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Alibaba, Softbank and Micro-hoo

  • Forbes, Wednesday, February 20, 2008 12:15 PM

As it turns out, Alibaba will have a seat at the Yahoo negotiating table as the Web giant continues to resist a $41 billion (and shrinking) takeover from Microsoft. Yahoo owns a 39 percent equity stake in Alibaba, worth approximately $5.2 billion. Jack Ma, the company's founder, on Monday announced that it recently hired consultants to help influence the terms of a Yahoo sale. As Forbes says, "Alibaba might be used to majority rule in China, but it's making sure that strong connections fortify its minority voice in this possible buy-out."

Indeed, if Yahoo is sold to Microsoft, a majority of Alibaba's shares will be changing hands. The ownership question is a complicated situation, because Japanese software maker Softbank, which owns 30 percent of Alibaba, has an existing business partnership with Microsoft, while also owning 3.9 percent of Yahoo's shares.
Even messier, Softbank President Masayoshi Son is friends with both Microsoft chairman Bill Gates and Yahoo CEO Jerry Yang, who has one of the four seats on Alibaba's board. Son, therefore, is in an important position right in the middle of this merger.

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