Yahoo was founded by Jerry Yang and David Filo in January 1994 and was an early pioneer in the dotcom boom, but was quickly overhauled by Google and others. In 2008, it rejected a US$44.6 billion bid from Microsoft, and subsequently Yahoo’s market capitalisation slipped to just US$22.24 billion just three years later.
Yahoo to keep bigger stake than planned in Alibaba after IPO
Yahoo said on Tuesday it would keep a larger stake in Alibaba Group than originally planned after the Chinese e-commerce giant goes public, hoping to profit from the company’s future growth.
Alibaba is expected to file for an estimated US$15 billion IPO next year, valuing the operator of retail, auction and content websites at more than US$100 billion.
The initial publice offering is one of the most eagerly anticipated internet debuts since Facebook last year.
Alibaba has decided not to list its shares in Hong Kong but has not yet committed to listing on any other exchange, including the New York Stock Exchange, chief executive Jonathan Lu said last week.
Under the terms of an amended agreement that Yahoo announced alongside its quarterly results, the US internet giant will sell up to 208 million of the 523.6 million Alibaba shares it owns, either directly to the Chinese company or through the IPO. That is lower than a previously agreed maximum of 261.5 million.
After the IPO, Yahoo said, it would have the right to sell its remaining Alibaba shares at its discretion.
A spokesman for Alibaba said the terms of the previous agreement, which permitted Yahoo to sell only after a one-year lock-up period following the IPO, would remain in force.
On Tuesday, Yahoo announced second-quarter results from Alibaba, in which it holds a 24 per cent stake, underscoring the Chinese company’s rapid growth.
Alibaba’s revenue grew 61 per cent to US$1.74 billion in the April to June period, while net income jumped 159 per cent to US$707 million.