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Alibaba, a Chinese based B2B portal, has broken its silence on the on going crisis in which Yahoo finds itself (see our complete coverage of the Yahoo drama). Alibaba group CEO Jack has issued a statement that no matter what happened to its major shareholder Yahoo, the company would maintain its independence.
While speaking at a press conference at the Second APEC Business Advisory Council SME Summit in Alibaba’s home city of Hangzhou Ma said:
As to the sale [of Yahoo], when this happened, I told the team, no matter what happens we will do things our own way. We are the people who make the decision. It will not change our vision. It will not change our independent management of the company.
Yahoo purchased 40% stakes in Alibaba in August 2005, in exchange for a cash transaction of $1 billion and handing over of Yahoo’s China unit to Alibaba. Yahoo still control those stakes, in addition to the 10% listed stocks. Alibaba has rapidly become one of the top Internet companies of Asia ever since its IPO in November 2007.
Alibaba Group also maintains Taobao.com, a consumer auction site, which competes with eBay in China. Ma has confirmed that Taobao will begin charging fees starting from October this year. The site which now controls 70% of the consumer-consumer e-commerce market charged no fees during its initial five years of operations. This is one reason that enabled the site to wipe out eBay’s dominance of the said market segment in China.
China has recently seen a surge in Internet economy and has taken over U.S. to become the largest Internet population on the planet. Given the growth trends in the Chinese markets, Yahoo’s stake in Alibaba alone would turn out to be quiet significant in case the American Internet giant manages to remain independent.
I believe a merge of Yahoo & Microsoft is not going to affect alibaba.