This year’s list also highlights positive developments since the issuance of the previous Notorious Markets Review in December 2011. For example, Chinese site Taobao, has worked with rights holders to significantly decrease the listing of infringing products for sale through its website, and has committed to continue working to streamline its complaint procedures to further reduce listings of counterfeit products.
According to sources close to the situation, Yahoo will officially close the multi-billion-dollar sale of half its assets in China’s Alibaba Group in one week.
Chinese Internet giant Alibaba Group Holding Ltd. is in the process of raising a US$3 billion loan from around six banks to buy back the stake that Yahoo Inc. owns in the company, people familiar with the situation said Thursday. The Alibaba.com Ltd. logo is seen at the company’s booth during the 2012 International Consumer Electronics Show in Las Vegas, Nevada, U.S., on Friday, Jan. 13, 2012. Yahoo owns 40% of Alibaba Group.
Could Alibaba make a run at Yahoo? Well, maybe. Let’s think about this: Alibaba is worth an estimated $27.5 billion (using the recent [subsidiary] Alipay transaction as a proxy), and currently Yahoo’s market cap is about $16 billion.
Industry observers clearly know Jack Ma, CEO of Alibaba, wants to reacquire part if not all of the 43% stake Yahoo holds—and could just buy the company outright. This scenario could work if Alibaba partners with a financial partner (private-equity firm) to spin out or operate the other businesses (mail, finance, sports, omg) as private entities.
Organizing to make this happen might be tough, but might be worth it if it is strategic enough to own. A recent Yahoo 10-Q filing shows that Alibaba’s private assets have also performed well and losses have come down sequentially in the March 2011 quarter, while revenue was up 150% year-over-year.
We’ve been following this for awhile, the big tech news this week was the Carol Bartz is out of Yahoo, but no one is really talking about Alibaba here in the USA.
However, there’s a cat-and-mouse game going on right now between Yahoo! and Alibaba. Alibaba would like to buy back some of Yahoo!’s stake in their company before committing to an IPO. Yahoo! doesn’t want to sell.
I’m all for Yahoo! holding on to their “golden ticket” negotiated in Jerry Yang’s master-stroke 2005 $1 billion investment in Alibaba. However, wouldn’t Yahoo! shareholders like to see this value reflected in their stock holdings? It’s been a long and windy road to get to this point. Seeing the stock get back to $30 would feel good. This can happen if Taobao and Alipay IPO and that can happen if the Yahoo! CEO and Jack Ma get in a room and sort this out once and for all.
We’ve been following this for awhile and more investor-types are really running this story down! Just to put this in context, if Yahoo! named Jack Ma as CEO of Yahoo! He would be in control of the largest payment processor in China (Alipay) and Alibaba, and Taobao and Yahoo. One thing for sure, the iconic Yahoo! is likely to change a lot soon.
Yahoo and Alibaba’s relationship has long been rocky. Observers say Yahoo has bristled at the way it has been sidelined on major decisions, while Ma’s company has been rebuffed by Yahoo in attempts to buy back some of the U.S. company’s invested stake.
Some investors believe Yahoo’s major assets in Asia could potentially be worth as much as Yahoo’s entire current market value and are betting that an IPO by privately held Alibaba, or one of its subsidiaries, could boost Yahoo’s valuation.
Yahoo has said all parties in the negotiations agreed on basic principles, particularly to ensure that Alipay would continue to be a driving force behind auctions site Taobao and that the payments system would be among the first to win an operating license from the Chinese government.
Alibaba said last week it has reorganized Taobao, China’s largest e-commerce website, into three separate companies, squashing any chance of a Taobao public offering.
Alibaba has wanted to buy back its stake from Yahoo and has tussled with Yahoo over the valuation of Taobao.
Alibaba Group said on Thursday it has reorganized Taobao, China’s largest e-commerce website, into three separate companies, squashing any chance of a Taobao public offering.
The move to split Taobao comes as Alibaba Group founder Jack Ma grapples with its major shareholders, Yahoo Inc and Japan’s Softbank, over ownership of Alipay, another of the group’s crown jewels. Taobao had 70 percent of all online sales transacted in China in the first quarter of the year and has been valued by Goldman Sachs at about $7 billion. The firm will be split effective from Thursday into three companies, namely its product search engine eTao, business-to-consumer website Taobao Mall and consumer-to-consumer website Taobao.com.
Alibaba is facinating, every week there’s something completely new and bizarre. Most people do not even know it’s owned by Yahoo (43% of it). A lot of folks who buy things from China use the site, it connects importers and exporters from more than 240 countries and regions.
Chinese e-commerce giant Alibaba announced its 2010 earnings yesterday. Its revenue rose 43.4 percent to 5.5 billion yuan (US$855 million) and net profit rose 45.1 percent to 1.5 billion yuan (US$226 million).
Analysts said the sales were largely driven by a growing customer base, which increased 30 percent to 61.8 million. In February, Alibaba’s former CEO and chief of operations David Wei resigned to take responsibilities for fraudulent activities of its customers.
Yahoo Inc. CEO Carol Bartz assured analysts the Internet company is making progress in its effort to be “appropriately compensated” for a recent change in its 43 percent stake in Alibaba Group, a leader in China’s rapidly growing online market. Alibaba recently spun off its online payment service without giving Yahoo anything.
Yahoo owns 43 percent of Chinese e-commerce giant Alibaba Group, which it acquired for $1 billion in 2005. The relationship between the two companies has grown strained since Carol Bartz took the CEO reins at Yahoo two years ago.
Ma’s attempts to repurchase some of Yahoo’s stake in his company have been rebuffed by Bartz.
The companies are currently in negotiations, along with Japan’s Softbank, over how to compensate Yahoo for Alipay, an Alibaba subsidiary that was transferred to a separate entity controlled by Ma in order to meet Chinese regulations relating to foreign ownership.
Since it is figured that Yahoo’s stake in Alibaba accounts for about half of the Silicon Valley company’s market cap, news that such a prize asset was moved without the CEO’s knowledge has raised questions by some about her future.
Yahoo co-founder Jerry Yang and CFO Tim Morse were in discussions with key people over fair compensation, the Yahoo executives told investors. There are a lot of “moving parts,” Bartz said, “but we’re making progress.”
“Simply put, very simply put, we believe our disclosure was timely and appropriate,” Bartz said. “We have approached this thoughtfully and methodically.” She added that the company has agreed with Alibaba shareholder Softbank and Alibaba “that none of us are going to discuss the past.”
EBay’s PayPal will no longer be a payment option on a site run by Chinese e-commerce giant Alibaba Group, a sign that cooperation between the two companies may be cooling.
Alibaba also has its own online payment service Alipay, which dominates the Chinese market. But the service has been involved in a dispute that has threatened to further damage relations between another U.S. Internet company — Yahoo.
Yahoo owns a 43 percent stake in Alibaba. But the value of that investment is at risk of being devalued after Alibaba transferred ownership of Alipay to a company under Alibaba CEO Jack Ma.
Yahoo and Alibaba are currently in talks over how compensation will be provided for the loss of the Alipay business.
Alipay was originally under the ownership of Alibaba Group. New regulatory measures, however, require all online payment services from nonfinanical institutions to be Chinese owned. To meet this requirement, control of Alipay was transferred to a separate Chinese company owned by Alibaba Group CEO Jack Ma.
Ok – so, it sounds like Alibaba (Jack Ma) doesn’t like being owned by Yahoo, he’s tried to buy back the shares of the company but Bartz (Yahoo) said no (it’s 50% of their market cap, they can’t). Alipay was spun off from Alibaba in 2004 and has become the largest payment processor in China. Alipay can’t be owned by a US company (new Chinese regulation) and eBay cannot do the payments for Alibaba, this means all the payments go through a company that Yahoo doesn’t own any more, who owns it? Jack Ma, Alibaba CEO. Incredible. Yahoo’s shares tanked as this was happening, we wonder if that was the plan all along to get Yahoo to sell off Alibaba or eventually be forced to? Will eBay/Paypal spin off a payment company just for China and make sure it’s Chinese owned to compete? This “new” regulation is very handy for Jack, politics!
Any way, we sometimes gets samples and products through AliExpress and Alibaba, so we’re interested in this.
I came across this website tonight, and checked it cause, well, I have iPod charger kits for sale too! What’s interesting about this company and product is that it seems to be a stellar example of the kind of lightweight manufacture that is becoming commonplace.
The future is: a product company is a couple people, fairly adept at designing stuff at the university-educated level but probably not 20-year veterans. There’s no injection-mold tooling guru, there’s no power supply engineer, there may not even be a CAD person. Instead, they can scan online sales-lead sites like alibaba.com and find already-manufactured products that are very close to what they want, like say this
Within a few days they can arrange to buy a sample and figure out what they have to do to get it to work the way they want (say changing around the data line impedances to make Apple stuff happy). Then contact the factory through their friendly sales person and negotiate pricing for any changes. 4 weeks later, they have 1000 pieces in hand (a paltry amount compared to what would normally be considered a reasonable run, like 10-50K) at a few $ each. Design some packaging and stickers and they can set up a webshop to turn a profit within 3 months of the original idea.
Your assignments for tonight?
1) Spend some time at Alibaba (or whatever your favvy sales-lead site would be) and come up with a hardware mashup using ready-to-manufacture products.
2) A USB-power supply such as above costs $2 in qty 1000 and you’ll get it sea-freighted to you in 4 weeks. The extra tooling/hacking costs $0.50 each. Your packaging is another $0.50. Assuming you sell 10/day at $6 each, what is your overhead for a website (include all website and paypal costs) per month? How long does it take to break even?
Printable catalog (PDF)
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