As the Alibaba Group’s IPO upon us, there’s much speculation that Alibaba Group may buy Yahoo! Inc. (NASDAQ:YHOO).
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Forbes suggested recently that even if Alibaba Group picks up Yahoo! Inc. at a premium, it would still save enough in taxes to pay for it and then some.
Former Yahoo! CEO Dan Rosensweig told Jon Erlichman and Cory Johnson on Bloomberg:
“Well, it’s complicated to know what to make of it because it’s very different than their strategy actually in China. Their strategy in China is that they start companies, they own them or they buy them, but they don’t necessarily invest in them. So what it looks like to me is, first of all, I think, they have learned that the value of investing in some of these companies, I did it, we did it at Yahoo! Inc. into Alibaba has made a fortune for Yahoo! Inc. that there is a way for them to return both by investing in these companies and seeing whether or not they achieve success on their own.”
Like he says, it’s complicated.
Alibaba Group is a privately owned Hangzhou-based group of Internet-based e-commerce businesses including business-to-business online web portals, online retail and payment services, a shopping search engine and data-centric cloud computing services. The company primarily operates in the People’s Republic of China,
In 2012, two of Alibaba’s portals together handled $170 billion in sales, more than the combined sales of eBay and Amazon.com. In March 2013 was estimated by The Economist magazine to have a valuation between $55 billion to more than $120 billion.
According to Rosenswieg, the Alibaba Group is trying to figure out where it’s going to expand beyond China and Asia.
Cory Johnson noted that the Chinese Government favors its own companies, while making life less than easy for U.S. tech companies. He was wondering if Alibaba continue to receive the Chinese favor should it acquire a stake in a company outside China.
So will Alibaba Group acquire Yahoo! Inc.?
“Well, it [Alibaba Group] is in a position to buy it now, well, I have always believed that if there is going to be a transaction, it is more likely to be Softbank than it is to be Alibaba, ” Rosensweig suggested.
He says “well” a lot, doesn’t he?