Yahoo, Alibaba End Dispute, Look to Negotiate 'Outstanding Issues'

By Beecher Tuttle May 16, 2011

Yahoo and Alibaba are making amends following a very public dispute regarding a controversial ownership transfer of one of the Chinese Internet giant's most profitable websites.

The two technology firms made a united stand on Sunday, less than a week after trading public barbs in the media. Yahoo, which maintains a 43 percent stake in Alibaba, said last week that the Chinese firm transferred ownership of its Alipay online-payment business to another company without informing Yahoo or its board.

Alibaba spun-off the website to a company owned by chief executive Jack Ma in August of last year to comply with various Chinese restrictions. However, Yahoo said last week in a statement that it didn't learn of the transfer until March 31.

The news sent Yahoo shares spiraling downwards, based on the perception that its piece of Alibaba is now less valuable without one of its most important assets. Alibaba disagreed with claims, noting that it had informed Yahoo of the transfer during a July 2009 meeting. Ma told shareholders at a meeting in Hong Kong that the transfer was “100 percent legal and 100 percent transparent.”

Yahoo and Alibaba tried to put the bad blood behind them on Sunday with a joint statement.

“Alibaba Group, and its major stockholders are engaged in and committed to productive negotiations to resolve the outstanding issues related to Alipay in a manner that serves the interests of all shareholders as soon as possible,” the statement said, in its entirety.

The two tech giants have had a rocky relationship ever since Yahoo made its initial investment in Alibaba more than six years ago. Previous battles have concerned Alibaba's management of the Yahoo China website and its desire to buy back its stake from the American company, according to the Wall Street Journal.

Yahoo's net profit dropped 28 percent in the first quarter of 2011, while Alibaba.com income increased by 37 percent. As of Friday, Yahoo shares were down 11 percent since Yahoo's acknowledgment of the transfer.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.




Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Consumer Privacy in the Digital Era: Three Trends to Watch

By: Special Guest    1/18/2018

Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on …

Read More

CES 2018: Terabit Fiber - Closer Than We Think

By: Doug Mohney    1/17/2018

One of the biggest challenges for 5G and last mile 10 Gig deployments is not raw data speeds, but middle mile and core networks. The wireless industry…

Read More

10 Benefits of Drone-Based Asset Inspections

By: Frank Segarra    1/15/2018

Although a new and emerging technology, (which is still evolving), in early 2018, most companies are not aware of the possible benefits they can achie…

Read More

VR Could Change Entertainment Forever

By: Special Guest    1/11/2018

VR could change everything from how we play video games to how we interact with our friends and family. VR has the power to change how we consume all …

Read More

Making Connections - The Value of Data Correlation

By: Special Guest    1/5/2018

The app economy is upon us, and businesses of all stripes are moving to address it. In this age of digital transformation, businesses rely on applicat…

Read More