Yahoo buys US$1 billion stake in Alibaba
(AP)
Updated: 2005-08-11 15:29

Yahoo Inc. announced Thursday it would pay US$1 billion in cash to acquire a 40 percent stake in the Chinese e-commerce firm Alibaba.com, the Associated Press reported.

As part of the deal, Yahoo has also agreed to contribute its China business, Yahoo! China, to Alibaba, according to a joint statement from the two companies.

Alibaba.com chairman and CEO Jack Ma (L) shakes hands with Yahoo Inc. COO Daniel Rosensweig during a joint news conference in Beijing August 11, 2005. [newsphoto]

The agreement makes Yahoo the largest strategic investor in Alibaba.

The combined entity would also include 3721.com, a Chinese language search engine that Yahoo acquired last year, it said.

Yahoo will have 35 percent of voting rights in Alibaba as a result of the investment, said the statement, which was distributed at a press conference in Beijing.

The deal is the biggest yet in a flurry of investments in China by foreign Internet companies eager for a share of a market with more than 100 million people online.

The alliance between Yahoo and Alibaba represents a challenge to U.S.-based eBay, the world's biggest online commerce company, which in 2003 bought a Chinese portal, eachnet.com.

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