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China’s Alibaba hires U.S. lobbying firm

Geoff Duncan
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China’s Alibaba Group has hired the high-power Washington D.C. lobbying firm Duberstein Group Inc., in a sign that the company is planning something that will require significant smoothing and persuasion in the U.S. capital. Industry speculation is centering on Alibaba maneuvering to buy back or reduce Yahoo’s stake in its company—or, if that fails, trying to take over Yahoo outright.

The Alibaba Group is one of China’s Internet success stories, running the e-commerce Alibaba site as well as Taobao consumer shopping site and controlling the AliPay online payment platform. Yahoo owns a 40 percent stake in Alibaba, and those holdings have turned into one of Yahoo’s most valuable assets in recent years as Alibaba’s fortunes have soared and Yahoo’s have stagnated in the wake of Microsoft’s unsuccessful hostile takeover offer back in 2008.

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Japan’s Softbank is also listed as an Alibaba affiliate in the Duberstein Group’s disclosure. Softbank is the majority stakeholder in Yahoo Japan, controlling about 40 percent of Yahoo Japan compared to Yahoo’s 33 percent. As with Yahoo’s Alibaba holdings, Yahoo’s stake in Yahoo Japan has become important to the company’s bottom line, since Yahoo Japan continues to thrive.

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Reports in Reuters and the Financial Times cite sources claiming Alibaba has retained Duberstein in the event it has to make a bid to take over Yahoo in its entirety. Although Alibaba chief Jack Ma has previously expressed interest in acquiring Yahoo, U.S. investment regulations might make such a transaction difficult, meaning Alibaba would likely have to partner with domestic investment groups as well as Softbank to pull a deal together.

The move marks the first time Alibaba has registered to lobby the U.S. government. Under U.S. law, firms are required to make disclosure of particular events within 45 days, including making contact with public officials. The date of Duberstein’s filing is December 1, which could indicate Alibaba’s efforts in Washington D.C. began as early as mid-October.

The Duberstein Group is headed by Kenneth Duberstein, who served as White House chief of staff under Ronald Regan. The firm’s clients include Goldman Sachs, BP America, Pfizer, and PepsiCo.

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Geoff Duncan
Geoff Duncan
Former Digital Trends Contributor
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