But just as quickly as it began, Yahoo and the Alibaba Group, the Chinese Internet giant that Yahoo partly owns, said Sunday that they were working to resolve the fight.
The announcement is a bid to end a feud that erupted after Yahoo said in a regulatory filing last week that Alibaba had transferred the assets of its online payment unit, Alipay, to a Chinese company controlled by Alibaba’s chief executive, Jack Ma.
Shares of Yahoo plunged after the statement over concern that the transfer may have eroded the value of Yahoo’s holdings in Alibaba, one of its prized assets.
Confused by the dispute, investors punished Yahoo’s stock last week, wiping out more than $2 billion in market value. Investors had bid up shares of Yahoo in recent months, partly because of projections about the future value of its Alibaba holdings.
Some investors accused Yahoo of failing to properly disclose the asset sale; others said the sale could be a sign that Yahoo was losing control of its stake in Alibaba.
The fight over the asset sale has become the latest wedge in a partnership that began five years ago, with a confetti-filled news conference in Beijing to announce that Yahoo had agreed to pay $1 billion for a 40 percent stake in Alibaba. As part of that deal, Alibaba also agreed to take control of Yahoo’s Chinese language Web site.
Since then, Alibaba has grown into a Chinese Internet powerhouse, with an array of fast-growing units, including a business-to-business Web site called Alibaba.com.
Yahoo, on the other hand, has had its fortunes decline after a takeover battle with Microsoft and the decision of a co-founder, Jerry Yang, to step down as chief executive. He was succeeded by Carol Bartz in January 2009.
With Google holding much of the online search market and Facebook the dominant social networking site, investors believe much of Yahoo’s value is tied to Asia, locked up in its stakes in Yahoo Japan and China’s Alibaba.
Investors in Yahoo became nervous after privately owned Alibaba last week released a series of statements saying the asset transfer began in July 2009 and was completed a year later.
Alibaba executives say the transfer was legal and necessary because of China’s new regulations governing electronic payment platforms. But on Friday, Yahoo suggested that it did not know about the transfer of the Alipay division until this March and that Yahoo and other Alibaba shareholders had not approved the sale.
“There is clearly bad blood between Jack Ma and Carol Bartz,” said Colin Gillis, an analyst with BGC Financial. “The soap opera continues.”
The two companies on Sunday, however, said they would work with another Alibaba shareholder, Japan’s Softbank Corporation, to resolve the issue. Japan’s Softbank and Yahoo together own about 70 percent of the Alibaba Group.
“Alibaba Group, and its major stockholders Yahoo! Inc. and Softbank Corporation, are engaged in and committed to productive negotiations to resolve the outstanding issues related to Alipay in a manner that serves the interests of all shareholders as soon as possible,” Yahoo and Alibaba said in a joint statement.
John Spelich, an Alibaba spokesman in Hong Kong, said Sunday that the Alibaba Group had already received some compensation for Alipay, though he declined to say how much.
Speaking on Saturday at an annual general meeting in Hong Kong, Mr. Ma, the Alibaba chief, said that the transfer was made to help Alibaba’s fast-growing e-commerce site, Taobao, which uses the Alipay system.
“If Alipay were illegal or didn’t get the license, Taobao would be paralyzed,” Mr. Ma said referring to the Chinese government’s new requirement regarding online payment licenses. “If Taobao were paralyzed, how could Alibaba reform and develop?”
Yahoo, which is based in Sunnyvale, Calif., declined to comment over the weekend. But a person close to the company said that Yahoo executives knew as early as 2009 that a majority stake in Alipay would be transferred temporarily but the company was unaware until March that the transfer had been completed.
David Barboza reported from Shanghai and Verne G. Kopytoff from San Francisco.
Article source: http://www.nytimes.com/2011/05/16/technology/16yahoo.html?partner=rss&emc=rss
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