one in the Western world has heard of it. It's Alexa rank
is... 14. And it's crazy to be assuming that Facebook is supposed to be worth
$100 billion, but Alibaba just $35 billion. It should be the other way round.

Also, if TaoBao ever decides to launch in the US, it's game over for eBay
definitely and beyond any doubt. It might survive as an exclusively craigslist
kind of thing. Amazon should be able to compete, but they will lose a lot of
market share.

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jayp
I doubt it would be "game over for eBay". If that were the case, TaoBao would
already be here.

What other countries does TaoBao operate in? eBay and Amazon both operate in
dozens on countries.

What works only in China works there only for a reason! Government
protectionism.

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quink
> If that were the case, TaoBao would already be here.

eBay didn't even try to go into wholesale, because Alibaba already has that
market, in the US, locked up tight. Like someone else said. Half the stuff in
your house was brokered through Alibaba.

> What works only in China works there only for a reason! Government
> protectionism.

I think it has more to do with shipping being basically nothing and a
willingness to do things both vertically and horizontally expansive.

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SeoxyS
So let me get this straight. Yahoo! is getting rid of the only successful
asset it has left?

Until right now, Yahoo! had two things going for it: its asian operations
(Alibaba, Yahoo! Japan, etc.), and the Hadoop project. Now, it only has one.

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DallaRosa
If they are to keep the asian assets, they may as well become an investment
bank because right now, asset management is the only thing that seems to be
working for them. If they still wanna be a technology company they really have
to get rid of the stuff that's getting in the way of them doing what they're
really supposed to do, which is tech.

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DigitalSea
Yahoo! must be getting desperate. While it was probably the best thing to do,
Alibaba is quite profitable is it not? It's worth something like $35B, crazy.

~~~
rdl
The relationship between Alibaba and Yahoo hasn't been great in a long time,
and there's substantial governance risk to owning a large stake in a Chinese
company which hates you. Owning 20% of a $35b company could be worth less than
$7b if they decide to make things difficult, and there is limited recourse. I
don't think this sale is being driven by Yahoo.

~~~
DigitalSea
Yeah, very true. It's probably best this sale went ahead then. If there is one
thing you don't do, its mess with the Chinese especially in the business
world. Yahoo! needs the cash anyway.

~~~
rll
Yahoo needs many things, but cash isn't one of them. They have no debt and
have billions in cash in the bank already that they don't know what to do
with. The only reason they are doing this is to appease shareholders. And in
that sense I suppose you could say that they need the cash, but short of doing
a one-time dividend payout to shareholders I don't think they have any idea
what they are going to do with it.

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bsimpson
> The deal, announced late Sunday in the U.S., will see Alibaba Group buying
> back the stake from Yahoo Inc.for $6.3 billion in cash and up to $800
> million of Alibaba preference shares.

I'm sure there's a sensible rational for it, but it sounds hilarious for them
to be selling their stock in exchange for a bit of cash and some more stock.

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Tuna-Fish
The preferred shares are likely callable at the option of Alibaba -- that is,
they have the right to buy them back at some defined price at any point in
time. They will likely exercise this as soon as they have the liquidity. It's
basically just a "we'll pay you 7.1B, some now in cash and 800M later",
without having to put debt on the balance sheet.

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rmason
Yahoo should take the money and go private. Yahoo has a market cap of 19
billion so they should be able to easily borrow the money.

They need to make some big changes to remain viable and imho the only way
they're going to be able to do it is out of the glare of the public spotlight.

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marme
I dont understand if Alibaba is planning on buying Yahoo why not just buy them
outright now and not worry about buying the stock back? If Alibaba bought
Yahoo would it not also not then own the Alibaba stock yahoo was holding?

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rll
Well, with this deal the Alibaba buyout of Yahoo is obviously off the table.

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marcus
So Yahoo without Alibaba is worth about $4.6 billion (18.8-14.2), subtract the
$2.1 billion cash and short term investments and you get a price tag of $2.5
billion for all of Yahoo's other operations and assets.

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DallaRosa
You forgot about the pretty high valued shares they have from Yahoo Japan.

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rll
And the value of the other Asian Yahoo properties that are fully owned by
Yahoo. Yahoo! Taiwan is by far the most visited site in the country, for
example. Well ahead of both Facebook and Google. Same goes for Hong Kong.
Obviously smaller markets, but one has to wonder what Yahoo! Taiwan/Hong Kong
would be worth as a standalone company. It seems to me that would easily be
$2B for just that part. Add that to Yahoo! Japan and Yahoo US is valued at
some large negative number.

