Yahoo spends billions on Alibaba.com

YAHOO AND CHINESE e-commerce company Alibaba.com have agreed to form a long-term partnership in China, where Yahoo will offer its Yahoo! China business to Alibaba.com and the companies will work together to grow the Yahoo brand in China.

Yahoo is investing $1 billion for Alibaba.com shares from the company and shareholders, which will give Yahoo a 40% economic interest with 35% voting rights, making it the largest investor in Alibaba.com.

The new, combined entity will include Alibaba International, Alibaba China, AliPay, Taobao, and the Yahoo! China properties. The joint effort will create one of the biggest Internet companies in China, and will be the only one with a leading position in sectors such as business and consumer e-commerce, communications and online payments.

The deal should be done in the fourth quarter of 2005, and is valued overall at just over $4 billion. µ