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News Digest: June 5, 2012 报摘： 2012年6月5日

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The following press releases and media reports about Chinese companies were carried on June 5. To view a full article or story, click on the link next to the headline.

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◙ China’s Jingdong Mall to Go Public in Sept; Led by Former Merrill Executive (English article)

◙ Citi (NYSE: C) Launches RMB Exporters and Importers Letters of Credits in Latin America (Businesswire)

◙ Clean-up Work Made on a Small Oil Leak at CNOOC’s (HKEx: 883) Penglai 19-3 Oilfield (PRNewswire)

◙ China Development Bank May Lend Alibaba $1 Bln For Privatization – Source (Chinese article)

◙ LDK Solar (NYSE: LDK) Signs 3 Multi-Year Photovoltaic Project Development Agreements (PRNewswire)

Jingdong Mall: Back on the IPO Track? 京东商城上市：“狼”真要来了？

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After at least a month or 2 of silence from Jingdong Mall about its schizophrenic plans for a mega-IPO, the e-commerce giant that also goes by the name of 360Buy has suddenly vaulted back into the headlines with talk that it’s preparing a listing as soon as September. I honestly don’t know what to think of these latest reports anymore, as the company has sent so many contradictory signs on the IPO issue over the last year, with CEO Liu Qiangdong publicly denying plans for any such offering for at least a couple of years, even as unnamed people from the investment community say differently. I would have possibly have ignored these latest reports, except that they contain a level of detail that looks too deep to be purely gossip and speculation. (English article; Chinese article) According to one of the reports, Jingdong managers, including Liu Qiangdong himself, and their investment bankers met with analysts in Hong Kong earlier this week for 3 hours to discuss their plans, which include registration for a New York listing as early as June, followed by an actual IPO as soon as 3 months after that. Most of this news appears to be coming from analysts who attended the meeting, including one who said that Jingdong’s CFO was also present, as were representatives from major investment banks including Goldman Sachs (NYSE: GS), JPMorgan (NYSE: JPM) and CICC. During the meeting, Jingdong also reportedly made some of its first official disclosures about its sales, which apparently reached 21 billion yuan last year and are expected to more than double in 2012. There’s no mention of profits or losses, although most believe that Jingdong is losing big money due to a recent series of price wars with rivals like Alibaba’s TMall and Dangdang (NYSE: DANG). The report also discusses valuation, with 360Buy reportedly looking for a valuation of around $10 billion even though the investment banks said $6 billion is more realistic. This level of details leads me to believe that perhaps something is really happening, which would be consistent with some previous signals, and that we could actually see an IPO if the financial markets show even just a little improvement by this fall. If that happens, I would congratulate Jingdong for finally making up its mind after a past year of schizophrenic signals. As to whether anyone will want to buy into this offering, that’s a completely different story. I imagine that some investors will be tempted by the company’s position as China’s second largest e-commerce firm and big growth forecasts, but will no doubt be concerned about its losses. All that said, the offering could at least attract moderate interest, perhaps helping to breathe some life back into a moribund market for overseas Chinese listings.

Bottom line: The latest reports of an IPO as soon as September for e-commerce firm Jingdong Mall look like they may be credible, and could attract moderate investor interest.

Related postings 相关文章:

◙ Message to 360Buy: Make Up Your Mind! 京东商城IPO“暗战”

◙ E-Commerce: 360Buy Awaits IPO Window, Amazon Expands 京东IPO融资心切 亚马逊物流扩张加剧竞争

◙ Dangdang Loss Balloons In E-Commerce Wars 当当网在电子商务大战中亏损严重

Microsoft E-Commerce: Late to the Game Again 微软进军中国电商市场最终或以失败收场

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I suppose I should congratulate Microsoft (Nasdaq: MSFT) for finally realizing the huge potential of e-commerce in China, even though it’s quite late coming to this incredibly competitive space. Then again, no one will ever accuse Microsoft of being a leader in anything these days, as this company is clearly a follower that takes advantage of its dominant PC presence with Windows to force its way into other product and service areas developed by nimbler, more innovative companies. Chinese media are reporting that Microsoft, through its MSN platform, is planning to enter the crowded e-commerce space in China following the recent end of beta testing for its Chinese-language Bing search engine. (English article) The company didn’t provide any details, but it sounds like the new e-commerce platform will be somehow integrated with Bing, as well as Microsoft’s Windows platform that is also the dominant PC operating system in China, similar to the rest of the world. First off, I have to say that I’m amazed that Bing in China is just finishing up its beta testing, as Microsoft launched the site 3 years ago. Clearly it wasn’t fast-tracking Bing in China, which is obvious from the fact that the search engine is still a non-player in the market, similar to its status in the rest of the world despite Microsoft’s putting large resources into this key Internet area dominated by Google (Nasdaq: GOOG) globally and local search leader Baidu (Nasdaq: BIDU) in China. But let’s take a rest from my sarcasm about Bing, and turn my attention instead to this ludicrous new e-commerce initiative. I use the word “ludicrous” not because e-commerce isn’t an area filled with huge potential, but rather because Microsoft will stand little or no chance of success because the space is already so crowded with other much bigger names with far longer histories in the area. In terms of actual numbers, China’s e-commerce market was worth 500 billion yuan in sales in 2010, or nearly $100 billion, and is likely to hit the 1 trillion yuan mark by 2015 if current growth trends continue. But much of that growth has been fueled by a crowded field of both home-grown and international players who will be formidable rivals even for Microsoft. Just to name a few, the former category includes industry leader Alibaba, along with challengers Jingdong Mall, Suning and Dangdang (NYSE: DANG). In the latter category, retail giants Amazon (Nasdaq: AMZN) and Wal-Mart (NYSE: WMT) are both making aggressive pushes in the space, the former with a major expansion of its China website and the latter through its investment in another domestic player called Yihaodian. I’m not saying that entry at this late stage is impossible, as Microsoft does have some advantages that its rivals don’t have. But the lateness of this arrival, combined with the presence of so many well-funded, highly experienced rivals, make me fairly confident in saying that this new e-commerce initiative will ultimately end up a failure.

Bottom line: Microsoft’s new China e-commerce initiative is likely to fail due to its late arrival to the sector where it will face stiff competition from well-funded domestic and international rivals.

Related postings 相关文章:

◙ E-Commerce: Dangdang CFO Goes, Suning’s New Trip 当当网首席财务官请辞 苏宁进军在线旅游业

◙ China: Room for How Many Amazons? 中国电商市场到底有多大？

◙ Dangdang Loss Balloons In E-Commerce Wars 当当网在电子商务大战中亏损严重

Alibaba Buyout: Finally Something for Investors 阿里巴巴筹资为机构投资者提供良机

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E-commerce leader Alibaba’s long-awaited announcement that it will buy back 20 percent of its shares from Yahoo (Nasdaq: YHOO) is finally offering investors something they haven’t seen in a long time: A new chance to buy into a Chinese Internet firm that actually earns money. Unfortunately for most investors, they won’t have a chance to buy into the company anytime soon, as Alibaba is likely to sell most of its recently repurchased shares to big institutional buyers willing to fork over a minimum of tens of millions of dollars and more likely hundreds of millions of dollars for a piece of China’s top e-commerce company. But smaller institutional and retail investors could also get their opportunity in the not too distant future, with word that the buyout deal announced earlier this week provides strong incentives for Alibaba to make its own IPO by the end of next year, a deal that could help to return some excitement to the struggling market for Chinese Internet stocks. Just a day after announcing its landmark buyback, Alibaba is reportedly already in talks with a number of institutional buyers who want to purchase some of the stake, including Singapore’s massive sovereign wealth fund Temasek, which wants to invest some $500 million, according to a Chinese media report. (Chinese article) That kind of investment wouldn’t come as a surprise at all, as Temasek has always been particularly bullish on China, with a special interest in companies that are leaders in their spaces. Earlier this month Temasek purchased a major stake in ICBC (HKEx: 1398; Shanghai: 601398) for $2.5 billion, picking up shares that were being sold off by Goldman Sachs (NYSE: GS). (previous post) I would expect to see other major financial investors, including other sovereign wealth funds, insurance companies and pension funds, buying into Alibaba in these latest talks, with a probable minimum investment of $100 million each. On the other hand, don’t look for any new strategic investors like Yahoo to sign on in this new round of stake sales. That’s because Alibaba’s founder Jack Ma seems determined to run his own show and, based on his unhappy experience with Yahoo, doesn’t want strategic investors looking over his shoulder and offering suggestions. But while strategic investors may be out, Alibaba is clearly aggressively courting the financial investors, seeking to quickly sign them up to help it pay off the billions in debt it is assuming to buy back the Yahoo stake for a total of $7.1 billion. The company already counts such big names as Japan’s Softbank and Russia’s Digital Sky Technologies among its current investors, and will no doubt be looking for more high profile names to raise its own profile. While anyone with less than $100 million is unlikely to get a stake in this latest fund raising round, there should still be plenty of opportunity to buy into Alibaba for smaller investors if it moves ahead with an expected plan for an initial public offering by the end of next year. Such an offering could come as a big boost for Chinese Internet stocks in general, which were once investor darlings but have become pariahs over the last year due to a series of accounting scandals. Investors have also grown increasingly intolerant of Chinese web companies that are losing money, which describes the big majority of firms to list over the last 2 years. An Alibaba IPO would address both of those issues, providing a company with reliable accounting due to its relatively long history and major foreign investors, as well as a company that is highly profitable. From a broader market perspective, an Alibaba IPO will be good for the market by offering a quality company with strong long term prospects both at home and abroad. But on the downside, that offering won’t come for at least a year, meaning the broader market for China Internet companies could remain in the doldrums for quite some time unless another exciting offering comes along.

Bottom line: Alibaba’s new capital raising will offer good opportunities for institutional buyers, and an IPO as soon as next year could return some excitement to the weak market for China Internet stocks.

Related postings 相关文章:

◙ Yahoo, Alibaba in Slow-Motion Divorce 雅虎和阿里巴巴踏上漫漫离婚路

◙ Alibaba-Yahoo Buyout: Back to Square One 阿里巴巴股权回购重回起点

◙ Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远

Tencent E-Commerce: Another Money Loser IPO 腾讯电商：将又一个失败的

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I was amused to read this morning that Internet titan Tencent (HKEx: 700) may choose its money-losing e-commerce platform for its first IPO, following its recent reorganization into 6 business units to allow each of those areas to sink or swim by themselves. The reports are a bit unclear about the timing of a potential IPO, and indeed say that such an offering is just one possibility for the newly formed unit as it seeks to raise more money to eventually create a broader e-commerce platform, presumably similar to Alibaba’s highly successful TMall. (English article) If that’s the case, I hope that executives are reading the newspapers these days, as investor appetite for money-losing Chinese Internet IPOs is extremely low these days and showing no signs of improving anytime soon. The only company to make an overseas Internet IPO this year so far has been Vipshop (NYSE: VIPS), a money-losing discount retailer, and that was a complete disaster. Other potential offerings from Shanda’s online literature unit, called Cloudary, and leading group buying site LaShou have all been delayed or disappeared completely, although Shanda appears to be moving ahead with its offer after its surprise disclosure that Cloudary recently turned profitable. (previous post) In terms of Tencent’s e-commerce business, it seems to me like the unit’s biggest asset is the Tencent name itself, since Tencent is clearly China’s biggest Internet firm and its leading player in online games and instant messaging. On the other hand, Tencent has had much less success in areas like e-commerce, which rely on an older, more cash-rich demographic of users unlike games and its instant messaging that tend to draw people in the 15-25 year old age range. Tencent’s newly formed e-commerce unit contains its older Paipai online auctions business, also known as C2C, along with a more recently established B2B platform that I’ve never heard of. The unit’s new head says that one of its strengths is its strong social networking element, which presumably helps to create a community among online buyers. Social networking is certainly one of Tencent’s strengths, but I doubt whether its core base of young users, with their low consuming power, would be very attractive to most e-commerce sellers. All that said, I wouldn’t expect to see Tencent make an IPO for this new e-commerce unit anytime soon due to the current frosty market. If I were advising Tencent founder Pony Ma on how to proceed, I would tell him to make an IPO first for one of the company’s more successful units, such as its social networking or online games business, which would certainly create a bit more excitement among investors. But if e-commerce does go first in the march to market for these new little Tencents, look for weak investor interest and a stock that probably won’t go anywhere but down after its trading debut.

Bottom line: Tencent’s spin off and potential IPO for its money-losing e-commerce unit looks like a poor choice for its first IPO following its recent reorganization.

Related postings 相关文章:

◙ Tencent: Preparing for Breakup? 腾讯或为分拆铺路

◙ Shanda Cloudary Wows Investors With Profit 盛大文学利润令投资者惊叹

◙ Tencent in Monopoly Spotlight; Baidu Next? 腾讯被诉垄断 下一个是百度吗？

News Digest: May 22, 2012 报摘： 2012年5月22日

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The following press releases and media reports about Chinese companies were carried on May 22. To view a full article or story, click on the link next to the headline.

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◙ Alibaba Already in Fund-Raising Talks, Temasek to Invest $500 Mln – Source (Chinese article)

◙ China’s Wanda to Buy AMC Cinema Chain for $2.6 Billion (English article)

◙ Tencent (HKEx: 700) E-Commerce Subsidiary May IPO (English article)

◙ China Mobile (HKEx: 941) Spends 193 Bln Yuan Over 3 Years to Commercialize TD-SCDMA (Chinese article)

◙ China Mobile Subscribers Rise 1.1 pct to 1.02 Bln in April (English article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Yahoo, Alibaba in Slow-Motion Divorce 雅虎和阿里巴巴踏上漫漫离婚路

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UPDATE: Since writing this post this morning, Alibaba and Yahoo have announced an actual deal, whose terms are largely the same as those described below. Congratulations to both sides for finally reaching a deal!

It looks like I was wrong in predicting that the latest shake-up at the top of Yahoo (Nasdaq: YHOO) might derail its advanced discussions to sell back some or all of its stake in Alibaba to the Chinese e-commerce leader, with media now reporting that a deal is imminent that looks smart for Yahoo but also somewhat messy. To recap quickly, Alibaba has been trying for more than a year to buy back the 40 percent of itself that Yahoo purchased in 2005 when the 2 sides thought they could become good strategic partners. That relationship never really materialized and the situation became rather acrimonious instead, leading the 2 sides to pursue their divorce with talks that began last fall. After a false start due to unrealistic expectations by both sides, talks resumed a couple of months ago and it looked like the 2 sides might finally reach a deal. But then recently named CEO Scott Thompson abruptly had to resign last week after false claims were discovered in his resume, prompting me to say the departure could derail any progress in the latest buyback talks. (previous post) Now it seems the buyback talks must have been far more advanced than I realized, and that the Yahoo board wants to conclude a deal to give as a present to the new CEO who will eventually fill the spot vacated by Thompson’s abrupt departure. Media are saying that under the deal that could be announced as early as later today, Yahoo would only sell back half of its current Alibaba stake, or about 20 percent of the company for $7 billion, and retain the remaining 20 percent for the moment. Alibaba would then pursue an IPO in the next 18 months, at which time Yahoo would sell down half of its remaining stake, or about 10 percent of Alibaba, into the offering. (English article) Yahoo’s motivation for structuring the deal this way is relatively clear, though it looks a bit messy to me from Alibaba’s perspective. But Yahoo is clearly in the position of strength in these discussions since it’s the one holding the 40 percent Alibaba stake, and thus Alibaba has limited leverage to get what it wants out of a deal. From Yahoo’s perspective, the initial sale of 20 percent will instantly give it a nice cash infusion of $7 billion, and also show the world that its remaining Alibaba stake is worth another $7 billion or more, valuing Alibaba itself at a tidy $35 billion. That could help to quickly boost Yahoo’s laggard shares, which now value the company at just $18 billion, by boosting expectation that the company could soon use its new cash infusion to pay a dividend. What’s more, Yahoo could get more cash for future dividends if Alibaba can boost its valuation by the time of its IPO, which looks likely as the company is China’s e-commerce leader and most of its businesses are quite profitable. From my personal perspective, this deal doesn’t look too attractive since I really think these 2 companies need to get completely divorced, the sooner the better, so that each can move ahead with developing its business without unneeded distractions. But since neither Yahoo or Alibaba is asking me what I think, we’ll just have to proceed with this slow-motion divorce and eagerly await the day when these 2 companies with a stormy past finally complete their separation once and for all.

Bottom line: Yahoo’s imminent signing of a buyback deal with Alibaba looks like the beginning of a long and potentially messy divorce that will mostly benefit Yahoo.

Related postings 相关文章:

◙ Alibaba-Yahoo Buyout: Back to Square One 阿里巴巴股权回购重回起点

◙ Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远

◙ Alibaba, Yahoo: The Never-Ending Story 阿里巴巴股份回购“马拉松”再现曙光

News Digest: May 19-21, 2012 报摘： 2012年5月19-21日

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The following press releases and media reports about Chinese companies were carried on May 19-21. To view a full article or story, click on the link next to the headline.

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◙ Yahoo (Nasdaq: YHOO) Finally Set to Strike Alibaba Share Deal (English article)

◙ Tencent (HKEx: 700) Reorganizes Into 6 Units, Splits Off E-Commerce (Chinese article)

◙ China Cries Foul After US Sets Tariffs on Solar Imports (English article)

◙ NetEase (Nasdaq: NTES) Upgrades Youdao Search Engine (English article)

◙ China Unicom (HKEx: 762) Announces April Subscribers Data (HKEx announcement)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Tencent: Preparing for Breakup? 腾讯或为分拆铺路

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Tencent (HKEx: 700) is in the headlines today after releasing quarterly earnings that showed its profit continues to slow, but what caught my eye was another unrelated report saying that China’s leading Internet company is planning a major reorganization. I’ll discuss details of the reports in a moment, but from a bigger picture perspective I have to suspect that this reorganization — if it’s really happening — may be the prelude to a much bigger story that could see Tenent split up into several different companies in the next couple of years, either through its own initiatives or possibly under government pressure depending on the outcome of an ongoing anti-monopoly case. If such a split-up were to happen, investors in the current Tencent could reap big rewards by finding themselves holding stock in a number of promising smaller independent companies, including ones built around its highly successful online games and social networking businesses. Let’s look at the reorganization news first, as clearly that’s the most interesting. According to Chinese media reports, which cite unnamed industry sources, the reorganization now underway would see Tencent divide itself into 6 major groups, including one focused on social networking and another on interactive entertainment. (English article). Long-time followers of Tencent will recall the company started out as an instant messaging specialist that went on to leverage its dominant QQ service to enter a wide array of other Internet spaces, from online games, to search, video and e-commerce. The company is now China’s largest Internet firm, with a market capitalization of nearly $52 billion. The only other Internet firms that even come close to that are online search leader Baidu (Nasdaq: BIDU), with a market cap of about $43 billion, and privately held e-commerce leader Alibaba, which is thought to be worth about $30 billion. Unlike Baidu and Alibaba, which are both focused around a single core area, Tencent’s businesses are quite diverse, which is why a break-up would make more sense to let each separate business are improve its focus and sink or swim by itself. Impetus for such a move may not only be coming from within Tencent, but could also soon come from the government, depending on the outcome of an important anti-monopoly case now being heard in Guangdong province. That case, which opened last month, saw another Internet firm accuse Tencent of using its monopoly status in instant messaging to unfairly dominate other areas as well. (previous post) If Tencent loses that case, which could easily happen, it will suddenly come under big pressure to remedy its monopoly status, which could make a break-up more likely. Meantime, I should also take a quick look at Tencent’s latest quarterly results, which showed that its first quarter net profit grew an anemic 2.8 percent, even as revenue grew a much bigger 52 percent. (results announcement) The weak profit growth despite the big rise in revenues probably reflects Tencent’s highly diversified nature, which includes big new revenues but also big new spending on new businesses. That’s all the more reason the company should break itself up and make each of its different units stand alone as separate entities. Such a move would benefit not only the company itself, but also would satisfy critics of its anti-competitive behavior.

Bottom line: Tencent’s reported reorganization could be a prelude to a break-up, which would benefit investors and appease critics of its anti-competitive behavior.

Related postings 相关文章:

◙ Tencent in Monopoly Spotlight; Baidu Next? 腾讯被诉垄断 下一个是百度吗？

◙ Disney, Tencent Tie-Up to Animate China 迪斯尼、腾讯合作研发动漫

◙ Tencent Shakes Up Search, Group Buying 腾讯搜搜、高朋网巨

China: Room for How Many Amazons? 中国电商市场到底有多大？

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China’s e-commerce space seems to get noisier by the day, with about a half dozen companies vying to become the nation’s next Amazon (Nasdaq: AMZN) by launching a steady stream of new initiatives in recent months taking them into a dizzying array of new product areas, many far removed from their roots. But at the end of the day there may only be room for 2 or possibly 3 mega online retailers in the market, and we should expect to see many of these aggressively expanding players ultimately either merge with rivals, or more likely quietly shutter their online shops in the next 1 to 2 years as they feel the heat of excessive competition now gripping the market. The latest in the steady flow of new initiatives has Suning (Shenzhen: 002024), better known for its bricks-and-mortar shops selling home appliances and electronics, opening a wine shop this week on its fast-expanding e-commerce site. (English article) News of this new online direction actually first emerged last month, along with reports that Suning would also get into the even more unrelated business of online travel services. Suning is hardly the only one to be branching into all kinds of strange new directions these days in the online space. Its forays into wine and travel come as the country’s second largest e-commerce site, 360Buy, which also goes by the name of Jingdong Mall, has also embarked on its own series of strange initiatives far beyond its original focus as an online electronics seller. Earlier this year the company launched a new book-selling business, and more recently reports have emerged that it will also get into the somewhat unrelated real estate and travel services businesses. (previous post) Then there’s Dangdang (NYSE: DANG), China’s only publicly listed e-commerce company, which began life as an online book seller similar to Amazon. But also similar to Amazon, the company has recently expanded into a number of new directions, including a major tie-up with GOME (HKEx: 493), one of China’s top bricks-and-mortar electronics retailers, in a bid to enter the online market for electronics and home appliances. If all of this is starting to sound like everyone is stepping on everyone else’s turf, it’s because that indeed seems to be what’s happening, with apparently little or no regard for profits or focusing on strategic new areas to complement existing core businesses. Not to be outdone in all this, the nation’s leading e-commerce site TMall, owned by Alibaba, is reportedly gearing up to significantly beef up its presence in the electronics space by signing major names like Philips (Amsterdam: PHG), Lenovo (HKEx: 992) and LG Electronics (Seoul: 066570) to an expanded area in its online mall dedicated to the highly competitive space. Outside all this expansion by domestic names, US retailing giants Wal-Mart (NYSE: WMT) and Amazon itself are also aggressively building up their China presences, the former through its investments in another major site called Yihaodian and the latter through its Joyo platform purchased several years ago, which recently changed its name to Amazon China. The Chinese e-commerce market is certainly big and can support more than one major player, though I seriously doubt it can support all these big names now scrambling to get into just about any new area they can find. The broader e-commerce market itself was worth around 500 billion in 2010, meaning perhaps its now worth about $100 billion — certainly not a small sum but also not enough for all the companies now chasing that limited pot of dollars. At the end of the day, look for 2 or perhaps 3 of these big players to survive in the longer term, with profitable companies like TMall and ones with cash-rich backers like Amazon China and Yihaodian, standing the best chances for success. But even those companies may have to make major adjustments before the current situation stabilizes, bringing widespread pain to nearly everyone as players open and close new business areas before they find the right mix.

Bottom line: The recent rapid expansion of major e-commerce firms into new product areas is unsustainable, and will end with many failures before 2-3 players emerge after a coming cleanup.

Related postings 相关文章:

◙ Alibaba’s Tianmao Takes on Electronics 天猫发力家电市场

◙ Dangdang, GOME In New Alliance, More to Come 国美携手当当网 或开启类似合作序幕

◙ 360Buy Losing Focus With Travel Plan 京东商城涉足在线旅行服务业 偏离核心业务

 

Alibaba-Yahoo Buyout: Back to Square One 阿里巴巴股权回购重回起点

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When the history books are finally written, the ongoing divorce between e-commerce leader Alibaba and its controlling stakeholder Yahoo (Nasdaq: YHOO) could well go down as one of the longest in corporate history. But unlike the case with most divorces where messy issues like who gets to keep what assets complicates the matter, this case will see Yahoo taking most of the blame for the protracted delays, which have been extended yet again with the sudden resignation of Scott Thompson just a half year after he took over as CEO of the tarnished US Internet giant. (English article) For those who haven’t followed this story too closely, Thompson has been the subject of a tempest-in-a-teapot scandal over the last couple of weeks after a dissident Yahoo shareholder discovered the new CEO had made misstated part of his degree on his resume, claiming a double degree when in fact he only had a single one. Perhaps I’m being too harsh in calling this scandal a tempest in a teapot, as clearly it’s improper to exaggerate on one’s resume. At a more fundamental level, this gaff does seem to highlight the dysfunctionality that seems to be all too common at Yahoo these days, which brings me back to the original point of this posting, namely that this latest development will deal yet another major setback to Yahoo’s long and tortured talks to sell back some or all of the 40 percent stake it owns in Alibaba. To recap briefly, the pair were all smiles when they first announced their union in 2005, with Yahoo buying its 40 percent of Alibaba — now worth more than $10 billion — for just $1 billion. The honeymoon didn’t last for very long, and relations soured considerably under the brief tenure as CEO of Carol Bartz, who repeatedly clashed with Alibaba founder Jack Ma before her abrupt firing last September. (previous post) With Bartz out of the picture, Yahoo started to negotiate a sale of the stake back to Alibaba last fall, but unreasonable expectations by both sides, combined with a lack of leadership at Yahoo later caused those talks to collapse. After Thompson’s hiring, both sides returned to the bargaining table earlier this year, and foreign media were reporting as recently as a week ago that a deal might be just weeks away that would see Yahoo sell 15-25 percent of its stake back to Alibaba. I suspect that Thompson was a major driver of that deal, as he was clearly in control and keen to resolve that issue so he could focus on his much bigger task of returning Yahoo to health. If that was the case, that means that Thompson’s resignation, which has also thrown Yahoo’s board into turmoil, could easily mean the deal being negotiated will now be scrapped. What’s more, the board, which has named an acting CEO, is likely to take at least another couple of months to name a new long-term chief executive, who will then need to get acquainted with the company before relaunching any buyback talks. At this rate, I seriously doubt the 2 sides will be able to reach a deal this year, and the earliest we could see an end to this troubled marriage would be in the first half of 2013.

Bottom line: The sudden resignation of Yahoo’s new CEO will further delay its ongoing divorce with Alibaba, with a deal unlikely until the first half of 2013 at the earliest.

Related postings 相关文章:

◙ Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远

◙ Alibaba: Let’s Get This Show Finished 阿里巴巴和雅虎赶紧“离婚”吧

◙ Yahoo: A Good Time to Break From Alibaba? 雅虎与阿里巴巴分手时机还不成熟