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Yahoo intends to keep Alibaba stake

Yahoo CEO Carol Bartz says the company intends to hold on to its 39 percent stake in China’s Alibaba, despite “constantly” being approached about full or partial buyouts of its share in the company. In an interview with Reuters, Bartz indicated Yahoo has no plans to sell. “People are wringing their hands about what to do in the China market&helllip;this is a great way to get upside in the China market.”

Bartz’s flat intention to hold tight to Yahoo’s stake in Alibaba comes after recent reports the company was planning to sell for a price tag upwards of $10 billion. Alibaba has made no secret that it would like to eliminate or reduce Yahoo’s control of the company, with serious reports of negotiations surfacing early this summer. However, Alibaba says that its offer of a partial buyout was countered with a proposal from Yahoo they found “unjustifiable,” so negotiations between the companies were terminated.

The Alibaba Group is China’s largest e-commerce operation; in addition to owning the Alibaba service, it also runs the e-commerce site Taobao and the online payments service Alipay.

Yahoo also owns a 35 percent state on Yahoo Japan. With Yahoo struggling in the North American market, some industry watchers have values Yahoo’s Asian investments at anywhere from 30 to 40 percent of the company’s overall value.

Yahoo has been targeted by criticism for its operations in China; Alibaba has repeatedly turned over information on bloggers and human rights activists to Chinese authorities. In some cases, that information has served as evidence sending users to prison. Alibaba executives have also indicated a dissatisfaction with their relationship with Yahoo, with Alibaba’s CEO telling Bloomberg last week that Yahoo had no value to them without its own search technology—Yahoo is in the process of turning all back-end search operations over to Microsoft’s Bing, although Yahoo will continue to develop its own search front ends.

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