Yahoo! is paying US$1 billion for a 40 per cent stake in e-commerce giant Alibaba.com and handing control of its China operations to Alibaba chief executive Jack Ma in the biggest foreign online investment in the mainland to date.
Mr Ma and Yahoo! chief operating officer Dan Rosensweig announced the deal, negotiations for which began earlier this year when Mr Ma and Yahoo! co-founder Jerry Yang met on California's Pebble Beach golf course.
As a privately held company, Hangzhou-based Alibaba does not disclose its financial structure or earnings but claims to be China's largest e-commerce company with a valuation of more than US$4 billion.
Yesterday's deal makes Yahoo! Alibaba's largest strategic investor with 35 per cent of voting rights and a seat on its four-person board to be occupied by Mr Yang. Mr Ma will be board chairman with another Alibaba executive and a representative for Japanese venture capital firm Softbank taking the other two seats.
Softbank, an early investor in Yahoo! and Alibaba, holds 27.4 per cent of Alibaba and can boost that to 30.5 per cent by exercising convertible bond rights.
The deal comes less than a week after mainland search engine Baidu's initial public offering on the Nasdaq Stock Market, where its share price more than quadrupled.
Alibaba management said the company had no plans to list in the short term. 'We will definitely go public one day but not in the immediate future,' Mr Ma said.
