Yahoo and Alibaba had so many disputes over the past few years, they now have a partial joint ownership and a complicated relationship. Last week, the chairman of Alibaba Group Jack Ma at a forum at Stanford University in Silicon Valley expressed his interest of buying the entire Yahoo said “We are very, very interested.” However, the deal might burst due to the Committee on Foreign Investment in the United States (CFIUS).
Why Yahoo wants Alibaba?
Yahoo has about 178 million consumers visit Yahoo each month, which just behind Google with 183 million visitors. Yahoo is a great platform for read news and content, conduct online searches and read email, but lack of a strong ecommerce platform.
The company previously had its Yahoo Stores but did not go well, and it ceded to eBay in 2002 except in Asia and officially closed its marketplaces in North America in 2007, and shuttered its online payment service in 2004. And in 2010, Yahoo turned over Yahoo Shopping to Experian’s PriceGrabber in a partnership arrangement.
A few days ago, Yahoo began to talk about finding a new CEO after ousting of its CEO Carol Bartz. But can Jack Ma become the next CEO of Yahoo?
Alibaba is the biggest player in the ecommerce industry in China with its Taobao auction site, global Alibaba marketplace, and also its online payment service Alipay that launched back in July this year. In addition, Alibaba acquired two U.S. ecommerce firms last year that embrave eBay stores — Vendio and Auctiva, which allowed the company to approach more closely to the U.S. marketplace. The company also operated a platform named AliExpress to reach small merchants in the United States.
At the moment, Yahoo owns a 40 percent stake in Alibaba, Ma will be a big player in any deal done. Surely Ma is an ideal choice of the next CEO for Yahoo, but Alibaba might find it hard to get through Committee on Foreign Investment in the United States (CFIUS).
CFIUS is the federal interagency which review process for foreign investment deals as well as to determine whether the deal would have any impacts on United State security. Thus, there are statements suspected the deal is a threat to Yahoo mail users’ privacy, or maybe even affecting the security of U.S.
According to a senior fellow of New American Foundation said with doubt:
“Will American citizen feel safe to let a Chinese internet company to administrate Yahoo mail?”
Alibaba is now at least a little concerned about the feasibility of the deal and that Ma is “perplexed” about why the U.S. has such restrictive rules against foreign ownership of a consumer business, said by a source of AllThingsD.
Former English teacher once offered tours to English-speaking tourists of Hangzhou’s famed West Lake. Now runs one of China’s Internet companies Alibaba.com, in which Yahoo! and Tokyo-listed Softbank hold shares. Suffered rare publicity setback this year Alibaba.com when president David Wei resigned after the company disclosed fraud among suppliers. Alibaba Group in January unveiled plan to expand into logistics. He started the China Pages, one of the nation’s first internet companies in 1995. Three years later, founded Alibaba with $60,000 in capital, mostly to offer a way for companies outside of China to find manufacturers and suppliers inside China. Took his business portal Alibaba.com in 2007. [Forbes]
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