Yahoo! buys Alibaba stake
11 August 2005
Internet portal Yahoo! has agreed to purchase a sizeable stake in Chinese firm Alibaba.com for $1 billion in cash.
Yahoo! is acquiring a 40 per cent stake in the e-commerce company, enabling it to expand into the lucrative Chinese internet market. The agreement gives Yahoo 35 per cent control of Alibaba's voting rights, making it the company's largest strategic investor.
Alibaba.com is the biggest e-commerce internet site in China and under the terms of the deal, Alibaba will take control of Yahoo's Chinese internet operations. The merged business is valued at about $4 billion, according to the two firms.
The two companies announced in a statement that they would work together as an "exclusive" partnership to enhance Yahoo!'s presence in China and the partnership will create one of the largest internet companies in China.
Terry Semel, chairman and chief executive of Yahoo, said: "Together, we will create one of the largest internet companies in China, and our combined assets will makes us the only company that has a leading position in all the key sectors that are driving explosive internet growth in China, such as search, commerce and communications."
Jack Ma, chairman and chief executive of Alibaba, will become chairman of the new board. He commented: "Teaming up with Yahoo will allow us to deliver an unmatched range of e-commerce services to businesses and consumers in China. With the addition of Yahoo China to Alibaba.com's business, we're expanding our services to provide a leading search offering to China's internet users."
Alibaba operates online auction site Taobao.com and trading site Alibaba.com and its online payment system, AliPay, dominates China's online payment market.
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