Alibaba: No Bonfire Here. Move Along, Move Along.

Somewhere in the Central Business District
1609 hrs.

Following our recent post about Alibaba spending $750 million of the $1 billion Yahoo! patrimony inside of 9 months, I was treated to a clarification of Jack Ma’s statements at the recent Search Engine Strategies Conference in Nanjing by a vice-president of Alibaba:

• The $750 million in question was NOT used in operations.

• The $750 was paid out directly to Alibaba investors within weeks of the deal closing last summer.

• The said payouts were included in filings with the SEC made by Yahoo! on 16 August, which can be found here.

• Ergo sum, there is no bonfire of cash at Alibaba, but I think it is safe to say that here are some investors who are satisfied with their return on investment in Alibaba. Great going, guys!

Alibaba told me that the whole deal was modeled on the setup at Yahoo! in Japan, where the local team controls and operates the business because the local team knows best. That’s certainly fair. You can’t run a China operation from 6,000 miles away.

Alibaba also mentioned that they’re going to beat eBay, Google, AND Amazon in China. So I think we can look forward to some more interesting news coming out of Hangzhou in the future.

I expressed my appreciation to the gentleman from Alibaba, because in the Silicon Hutong we gratefully receive any feedback, especially from the companies themselves.

I’m still not convinced this was a good move for Yahoo! and its business in China, but I am now thoroughly convinced that it was a superb move for Alibaba.


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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