14 DAY TRIAL // Despite brave talk as recent as last week, Yahoo has sold its entire 1.14-percent stake in Alibaba.com, the Chinese business e-commerce platform, for about $150 million. However, Yahoo will retain its 39-percent share of the site's parent company, the unlisted Alibaba Group, which also handles Yahoo China. There has been increasing tension between the two companies recently. The US Internet giant is selling 57.48 million shares in Alibaba.com for HK$19.80 to HK$20.30 each, according to Reuters.
Yahoo CEO Carol Bartz said last week that it was best that Yahoo didn't have a direct involvement in the Chinese market, as the country generally favored local businesses instead of large, international corporations. Still, she believes Yahoo's investment in Alibaba allows it to reap the benefits of being present in China, without the disadvantages of a direct involvement. However, in the past, she has been critical of how the Alibaba Group has handled the Yahoo-China properties.
Things got tense after a restructuring at Yahoo China, in which Alibaba moved the popular Koubei.com classified-listing site from the Yahoo umbrella and integrated it with its online retail market place Taobao.com several weeks ago. And things may get even worse, as, just last week, Alibaba CEO and Co-founder Jack Ma said that the company hadn't decided how it would handle the Microsoft – Yahoo deal and whether it would implement Microsoft's solution.
It's no surprise then that the company welcomed Yahoo's move. "We are pleased to learn of the Yahoo! decision because having broader ownership of Alibaba.com with increased liquidity and support among institutional investors is what Alibaba.com hoped to achieve when it released the cornerstone investors," John Spelich, vice president of Alibaba Group's international corporate affairs, said.
The Alibaba.com shares went public in 2007 and they have risen dramatically this year, growing four-fold since January. Alibaba Group owns about 74 percent of the publicly traded Alibaba.com. The $150 million should come in handy for Yahoo, especially as it's getting ready to launch a massive, and expensive, advertising campaign.