Tuesday, August 9, 2005


Interesting that the numbers of this deal were disclosed and that this was reported during the process. So I assume it's a done deal. I remember Alibaba.com since they were another Softbank company such as HeyAnita, which I mentioned here before as my second startup, that received funding from them a few months before us. It's funny that this B2B play has been so successful because back in 2000 Masayoshi Son was singing praises of Ariba and how it was going to be his Yahoo! of the B2B space. From Forbes:

Web media company Yahoo! is in advanced talks to purchase an approximately 35% stake in China's biggest home-grown e-commerce company for almost $1 billion, in what would be the biggest investment by a foreign company in China's Internet industry to date, sources close to the negotiations said.

Yahoo! (nasdaq: YHOO - news - people )would be gaining one of China's most coveted Internet partners. Alibaba.com is led by Jack Ma, a one-time English teacher whose unpretentious style and quick wit have made him one of China's most revered entrepreneurs. Alibaba operates two online business sites ---Taobao.com, an online auction site, and Alibaba.com, an online trading site. Both were ranked among the world's top 40 websites on Sunday by the Alexa, the Internet monitoring service.

The talks are nearing completion amid a stunning run-up in the valuations of China's Internet companies by Western investors angling to profit from the country's economic and Internet boom.

On Friday, shares in China's biggest online search company Baidu.com (nasdaq: BIDU - news - people ) more than quadrupled on their first day of Nasdaq trading, the biggest one-day rise for a U.S.-listed IPO in four years, that left the company valued at $4 billion. Baidu ranked No. 6 on Alexa's list of the world's Top 500 websites on Sunday, but had revenue of only $14 million last year.

Investors buoyant about China's economic outlook last month paid roughly 30 times 2005 earnings for shares in Shanghai-based ad broadcaster Focus Media after its stock began trading on the Nasdaq. The market capitalization of the company – only in business for two years -- stands at around $700 million.

The talks between Yahoo and Alibaba are complicated because they involve three big sets of valuations – Taobao, Alibaba's other assets, and Yahoo's assets in China. Yahoo last year purchased a local keyword search company named 3721 Network Software for what it said would be as much as $120 million, and the business has been a success even though its founder Zhou Hongyi recently announced plans to leave 3721 as well as his post as chief of Yahoo China.
(full article)

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