The deal will see Yahoo! pay $1bn to Alibaba.com shareholders, as well as combining its Yahoo! China business into the firm. In exchange, it will take a 40% stake in Alibaba.com and 35% of voting rights, making it the largest investor in the company.
Terry Semel, chairman and chief executive of Yahoo!, said the investment underscored its long-term commitment to the Chinese market.
"Together, we will create one of the largest internet companies in China, and our combined assets will make us the only company that has a leading position in all the key sectors that are driving explosive internet growth in China such as search, commerce and communications," he said.
Business-to-business e-commerce is growing faster than any other segment in China, and is anticipated to grow at 95% a year from 2004 to 2007.
Alibaba owns the online trading market place Alibaba International; AliPay, the Chinese online payment service; Taobao, the e-commerce website; and Alibaba China, a trading community for small and medium-sized businesses. Yahoo! will add its keyword search service 3721 and the consumer commerce site 1Pai to Alibaba.com.
Yahoo! said the partnership model was the first of its kind for an internet company in China, and that it would allow the companies to respond quickly to local market needs and develop innovative new products and services.
A four-person board is being created to manage the new entity, with Jack Ma, chairman and chief executive of Alibaba.com, serving as chairman. Yahoo! co- founder Jerry Yang will also be on the board.
"We're confident that Yahoo! is putting its resources behind the right management team, which operates according to similar values as we do, and shares the same vision for providing the most essential and relevant services to consumers and businesses," Yang said.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .
.jpg)
.jpg)