Industry watchers are seeing the move in different lights: some note that the sale puts a negative pressure on Alibaba’s stock, and may indicate tension between the two companies, particularly in the wake of Yahoo’s ten-year partnership with Microsoft on search technology. Yahoo’s stake in Alibaba was generally considered ripe for sale to bolster the company’s bottom line as it struggled for financial stability after rebuffing Microsoft’s massive takeover offer in 2008, indicating there may be some sentiment among Yahoo’s leadership that it’s time to disconnect from Alibaba. Yahoo’s sale also comes after Alibaba co-founder Jack Ma sold off a portion of his shares in the company last week; the sale netted Ma about $35 million, but amounted to less than 5 percent of his total holdings in Alibaba.
On the other hand, some say the sale is merely a profit-taking activity the reflects on the success of Yahoo’s more-than-$1-billion investment in Alibaba back in 2005—and, indeed, Yahoo CEO Carol Bartz has indicated Yahoo continues to want to access the Chinese market through Alibaba, rather than launching its own business in China.
Yahoo has faced international scrutiny for its role in the Chinese market, particularly in turning information on pro-democracy bloggers and other dissidents to Chinese authorities.
