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Speaking on Friday at the China 2.0 conference held at Stanford University in Silicon Valley, Jack Ma, the Group Chairman and CEO of Alibaba revealed his intentions for Yahoo. When asked a direct question, “Are you going to buy Yahoo?” his answer couldn’t have been more enlightening, “We are very interested” he said.
For the first time, in a long time, we have a clear indication of what could happen with the whole Yahoo/Alibaba saga. This could possibly draw a line under what’s been a less than amicable commercial partnership in the last couple of years.
The most recent news coming from Yahoo HQ was the firing of their then Chief Executive Carol Bartz last month. The sacking was brought about as Yahoo struggled to increase its market share despite her changes to focus on content [See: Yahoo Increasingly Looking to Content to Fill Search Void].
A lack of direction saw advertisers leave the company and the shareholders were beginning to get restless over their ‘appropriate compensation’ for the sale of Alipay, which Yahoo partly owned through their shares in Alibaba [See: Yahoo Cagey Over Alibaba Affair]. In fact, the situation with the sale of Alipay really soured Yahoo’s relationship with their own shareholders and also their relationship with Alibaba. The financial consequences of the Alipay deal hindered the value of Yahoo’s investment in Alibaba; as a result shareholders wanted compensation.
At the time of Bartz’s sacking a buyout was ruled out. Jerry Yang, the co-founder and former chief executive said the company was not up for sale, but it’s believed they have since reversed this decision and have been looking at potential options.
Karen Swisher, writing for All Things D, explained that at the conference Ma said, “Our Alibaba group is important to Yahoo and Yahoo is important to us….All the serious buyers interested in Yahoo have talked to us.” This means they are not the only ones looking to buy out the ailing internet company, in fact according to Bloomberg, there is talk of a possible joint bid between the private equity firm Sliver Lake, Russia’s Digital Sky Technologies and Alibaba themselves. For Ma though, it’s believed he wants to be the principle buyer. When asked which parts he was interested in, his response was the “Whole” company.
For Yahoo’s shareholders, this presents a huge opportunity to cash in on their shares, as Ma is keen to take control. It’s not absolutely clear exactly how much he would be willing to pay, but considering Yahoo has a good portion of the Asian market not to mention a considerable amount in the US, he could be forced to pay a little more than expected. This is especially true if you consider that Yahoo’s shareholders, who have previous with Ma, would probably want to hold out for more than their fair share (no pun intended).
So the future of Yahoo indeed looks uncertain, but this is down to Jack Ma and if he can make Yahoo an offer they can’t refuse. As long as they get what they want, Ma can take his e-Commerce giant to pastures new, but the question is, how much is he willing to pay? And, is anyone else interested (AOL perhaps)?
Samantha Noble is well known within in the search industry, she even won the UK Search Personality 2016 at the UK Search Awards in November. This year, she continues to make an impact on the industry by judging not only one, but three, prestigious industry awards.