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Yahoo's $1 billion investment looks like ending in an $18 billion joy day


By Noel Young, Correspondent

December 22, 2011 | 3 min read

Yahoo is thinking about selling off billions in assets in Asia, principally a big chunk of its stake in the giant Chinese internet sales company Alibaba - whose boss Jack Ma originally talked about buying Yahoo himself.

Yahoo: $18 billion deal?

The Silicon Valley giant at the moment has a 40% stake in Alibaba, which it bought for just $1 billion in 2005, and a 35% stake in Yahoo Japan. It would end up out of Japan and with 15 percent of Alibaba .

A complex proposed deal would see Yahoo shedding most of its Asian assets narrowing its focus and rewarding stockholders, said the Wall Street Journal.

About $18 billion would finish up in its coffers.

To give you an idea of the scale of the deal, Yahoo’s whole market capitalisation on Wednesday before news of the discussions broke, was about $18.5 billion.

Yahoo would be able to return return cash to shareholders, some of whom have been getting antsy about its performance. Yahoo, who sacked CEO Carol Bartz three months ago, could then focus on turning around its core Internet advertising business under a new leader.

The proposed transaction is now being reviewed by a Yahoo board committee leading a strategic review which began when Bartz was sacked.

Directors “want to know more” before they bless the transaction, said the Wall Street Journal, quoting a person familiar with the matter.

Shares of Yahoo rose on news of the potential deal, closing Wednesday up 6%, or 88 cents, to $15.99.

Yahoo is still a huge internet presence, owning some of the Web’s most popular sites . It brings in more than $4 billion a year from online ads but it has been left behind recently by the powerhouses Google and Facebook .

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