Jack Ma is Running Down Jianwai Shouting “YAHOO!” at the Top of his Lungs

In the Hutong
Ignoring the Humidity

Well, no, he’s not really, but he should be.

I mean, think about it. Yahoo has essentially paid Jack Ma $1 billion to take their China operations off their hands, all in return for a measly 35% of Alibaba’s stock.

Now, I don’t mean to imply that Alibaba’s stock is worthless, and I think Jack’s done a fine job building a nice, little business. But it’s not a US$4 billion operation by any intelligent measure (in the Ben Graham/Warren Buffett sense), even if you count intangibles and the potential value of eBay gadfly TaoBao.com (which may actually be worth something one day, if they can ever get away charging for it.)

There are only three possible conclusions here:

1. Terry and the Boyz have lost it completely and have been sold a real bill of goods;

2. Somebody tipped Yahoo! that they were about to have some serious regulatory challenges resulting from some internal political storms in Beijing; or,

3. Jack Ma has some kind of magic cure for Yahoo!’s ills that we don’t know about and that cannot be disclosed to the public.

The first is not entirely unlikely – big foreign businesses get taken to the cleaners in this country with depressing regularity, often aided in that process by “advisors” promising aid through a mystical and opaque process.

The second is, unfortunately, quite possible. The hailstorm of regulations coming down around the media sector suggests that there are some ill winds blowing across the ponds and through the courtyards of Zhonggnanhai. Somebody is trying to prove their political orthodoxy, and that’s a little worrisome.

The third is the most intriguing. I mean, granted, this is speculative and VERY paranoid, but think about it. Why, after all, has Alibaba steadfastly refused to go public, even during the go-go years of the Internet boom? What is Jack Ma hiding under his shirt – or under his corporate structure – or under his ownership structure – that he doesn’t want anyone to see? And why is it worth $1 billion cash to Yahoo!?


It’s almost enough to drive a guy to wearing an aluminum-foil yarmulke.


About David Wolf

An adviser to corporations and organizations on strategy, communications, and public affairs, David Wolf has been working and living in Beijing since 1995, and now divides his time between China and California. He also serves as a policy and industry analyst focused on innovative and creative industries, a futurist, and an amateur historian.
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