Alibaba: Let’s Get This Show Finished 阿里巴巴和雅虎赶紧“离婚”吧

By newsdoug on February 7, 2012

Alibaba and Yahoo: untie the knot already! Let’s get this story finished and move on! I don’t mean to sound impatient, but that’s my first reaction on reading the latest reports about Alibaba’s endless saga in its quest to buy out the 40 percent stake in itself held by Yahoo (Nasdaq: YHOO). I realize this deal involves a big amount of money, possibly as much as $10 billion, but that said, it’s also quite straightforward since the 2 companies have essentially no shared assets and thus literally all that’s needed is agreement on a price and then for Alibaba to find the financing. According to the latest reports, Alibaba and Yahoo have finally entered into serious discussions, following Yahoo’s naming of a new CEO last month, and the 2 sides fully expect to reach an agreement by mid March. (Chinese article) I personally can’t wait until they announce a deal, as it will finally mark the end of a major corporate marriage that started with lots of promise, only to see things sour and end with a divorce that has taken way too long to reach. I’m probably being a little unfair here, as a final deal was unlikely to happen until Yahoo finally named a new CEO to replace Carol Bartz, who was a major source of friction between the 2 companies and whose firing last year finally set in process that will finally see Alibaba get its long-sought divorce. From Alibaba’s perspective, the sooner the settlement comes the better, as the divorce has become way too big a distraction as the company hopped from one crisis to the next at many of its core businesses last year, including its oldest B2B Alibaba.com (HKEx: 1688) site and its promising Taobao Mall, both of which were rocked by scandals that they are still recovering from. For its part, Yahoo also needs to put this story behind it and get to work trying to resuscitate its struggling search business, once a pioneer in the sector but which later lost its way as global giant Google (Nasdaq: GOOG) stole most of its business. A final settlement will not only end the hostilities, but will also leave Yahoo with a nice pile of cash to use to rebuild its business. It will also leave Alibaba with a pile of shares it can sell to more passive investors who are interested in its strong growth potential without wanting a strong say in its bigger management decisions. All that said, my final word to both sides, at least for now is: Let’s really try to end this saga by the mid-March deadline. Believe me, you won’t be the only ones celebrating!

Bottom line: The world will celebrate with Alibaba and Yahoo when they finally finish their divorce, ending an unhappy chapter for both companies that dragged on way too long.

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