Original Story: fortune.com
Chinese giant to open first cloud computing hub in the U.S. Wednesday.
Alibaba Group Holding Ltd BABA -1.64% is launching a cloud computing hub in Silicon Valley on Wednesday, the e-commerce giant’s first outside of China, underscoring its global ambitions in the face of stiff and entrenched competition.
The new California data center marks the Chinese company’s latest measured expansion onto American soil, and into a hotly contested U.S. market now dominated by Amazon.com Inc AMZN -0.78% , Microsoft Corp MSFT 0.19% and Google Inc. GOOG -0.61%).
Chinese giant to open first cloud computing hub in the U.S. Wednesday.
Alibaba Group Holding Ltd BABA -1.64% is launching a cloud computing hub in Silicon Valley on Wednesday, the e-commerce giant’s first outside of China, underscoring its global ambitions in the face of stiff and entrenched competition.
The new California data center marks the Chinese company’s latest measured expansion onto American soil, and into a hotly contested U.S. market now dominated by Amazon.com Inc AMZN -0.78% , Microsoft Corp MSFT 0.19% and Google Inc. GOOG -0.61%
Alibaba’s Aliyun cloud division intends the new data center to cater initially to Chinese companies with operations in the U.S., including retail, Internet and gaming firms. It will later target U.S. businesses seeking a presence in both countries, Ethan Yu, a vice president at Alibaba who runs the international cloud business, told Reuters.
“This is a very strategic move for us,” Yu said, declining to say how much Alibaba invested in the data center or disclose its location for security reasons. “International expansion is actually a company strategy in the coming few years.” A Washington DC international trade lawyer is following this story closely.
“Eventually we may expand to other regions, for example the East Coast or middle part of the U.S., if our customers have the demand for that.”
Aliyun, which has been likened to a budding version of Amazon Web Services, began as part of the company’s in-house technical infrastructure but has since expanded to lease processing and storage space for small and medium Internet businesses in China.
While Alibaba dominates e-commerce in China, Aliyun, also known as AlibabaCloud Computing, holds about a 23% market share in its home market. It faces both Chinese and foreign competitors, from carriers like China Telecom to Microsoft and Amazon. Its existing data centers span the Chinese cities of Hangzhou, Qingdao, Beijing, Shenzhen and Hong Kong. A Tampa investment lawyer represents clients in investment law cases.
Alibaba is kicking off its U.S. cloud business as American corporations and politicians are protesting what they see as Beijing’s efforts to curb foreign technology at home.
Chinese government controls have limited foreign competition and disrupted many online services, including Google’s and Amazon Web Services’, according to censorship watchdogs.
This week, U.S. President Barack Obama sharply criticized new Chinese counter-terrorism regulations that subject overseas companies to arduous measures regarding data management. The official Chinese news agency Xinhua responded Wednesday by calling Obama’s criticisms “utterly groundless and another piece of evidence of arrogance and hypocrisy of the U.S. foreign policy.”
A more immediate concern may be how Alibaba intends to vie with the likes of Amazon, Microsoft and Google, which are slashing prices on cloud services to try and sustain double-digit growth. They’re battling over a public cloud services market that could grow into an $100 billion industry by 2017, according to researcher IDC.
U.S. customers are not expected to be bothered by the service’s Chinese ownership if pricing is competitive.
Alibaba has big plans for Aliyun, which now accounts for about 1% of its revenue but supports its core e-commerce operation and will also play a pivotal role in the long run. Alibaba sees cloud computing as key to its plans to aggregate and analyze the vast quantities of data it collects, including on consumer behavior.
The company also needs to find ways to sustain so-far stunning growth. Shares in the company fell to their lowest levels since their debut on Tuesday, after rival JD.com’s JD 1.78% better-than-expected quarterly results revived concerns that Alibaba’s expansion is slowing.
Cloud computing and infrastructure was the company’s fastest-growing business segment in the December quarter, increasing sales 85% to $58 million.
Alibaba now derives the vast majority of its revenue from China. In recent months it has made headway in emerging markets from Russia to Brazil, but the company has taken a cautious, calculated approach to the U.S. market.
The northern California data node would serve internal Alibaba businesses, like AliExpress, its online B2C platform for buyers outside of China, as well as external public cloud clients, Yu said.
He declined to disclose details about potential clients. But cash-strapped startups generally rely heavily on cloud service providers to power their services. Alibaba has invested in several U.S. firms including messaging app Tango, online retailers 11Main.com, Fanatics.com and Shoprunner, but it’s unclear if they would avail themselves of Aliyun’s services.
Separately, it has also tied up with LendingClub to provide financing to online buyers in the U.S.
Ahead of Wednesday’s launch, Aliyun ran an invitation-only trial period for customers inChina with international expansion plans, he said. The company began selling U.S. cloud services on Tuesday.
“Gradually we will start to attract international customers,” Yu said. “There are actually lots of U.S. customers, U.S. enterprises who look forward to setting up lots of data centers inChina to serve their Chinese-based customers.”
“I do see there is big demand for U.S. customers who look for balanced presence of their IT infrastructure across the world, including China.”
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Showing posts with label Alibaba. Show all posts
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Monday, March 09, 2015
Friday, September 19, 2014
ALIBABA'S JACK MA: FROM 'CRAZY' TO CHINA'S RICHEST MAN
Original Story: USAToday.com
BEIJING — China's richest man celebrated his 50th birthday last week in the United States and expects his company will last twice as long, plus two years.
Revealing his ambition — and a love of numbers common in China — Jack Ma says Alibaba will last 102 years so the Internet empire he founded in 1999 can span three centuries.
Under Ma's maverick leadership, the 15-year-old firm has already bridged a period of extraordinary change in global trade and the Chinese economy. In a nation with little e-commerce but plenty of Communist Party bureaucrats, he raised a still-growing giant whose U.S. initial public offering, which will start trading under the BABA ticker Friday, is the largest in history.
REJECTED BY KFC
His rags-to-riches journey is just as spectacular. A scrawny Ma, just over 5 feet tall, was rejected by KFC and other employers in his hometown of Hangzhou in east China. He believed in the Internet's business potential when few other Chinese did. Outlandish ideas earned him the nickname "Crazy Jack Ma." No one thinks he's mad now, even when dressing in wild wigs and lipstick for his annual meeting where he serenades a stadium full of Alibaba employees.
Ma's readiness to make fun of himself, and speak his mind, stands in contrast to China's often conservative corporate barons. Charismatic and energetic, this former teacher has become an inspiration to millions across China. He flunked at math but loved English, and countless books and DVDs sell his business lessons in every airport lounge.
Ma — whose net worth is $21.9 billion,according to the Bloomberg Billionaires Index — now stars in the coming-out party for China's private sector onto the world stage. He praises and uses Western management techniques but also quotes regularly from Chairman Mao Zedong. He is a fan of China's kung fu novels and made those legends part of his company's culture. He travels the world with a tai chi trainer.
Jack Ma, whose Chinese name is Ma Yun, was born in 1964 into a markedly different China. Communist Party campaigns dominated daily life. His parents performed a type of musical storytelling that was banned during Mao's devastating Cultural Revolution, from 1966 to 1976.
Ma's grandfather, a local official under the Nationalist Party that Mao defeated, was persecuted as an enemy of the Communist revolution. Ma and his relatives all suffered at that time, wrote Chinese author Zhang Yongsheng in a 2009 biography.
Like most Chinese parents back then, Ma's father beat him growing up. But there were childhood pleasures, too. He liked collecting and fighting crickets, an ancient pastime that Mao also banned. Ma developed an expert ear, able to distinguish the type and size of cricket just by the sound, his friend and personal assistant at Alibaba, Chen Wei, wrote in his 2013 book on Ma.
Starting at age 12, Ma says he awoke at 5 a.m. to walk or bicycle to Hangzhou's main hotel so he could practice his English with foreign tourists, who started trickling into the country after Mao's death in 1976. He did this for nine years and acted as a free tour guide to many, befriended several and later visited one family in Australia.
Those experiences opened his eyes. "I realized what they told me was quite different from what I had learned in school or heard from my parents," Ma told Xiao-Ping Chen, a professor at the University of Washington in Seattle, in an interview published last year.
MA MEETS THE INTERNET
After twice failing the national college entrance exams, Ma entered what he called "Hangzhou's worst college." Graduating in 1988, Ma married his college sweetheart and taught English at a local college for five years, earning $15 a month. During that time, he also applied for, and failed to land, jobs at a local KFC, a hotel and the city police.
Determined to enter business, Ma set up a translation company, but he still had to peddle goods on the street to get by. He traveled to the United States in 1995 as a translator to help a Chinese firm recover a payment. The attempt failed, and the American who owed money pulled a gun on him, Ma says. But a friend in Seattle showed Ma the Internet, and an idea began brewing.
Ma noticed there was not a single online listing for "China" and "beer," unlike those that popped up for American and German beer. He returned to China and set up a listing site that he later sold to the government. After working in Beijing for an Internet firm under the Ministry of Commerce, Ma returned home to Hangzhou to pursue his dream.
ALIBABA FOUNDED
With the help of more than a dozen friends who pooled their resources — just $60,000 — he founded Alibaba, a business-to-business online platform. The company now makes more profit than rivals Amazon.com and e-Bay combined, as China's burgeoning middle class are big spenders online, and small companies rely on Alibaba and its online payment system.
Ma seized opportunities as China was transforming into a market economy. At the time, the Internet was first being promoted, and small, private businesses struggled to get loans and had to compete against government-protected state firms, said economist Feng Pengcheng, director of the China Research Center for Capital Management at the University of International Business and Economics in Beijing.
"The business model Ma Yun created in China suited the Chinese market. It might be a failure in the U.S. market, but it's so successful in China," Feng said. "What's more, Ma Yun is good at cooperating with other talents. His company culture and his personal charm attracted employees, and his slogans are uplifting," he said.
For a billionaire so outspoken on company and business issues, Ma says little about his family and manages to keep his private life quiet and scandal-free. Ma and his wife Zhang Ying have a son, an undergrad at the University of California-Berkeley, where Ma had audited classes. A black-and-white photo of a young Ma with his older brother and younger sister went viral this month in China's cyberspace, as many people were unaware their richest citizen even had siblings.
"Ma Yun's lifestyle is very simple and modest. His hobbies are still tai chi and kung fu novels," Chen, his friend and assistant, said last week from Boston, while accompanying Ma on Alibaba's U.S. roadshow before the IPO.
"I don't think he has changed much, he is still that old style. After the IPO, I am sure his lifestyle will be simpler. He won't change," Chen said. In his book, being published in English this month, Chen said Ma enjoys meditation in the mountains, playing poker with friends and writing his own kung fu fiction. By Ma's own account, he believes in both Buddhism and Taoism, and follows many tenets of Confucianism.
'OPPOSITE OF STUFFY'
"My father said if you were born 30 years ago, you'd probably be in a prison, because the ideas you have are so dangerous," Ma told Charlie Rose in a 2011 TV interview. Despite such bravado for a Western audience, Ma has always been careful in China to avoid statements and actions that could jeopardize his business.
If China ever did permit open elections, Ma could become a popular candidate for top office, said Duncan Clark, a Brit who is a Beijing-based technology consultant. "He is the opposite of stuffy and canned. He's funny, creative and a compelling speaker. I often thought he has another career in stand-up comedy," he said.
Ma resigned last year as Alibaba's CEO, but he clearly remains in charge as the firm's executive chairman. He has hinted at exploring more "cultural" pursuits, such as film-making, education and environmental protection.
"One issue facing China is that people's wallets are bulging, but their heads are empty," he told Hong Kong's South China Morning Post last year. Ma also promises more philanthropy, including what may be China's largest charity foundation. Expect to hear plenty more from maverick Ma.
BEIJING — China's richest man celebrated his 50th birthday last week in the United States and expects his company will last twice as long, plus two years.
Revealing his ambition — and a love of numbers common in China — Jack Ma says Alibaba will last 102 years so the Internet empire he founded in 1999 can span three centuries.
Under Ma's maverick leadership, the 15-year-old firm has already bridged a period of extraordinary change in global trade and the Chinese economy. In a nation with little e-commerce but plenty of Communist Party bureaucrats, he raised a still-growing giant whose U.S. initial public offering, which will start trading under the BABA ticker Friday, is the largest in history.
REJECTED BY KFC
His rags-to-riches journey is just as spectacular. A scrawny Ma, just over 5 feet tall, was rejected by KFC and other employers in his hometown of Hangzhou in east China. He believed in the Internet's business potential when few other Chinese did. Outlandish ideas earned him the nickname "Crazy Jack Ma." No one thinks he's mad now, even when dressing in wild wigs and lipstick for his annual meeting where he serenades a stadium full of Alibaba employees.
Ma's readiness to make fun of himself, and speak his mind, stands in contrast to China's often conservative corporate barons. Charismatic and energetic, this former teacher has become an inspiration to millions across China. He flunked at math but loved English, and countless books and DVDs sell his business lessons in every airport lounge.
Ma — whose net worth is $21.9 billion,according to the Bloomberg Billionaires Index — now stars in the coming-out party for China's private sector onto the world stage. He praises and uses Western management techniques but also quotes regularly from Chairman Mao Zedong. He is a fan of China's kung fu novels and made those legends part of his company's culture. He travels the world with a tai chi trainer.
Jack Ma, whose Chinese name is Ma Yun, was born in 1964 into a markedly different China. Communist Party campaigns dominated daily life. His parents performed a type of musical storytelling that was banned during Mao's devastating Cultural Revolution, from 1966 to 1976.
Ma's grandfather, a local official under the Nationalist Party that Mao defeated, was persecuted as an enemy of the Communist revolution. Ma and his relatives all suffered at that time, wrote Chinese author Zhang Yongsheng in a 2009 biography.
Like most Chinese parents back then, Ma's father beat him growing up. But there were childhood pleasures, too. He liked collecting and fighting crickets, an ancient pastime that Mao also banned. Ma developed an expert ear, able to distinguish the type and size of cricket just by the sound, his friend and personal assistant at Alibaba, Chen Wei, wrote in his 2013 book on Ma.
Starting at age 12, Ma says he awoke at 5 a.m. to walk or bicycle to Hangzhou's main hotel so he could practice his English with foreign tourists, who started trickling into the country after Mao's death in 1976. He did this for nine years and acted as a free tour guide to many, befriended several and later visited one family in Australia.
Those experiences opened his eyes. "I realized what they told me was quite different from what I had learned in school or heard from my parents," Ma told Xiao-Ping Chen, a professor at the University of Washington in Seattle, in an interview published last year.
MA MEETS THE INTERNET
After twice failing the national college entrance exams, Ma entered what he called "Hangzhou's worst college." Graduating in 1988, Ma married his college sweetheart and taught English at a local college for five years, earning $15 a month. During that time, he also applied for, and failed to land, jobs at a local KFC, a hotel and the city police.
Determined to enter business, Ma set up a translation company, but he still had to peddle goods on the street to get by. He traveled to the United States in 1995 as a translator to help a Chinese firm recover a payment. The attempt failed, and the American who owed money pulled a gun on him, Ma says. But a friend in Seattle showed Ma the Internet, and an idea began brewing.
Ma noticed there was not a single online listing for "China" and "beer," unlike those that popped up for American and German beer. He returned to China and set up a listing site that he later sold to the government. After working in Beijing for an Internet firm under the Ministry of Commerce, Ma returned home to Hangzhou to pursue his dream.
ALIBABA FOUNDED
With the help of more than a dozen friends who pooled their resources — just $60,000 — he founded Alibaba, a business-to-business online platform. The company now makes more profit than rivals Amazon.com and e-Bay combined, as China's burgeoning middle class are big spenders online, and small companies rely on Alibaba and its online payment system.
Ma seized opportunities as China was transforming into a market economy. At the time, the Internet was first being promoted, and small, private businesses struggled to get loans and had to compete against government-protected state firms, said economist Feng Pengcheng, director of the China Research Center for Capital Management at the University of International Business and Economics in Beijing.
"The business model Ma Yun created in China suited the Chinese market. It might be a failure in the U.S. market, but it's so successful in China," Feng said. "What's more, Ma Yun is good at cooperating with other talents. His company culture and his personal charm attracted employees, and his slogans are uplifting," he said.
For a billionaire so outspoken on company and business issues, Ma says little about his family and manages to keep his private life quiet and scandal-free. Ma and his wife Zhang Ying have a son, an undergrad at the University of California-Berkeley, where Ma had audited classes. A black-and-white photo of a young Ma with his older brother and younger sister went viral this month in China's cyberspace, as many people were unaware their richest citizen even had siblings.
"Ma Yun's lifestyle is very simple and modest. His hobbies are still tai chi and kung fu novels," Chen, his friend and assistant, said last week from Boston, while accompanying Ma on Alibaba's U.S. roadshow before the IPO.
"I don't think he has changed much, he is still that old style. After the IPO, I am sure his lifestyle will be simpler. He won't change," Chen said. In his book, being published in English this month, Chen said Ma enjoys meditation in the mountains, playing poker with friends and writing his own kung fu fiction. By Ma's own account, he believes in both Buddhism and Taoism, and follows many tenets of Confucianism.
'OPPOSITE OF STUFFY'
"My father said if you were born 30 years ago, you'd probably be in a prison, because the ideas you have are so dangerous," Ma told Charlie Rose in a 2011 TV interview. Despite such bravado for a Western audience, Ma has always been careful in China to avoid statements and actions that could jeopardize his business.
If China ever did permit open elections, Ma could become a popular candidate for top office, said Duncan Clark, a Brit who is a Beijing-based technology consultant. "He is the opposite of stuffy and canned. He's funny, creative and a compelling speaker. I often thought he has another career in stand-up comedy," he said.
Ma resigned last year as Alibaba's CEO, but he clearly remains in charge as the firm's executive chairman. He has hinted at exploring more "cultural" pursuits, such as film-making, education and environmental protection.
"One issue facing China is that people's wallets are bulging, but their heads are empty," he told Hong Kong's South China Morning Post last year. Ma also promises more philanthropy, including what may be China's largest charity foundation. Expect to hear plenty more from maverick Ma.
Tuesday, May 22, 2012
Yahoo Discusses Selling Stake in Alibaba Again
Alibaba Group Holding Ltd. is near an agreement to buy back a 20 percent stake in itself from Yahoo! Inc. for about $7 billion and may announce a deal as soon as today, said a person with knowledge of the matter.
The purchase may pave the way for Alibaba, China’s largest e-commerce provider, to pursue an initial public offering in the next 18 months. Alibaba, helped by shareholders Temasek Holdings Pte., Digital Sky Technologies, Silver Lake, plans to finance the purchase with cash and debt.
Alibaba has been trying to buy back the stake in itself for more than a year and stepped up efforts in September, when the U.S. company fired former chief executive officer. Reducing the Alibaba stake lessens Yahoo’s toehold in China, the world’s largest Internet market, while also making a takeover of the U.S. company more likely, said an analyst at Stifel Nicolaus & Co.
For Yahoo shareholders, the sale and subsequent march towards an IPO is a clear positive, as many questioned whether Yahoo would be able to monetize its China assets at all. In addition, the capital required to take Yahoo private is reduced with each Alibaba monetization event.
Yahoo has come close to selling the stake in the past and failed, and a deal may be postponed. Yahoo currently owns a 40 percent stake in Alibaba so the current proposal under discussion would cut that holding in half.
The companies struggled to make headway on negotiations, failing to reach an agreement to let Alibaba Group buy back shares in 2010. Yahoo acquired the stake in 2005 in exchange for $1 billion and ownership of Yahoo’s Chinese unit.
Fissures became public by January 2010 when Alibaba Group described as “reckless‘‘ Yahoo’s support for Google Inc., which tangled with Chinese authorities over the nation’s Web- censorship rules.
In May of last year, Yahoo’s rift with Alibaba widened after the Web portal said the Chinese company spun off its online payment business without informing shareholders. Yahoo said it wasn’t consulted about the transfer of the Alipay unit to a company mostly owned by the chief executive officer of Alibaba Group.
Yahoo had a board meeting to review the transaction and will consider a dividend payment, AllThingsD reported May 17. The website said the deal is likely to value the portion of Yahoo’s holdings at about $7 billion, or 20 percent of Alibaba’s $35 billion enterprise valuation. After a potential IPO, Yahoo could sell more of its stake, AllThingsD reported.
Active Discussions
Yahoo, which failed to keep pace with growth at Google and Facebook Inc., is pursuing active discussions with the Chinese company.
Yahoo had also been in discussions about selling its stake in Yahoo! Japan to Tokyo-based Softbank Corp. Those talks have gone cold over price and have not resumed.
Yahoo considered a deal with Alibaba and Softbank that would cut its stake in Alibaba to about 15 percent from about 40 percent.
The purchase may pave the way for Alibaba, China’s largest e-commerce provider, to pursue an initial public offering in the next 18 months. Alibaba, helped by shareholders Temasek Holdings Pte., Digital Sky Technologies, Silver Lake, plans to finance the purchase with cash and debt.
Alibaba has been trying to buy back the stake in itself for more than a year and stepped up efforts in September, when the U.S. company fired former chief executive officer. Reducing the Alibaba stake lessens Yahoo’s toehold in China, the world’s largest Internet market, while also making a takeover of the U.S. company more likely, said an analyst at Stifel Nicolaus & Co.
For Yahoo shareholders, the sale and subsequent march towards an IPO is a clear positive, as many questioned whether Yahoo would be able to monetize its China assets at all. In addition, the capital required to take Yahoo private is reduced with each Alibaba monetization event.
Yahoo has come close to selling the stake in the past and failed, and a deal may be postponed. Yahoo currently owns a 40 percent stake in Alibaba so the current proposal under discussion would cut that holding in half.
The companies struggled to make headway on negotiations, failing to reach an agreement to let Alibaba Group buy back shares in 2010. Yahoo acquired the stake in 2005 in exchange for $1 billion and ownership of Yahoo’s Chinese unit.
Fissures became public by January 2010 when Alibaba Group described as “reckless‘‘ Yahoo’s support for Google Inc., which tangled with Chinese authorities over the nation’s Web- censorship rules.
In May of last year, Yahoo’s rift with Alibaba widened after the Web portal said the Chinese company spun off its online payment business without informing shareholders. Yahoo said it wasn’t consulted about the transfer of the Alipay unit to a company mostly owned by the chief executive officer of Alibaba Group.
Yahoo had a board meeting to review the transaction and will consider a dividend payment, AllThingsD reported May 17. The website said the deal is likely to value the portion of Yahoo’s holdings at about $7 billion, or 20 percent of Alibaba’s $35 billion enterprise valuation. After a potential IPO, Yahoo could sell more of its stake, AllThingsD reported.
Active Discussions
Yahoo, which failed to keep pace with growth at Google and Facebook Inc., is pursuing active discussions with the Chinese company.
Yahoo had also been in discussions about selling its stake in Yahoo! Japan to Tokyo-based Softbank Corp. Those talks have gone cold over price and have not resumed.
Yahoo considered a deal with Alibaba and Softbank that would cut its stake in Alibaba to about 15 percent from about 40 percent.
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Monday, May 14, 2012
Yahoo Restructuring Again
Story first appeared in USA Today.
Yahoo has hit reboot again.
The CEO and five board members were shown the door on Sunday following calls for the chief's head over résumé inaccuracies and pressures to reconfigure the board.
The struggling Internet giant, already in a massive turnaround effort, has named an interim CEO and chairman of the board.
Yahoo became embroiled in the résumé flap when activist shareholder Third Point, which holds a 5.8% stake, disputed the CEO's résumé.
The Third Point CEO said the résumé inaccurately claimed a degree in computer science, calling into question the Yahoo CEO as well as the head of the hiring committee. Yahoo acknowledged the inaccuracy and bowed to pressure from Third Point to review the matter.
The fallout comes as Third Point had increased demands for the CEO's removal and a board makeover. Under the shake-up, Yahoo has relented to the demands for placement of Third Point members on the Yahoo board.
The board believes in the strength of the company's business and assets, and in the opportunities before us. The résumé flap is the latest black eye for Yahoo, which has been under pressure from shareholders to reshape itself amid a withering assault from Google and Facebook.
It's very damaging, and speaks so negatively to the vetting process. The CEO had been hired for strategy, branding and marketing — not computer science.
The January hiring of the CEO, who had been the highly successful CEO of eBay's PayPal unit, was Yahoo's latest stab at a turnaround. But his padded credentials raised questions about his integrity and the Internet pioneer's hiring and vetting process.
The hasty exit complicates a restructuring plan put into place that includes 2,000 layoffs. It's just the latest in a series of missteps and stumbles in the past few years highlighted by multiple CEOs, executive defections, reorganizations and questions about deals with tech partners Microsoft and Alibaba.
It all adds up to inheriting a wayward ship with a reconstituted board and uncertain future.
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Yahoo has hit reboot again.
The CEO and five board members were shown the door on Sunday following calls for the chief's head over résumé inaccuracies and pressures to reconfigure the board.
The struggling Internet giant, already in a massive turnaround effort, has named an interim CEO and chairman of the board.
Yahoo became embroiled in the résumé flap when activist shareholder Third Point, which holds a 5.8% stake, disputed the CEO's résumé.
The Third Point CEO said the résumé inaccurately claimed a degree in computer science, calling into question the Yahoo CEO as well as the head of the hiring committee. Yahoo acknowledged the inaccuracy and bowed to pressure from Third Point to review the matter.
The fallout comes as Third Point had increased demands for the CEO's removal and a board makeover. Under the shake-up, Yahoo has relented to the demands for placement of Third Point members on the Yahoo board.
The board believes in the strength of the company's business and assets, and in the opportunities before us. The résumé flap is the latest black eye for Yahoo, which has been under pressure from shareholders to reshape itself amid a withering assault from Google and Facebook.
It's very damaging, and speaks so negatively to the vetting process. The CEO had been hired for strategy, branding and marketing — not computer science.
The January hiring of the CEO, who had been the highly successful CEO of eBay's PayPal unit, was Yahoo's latest stab at a turnaround. But his padded credentials raised questions about his integrity and the Internet pioneer's hiring and vetting process.
The hasty exit complicates a restructuring plan put into place that includes 2,000 layoffs. It's just the latest in a series of missteps and stumbles in the past few years highlighted by multiple CEOs, executive defections, reorganizations and questions about deals with tech partners Microsoft and Alibaba.
It all adds up to inheriting a wayward ship with a reconstituted board and uncertain future.
For more organic SEO and web optimization related news, visit the SEO Done Right blog.
For national and worldwide related business news, visit the Peak News Room blog.
For local and Michigan business related news, visit the Michigan Business News blog.
For healthcare and medical related news, visit the Healthcare and Medical blog.
For law related news, visit the Nation of Law blog.
For real estate and home related news, visit the Commercial and Residential Real Estate blog.
For technology and electronics related news, visit the Electronics America blog.
Thursday, February 16, 2012
Alibaba Bypasses Negotiates in Yahoo Deal
First appeared in Associated Press
Alibaba Group and Japan's Softbank will go directly to
Yahoo's chief executive, bypassing negotiators from the U.S. Internet company,
after talks over the sale of Yahoo's Asian holdings broke down, a person
familiar with the negotiations said Wednesday.
The struggling Internet company has been in discussions to
sell its stakes in Chinese e-commerce company Alibaba Group Holding Ltd. and
Yahoo Japan back to Alibaba and Yahoo Japan shareholder Softbank Corp.
But the person, who declined to be identified because the
talks are confidential, said that Softbank and Alibaba will go directly to
Yahoo Inc. CEO Scott Thompson for more clarity after talks broke down over the
terms. The person said Yahoo's negotiating team seemed to have different ideas
from the company's leaders.
"Softbank and Alibaba will be reaching out to Scott
Thompson to get clarity on what the heck is going on," said the person,
adding that the two Asian companies are still "very much in alignment."
The fate of Yahoo's Asian holdings remains in limbo after
negotiations abruptly broke off. It's the latest twist in the drama that has
been swirling around Yahoo since it fired Carol Bartz as CEO five months ago.
Yahoo wants to appease shareholders by selling its two most
valuable assets - the stakes in Alibaba and Yahoo Japan - to raise money for
dividends or possible acquisitions. But a complicated deal that would have
enabled Yahoo to escape taxes fell apart.
The person said the talks broke down over unreasonable terms
but wouldn't specify what that meant, except to say that it wasn't over price.
"The strategic leaders were saying: We want to unlock
some value here so we can free up some cash and focus on the core," said
the person of Yahoo's top management. "Based on the behavior of the most
recent negotiation session (in Hong Kong), it was clear that somebody else had
a different idea."
On Tuesday, another person familiar with the matter said
negotiations broke off in a disagreement over the sales price and the best way
to get the complex deal done. And a third person also familiar with talks said
Yahoo had second thoughts after agreeing to a price outlined in late December.
All Things D, a technology blog affiliated with The Wall
Street Journal, reported earlier that the talks had collapsed.
Analysts have differed on how much Yahoo could fetch from
selling its stakes, with estimates ranging from $11 billion to $18 billion.
Yahoo owns about 40 percent of Alibaba.
Adding to turmoil at Yahoo, a major shareholder outlined
plans Tuesday to wage a campaign to win a board seat for himself and three of
his allies. New York hedge fund manager Daniel Loeb said in a regulatory filing
that the company needs more directors with media experience and turnaround
know-how.
Wednesday, September 15, 2010
EBay to Focus on Exports, Cross-Border China Trades, CEO Says
Bloomberg
EBay Inc., the owner of e-commerce sites and the PayPal payment service, plans to focus on exports and cross-border trades involving China instead of competing in the domestic market, Chief Executive Officer John Donahoe said.
“Over time, we will look for opportunities to partner or joint venture or work together with Chinese companies,” Donahoe, 50, said in an interview today in Hangzhou, China. “We’ve, in essence, exited the domestic market.”
Cross-border trades will probably rise more than 80 percent to $4 billion this year, Donahoe said. EBay is counting on PayPal and partnerships with local companies to help it expand revenue from China after failing to gain a local foothold to compete against entrepreneur Jack Ma’s Alibaba Group Holding Ltd.
“We don’t think the battle with Alibaba over the next five years is a game breaker,” said Bill Smead, an EBay investor who manages $160 million at Smead Capital Management Inc. in Seattle. “The story is way bigger than that little bit of duking it out.”
Although competition from Alibaba is stiff, EBay’s efforts in China, which has more Internet users than the total U.S. population, could pay big rewards, Smead said.
Donahoe said Alibaba Group and its Alipay system shouldn’t be seen as rivals to EBay and PayPal. PayPal now has 1 million users in China, he said. Alibaba Group said its rival Alipay system has 300 million registered users in the world’s largest market by Internet users.
Alibaba Domination
“Alibaba dominates the Chinese domestic market,” Donahoe said in the interview. “We are the leading cross-border global e-commerce and payments network. I don’t view Alibaba as a competitor. I view them as a colleague and a potential partner.”
Donahoe is in Hangzhou, headquarters of Alibaba, to speak at Alibaba’s annual Netrepreneur Summit. Donahoe said he met with Ma last night and the two appeared on stage at the summit, seated in armchairs, joking with each other. Ma turns 46 today and Donahoe wished him a happy birthday.
“EBay can support us globally so we can build a website on which small and medium-sized enterprises from China can sell to the world,” Ma said.
EBay first entered China in 2002 under the leadership of former CEO and current California gubernatorial candidate Meg Whitman. Competition from Taobao.com, Alibaba’s auction business, saw EBay’s market share decline by half and it shut down its site in 2006.
Donahoe joined EBay in 2005 as president of its Marketplaces unit from Bain & Co., where he was worldwide managing director. He became CEO in March 2008.
China Venture
Today, EBay operates in China through a joint venture with Tom Online Inc., controlled by billionaire Li Ka-shing, in addition to PayPal.
“U.S. Internet companies have had difficulty entering the China market due to both political reasons and cultural differences,” Galant Ng, a Hong Kong-based Internet analyst at Tai Fook Securities, said in an interview. “They may have to use something other than a direct approach. Maybe strategic partnership is the way. Alibaba is a good strategic partner.”
“Over time, we will look for opportunities to partner or joint venture or work together with Chinese companies,” Donahoe, 50, said in an interview today in Hangzhou, China. “We’ve, in essence, exited the domestic market.”
Cross-border trades will probably rise more than 80 percent to $4 billion this year, Donahoe said. EBay is counting on PayPal and partnerships with local companies to help it expand revenue from China after failing to gain a local foothold to compete against entrepreneur Jack Ma’s Alibaba Group Holding Ltd.
“We don’t think the battle with Alibaba over the next five years is a game breaker,” said Bill Smead, an EBay investor who manages $160 million at Smead Capital Management Inc. in Seattle. “The story is way bigger than that little bit of duking it out.”
Although competition from Alibaba is stiff, EBay’s efforts in China, which has more Internet users than the total U.S. population, could pay big rewards, Smead said.
Donahoe said Alibaba Group and its Alipay system shouldn’t be seen as rivals to EBay and PayPal. PayPal now has 1 million users in China, he said. Alibaba Group said its rival Alipay system has 300 million registered users in the world’s largest market by Internet users.
Alibaba Domination
“Alibaba dominates the Chinese domestic market,” Donahoe said in the interview. “We are the leading cross-border global e-commerce and payments network. I don’t view Alibaba as a competitor. I view them as a colleague and a potential partner.”
Donahoe is in Hangzhou, headquarters of Alibaba, to speak at Alibaba’s annual Netrepreneur Summit. Donahoe said he met with Ma last night and the two appeared on stage at the summit, seated in armchairs, joking with each other. Ma turns 46 today and Donahoe wished him a happy birthday.
“EBay can support us globally so we can build a website on which small and medium-sized enterprises from China can sell to the world,” Ma said.
EBay first entered China in 2002 under the leadership of former CEO and current California gubernatorial candidate Meg Whitman. Competition from Taobao.com, Alibaba’s auction business, saw EBay’s market share decline by half and it shut down its site in 2006.
Donahoe joined EBay in 2005 as president of its Marketplaces unit from Bain & Co., where he was worldwide managing director. He became CEO in March 2008.
China Venture
Today, EBay operates in China through a joint venture with Tom Online Inc., controlled by billionaire Li Ka-shing, in addition to PayPal.
“U.S. Internet companies have had difficulty entering the China market due to both political reasons and cultural differences,” Galant Ng, a Hong Kong-based Internet analyst at Tai Fook Securities, said in an interview. “They may have to use something other than a direct approach. Maybe strategic partnership is the way. Alibaba is a good strategic partner.”
Tuesday, September 29, 2009
Yahoo Sells Stake In Alibaba.com
Story from Bloomberg
Yahoo! Inc. is selling its stake in Alibaba.com Ltd., operator of China’s biggest trading Web site, for as much as HK$1.17 billion ($151 million), after the stock almost quadrupled in Hong Kong trading this year.
UBS AG, the sole bookrunner, is placing 57.5 million shares, equivalent to a 1.1 percent stake, at an indicated price range of HK$19.80 to HK$20.30 each, according to terms of the sale obtained by Bloomberg News. That’s as much as 6.4 percent lower than Alibaba’s closing price in Hong Kong today.
The sale by Yahoo, owner of the second most popular U.S. Internet search engine, follows a placement by Alibaba Chairman Jack Ma last week that raised HK$273 million. Sunnyvale, California-based Yahoo is still the biggest shareholder of Alibaba Group Holding Ltd., the parent of Hong Kong-listed Alibaba.com.
“Yahoo regards its investment in Alibaba as long-term, so the decision is quite negative for the stock, especially as it came after Jack Ma’s sale,” said Steven Liu, an analyst who rates Alibaba.com “sell” at DBS Vickers Ltd. in Hong Kong. “The stock is quite expensive now after the rally this year.”
Alibaba rose 3.7 percent to HK$21.15 in Hong Kong today. The stock has almost quadrupled this year, compared with the 45 percent gain in the city’s benchmark Hang Seng Index. Yahoo fell 16 cents to $15.43 at 10:19 a.m. New York time in Nasdaq Stock Market trading.
In 2005, Yahoo paid $1 billion and swapped its Chinese operations for a 40 percent stake in closely held Alibaba Group. In 2007, the U.S. company was one of eight “cornerstone” investors which subscribed to the $1.7 billion initial public offering of Alibaba.com, the biggest first-time share sale by an Internet company since Google Inc.’s IPO in 2004.
Boost Liquidity
Alibaba.com said in June that Yahoo, Cisco Systems Inc.,American International Group Inc. and other cornerstone investors would be allowed to sell their stakes immediately, five months before the expiry of a previously agreed lock-up agreement. The move was designed to boost liquidity of its shares, the Chinese company said at the time.
“We are pleased to learn of the Yahoo decision,” Alibaba spokesman John Spelich said in an e-mail today. The sale will help the company achieve broader ownership of its stock, he said.
Jeremy Seow, a Singapore-based spokesman at Yahoo, said he couldn’t immediately comment on the sale.
Story from Bloomberg
Yahoo! Inc. is selling its stake in Alibaba.com Ltd., operator of China’s biggest trading Web site, for as much as HK$1.17 billion ($151 million), after the stock almost quadrupled in Hong Kong trading this year.UBS AG, the sole bookrunner, is placing 57.5 million shares, equivalent to a 1.1 percent stake, at an indicated price range of HK$19.80 to HK$20.30 each, according to terms of the sale obtained by Bloomberg News. That’s as much as 6.4 percent lower than Alibaba’s closing price in Hong Kong today.
The sale by Yahoo, owner of the second most popular U.S. Internet search engine, follows a placement by Alibaba Chairman Jack Ma last week that raised HK$273 million. Sunnyvale, California-based Yahoo is still the biggest shareholder of Alibaba Group Holding Ltd., the parent of Hong Kong-listed Alibaba.com.
“Yahoo regards its investment in Alibaba as long-term, so the decision is quite negative for the stock, especially as it came after Jack Ma’s sale,” said Steven Liu, an analyst who rates Alibaba.com “sell” at DBS Vickers Ltd. in Hong Kong. “The stock is quite expensive now after the rally this year.”
Alibaba rose 3.7 percent to HK$21.15 in Hong Kong today. The stock has almost quadrupled this year, compared with the 45 percent gain in the city’s benchmark Hang Seng Index. Yahoo fell 16 cents to $15.43 at 10:19 a.m. New York time in Nasdaq Stock Market trading.
In 2005, Yahoo paid $1 billion and swapped its Chinese operations for a 40 percent stake in closely held Alibaba Group. In 2007, the U.S. company was one of eight “cornerstone” investors which subscribed to the $1.7 billion initial public offering of Alibaba.com, the biggest first-time share sale by an Internet company since Google Inc.’s IPO in 2004.
Boost Liquidity
Alibaba.com said in June that Yahoo, Cisco Systems Inc.,American International Group Inc. and other cornerstone investors would be allowed to sell their stakes immediately, five months before the expiry of a previously agreed lock-up agreement. The move was designed to boost liquidity of its shares, the Chinese company said at the time.
“We are pleased to learn of the Yahoo decision,” Alibaba spokesman John Spelich said in an e-mail today. The sale will help the company achieve broader ownership of its stock, he said.
Jeremy Seow, a Singapore-based spokesman at Yahoo, said he couldn’t immediately comment on the sale.
Thursday, March 20, 2008
| Yahoo Sees Blue Skies, but Clouds Brew in China | ||
| Yahoo Inc. is pressing its case to shareholders this week on why it's worth more than Microsoft Corp.'s bid for it, even as moves by its Chinese partner underscore investor doubts that Yahoo can stay independent. Alibaba Group, the Chinese Internet company that is 39% owned by Yahoo, is in advanced talks with investors to finance Alibaba's purchase of Yahoo's stake in an effort to expand its management independence should Microsoft's bid prevail, according to people close to the situation. While it's not pushing for a Yahoo sale, Alibaba believes that a change in control at Yahoo would trigger an opportunity for it to buy the stake under the companies' agreements, though that could be subject to interpretation. The talks signal Alibaba's belief that Microsoft could still succeed in its quest to buy Yahoo, which owns stakes in Internet companies in Japan, South Korea and China, where Alibaba is the third largest Internet search company. Alibaba's interest in purchasing the Yahoo stake could also represent a new wrinkle in any negotiations. For Microsoft, gaining Yahoo's Asia stakes was a key attraction when it made the bid Jan. 31, an offer now valued at about $42 billion. Alibaba's move coincided with the kickoff of Yahoo's roughly week-long road show at which company executives will meet with major shareholders to make the case that Yahoo's value exceeds Microsoft's offer, which company directors last month rejected as insufficient. Chief Executive Jerry Yang, Chief Financial Officer Blake Jorgensen and President Susan Decker are among those at the meetings, which began yesterday. As part of road-show documents filed with regulators, Yahoo reaffirmed its financial guidance for 2008 and projected strong revenue and cash-flow growth in 2009 and 2010, releasing financial projections first presented to its board in December. Based on the projections, it is easy to calculate a standalone value for Yahoo close to $40 a share, and any additional strategic value to Microsoft could make a deal worth more than that, says a person close to the situation. Microsoft's cash-and-stock offer, valued at $31 a share when first announced, has a value of about $29.49 a share based on Microsoft's price in 4 p.m. trading on the Nasdaq market yesterday. Some major Yahoo shareholders had previously said they expected Microsoft to raise its price and a deal to happen at about $ 35 a share. But it isn't clear whether Microsoft will increase its bid. The Redmond, Wash., technology company declined to comment. Analysts said Yahoo's reaffirmation of its modest guidance for the first quarter and the year means it's less likely to be vulnerable to a Microsoft takeover because it misses its projections. But they said it would be a stretch for Yahoo to hit its estimates for 2009 and 2010, which are well above current analyst expectations. "Those are not easy numbers," says Mark Mahaney, an analyst with Citi Investment Research, whose parent company has done business with Yahoo and makes a market in its shares. "We think it's the most likely outcome that Microsoft buys Yahoo, and at a higher price than $31," he adds. Imran Khan, an analyst at J.P. Morgan, estimates Yahoo's 2009 revenue at $6.4 billion after commissions paid to marketing partners are factored out. That is below Yahoo's guidance of $7.1 billion, in part because he isn't as optimistic as the company about search-related improvements. People familiar with the matter say that Yahoo's strong prospects in display advertising, such as banner ads, are central to the case the company is making to investors. Yahoo's road-show presentation doesn't include any specific mention of scenarios it has discussed with News Corp. and Time Warner Inc. about folding some of their Internet assets into Yahoo in return for significant Yahoo stakes. Such discussions about possible alternative deals -- considered long shots by people close to the situation -- haven't progressed, although as of earlier this week Yahoo and the possible partners were still talking, according to people familiar with the matter. News Corp. Chairman Rupert Murdoch said at a media conference last week that the company wouldn't get in a fight with Microsoft. ( News Corp. owns Dow Jones & Co., publisher of The Wall Street Journal.) If Microsoft's bid goes through, Alibaba aims to exercise a clause in its 2005 deal with Yahoo that exchanged Yahoo's China operation and $1 billion in cash for a stake in Alibaba. Alibaba believes the "right of first offer" clause in the agreement would be triggered by any Microsoft deal for Yahoo, say the people familiar with the matter. Under Alibaba's interpretation of the agreement, if Yahoo decides to transfer its stake in Alibaba to Microsoft as part of a broader deal, Yahoo would first have to offer that stake to other Alibaba shareholders. The Chinese company's other main shareholders include Alibaba management and Japan's Softbank Corp. Alibaba would finance the purchase of the stake with help from two lead investors and a group of others, including large Chinese institutions, the people say. Alibaba has hired Deutsche Bank and Wachtell, Lipton, Rosen & Katz as advisers, people familiar with the matter say. A Wachtell Lipton spokeswoman confirmed that the law firm has been hired as legal counsel. At the core of Alibaba's move is an effort to keep Chinese management control of Alibaba, say people familiar with the plan. Alibaba's management -- led by founder Jack Ma -- controls the company's operations despite Yahoo's stake and one board seat. Alibaba executives are concerned that Microsoft's size and history of hands-on management could jeopardize Alibaba's autonomy and its image as a Chinese company. China's government restricts Internet content and is suspicious of foreign Internet companies -- which, partly as a result, have fared worse than their domestic rivals in China. After Microsoft's bid for Yahoo surfaced, Chinese regulators contacted Alibaba about how it could be affected by a deal. Such concerns are partly driving Alibaba's search for alternative shareholders, the knowledgeable people say. Spokesmen for Alibaba and Microsoft declined to comment. Alibaba's efforts are bad news for Microsoft. While selling off Yahoo's stake would fetch a chunk of cash, the software maker would lose a foothold in an increasingly important market. Alibaba is one of China's biggest Internet companies, with a broad portfolio of businesses. Its flagship unit is Alibaba.com Ltd., a business-to-business trading platform that listed in Hong Kong in November 2007 after raising $1.7 billion in the biggest initial public offering ever by a Chinese Internet company. That unit reported on Tuesday that its profit more than quadrupled in 2007, while revenue jumped nearly 60%. Alibaba also runs Yahoo China, as well as a consumer-auction site, a payment- processing service, a software company and an advertising-trading platform. In Yahoo's road-show presentations to investors this week the company is valuing a portion of its Asian holdings at $12.6 billion, or $8.97 for each Yahoo share, based on Friday's prices. That includes Yahoo's 28% stake in Alibaba.com, which the company values at $3.2 billion, but not its stake in Alibaba Group's other, unlisted operations. Alibaba.com's share price has fallen sharply this week. But putting a value on Yahoo's entire stake could be difficult. Alibaba's nearly 80% stake in Alibaba.com, its Hong Kong-listed unit, is valued close to $ 8 billion based on its current share price. But the valuation of Alibaba's other businesses is tricky: Its Taobao unit is by far the dominant consumer auction site in China, but it is believed to have relatively little revenue because it offers most of its services free. If Microsoft acquires Yahoo, and Alibaba and Microsoft cannot agree on a price for Yahoo's stake in Alibaba, the shareholder agreement stipulates that the matter would then go to arbitration.
| ||
March 19, 2008
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