The headlines have been buzzing this week with word that tarnished former Internet titan Yahoo (Nasdaq: YHOO) will shutter its Chinese Internet music service, with many pointing out the move reflects a broader reshuffling in the online music space. But from my perspective, the much more intriguing question is whether this move represents the first small step before Yahoo withdraws from the market completely — a step that seems increasingly likely as it focuses on turning around its core US search business.
Tag Archives: Yahoo
News Digest: December 19 报摘： 2012年12月19日
The following press releases and media reports about Chinese companies were carried on December 19. To view a full article or story, click on the link next to the headline.
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- Chinese Internet Users Reach 550 Mln – MIIT (Chinese article)
- Qualcomm Powers 40 Pct China Mobile’s (HKEx: 941) TD-LTE Terminal Tender (English article)
- WuXi PharmaTech (NYSE: WX), PRA Form JV to Offer Clinical Research Services for China (PRNewswire)
- China Yahoo (Nasdaq: YHOO) to Halt Music Search Service (English article)
- US Slaps Duties On China Wind Towers, High-Level Talks Begin (English article)
Alibaba Retains Yahoo Ties 雅虎高管进入阿里巴巴董事会
There’s an interesting new announcement from leading e-commerce firm Alibaba, which could be simply a straightforward board appointment but could also signal a potential positive development for its stormy relationship with longtime US partner Yahoo (Nasdaq: YHOO). I’ll make a strong disclaimer now and say that everything I’m about to write is highly speculative, since there’s nothing in this new announcement besides the naming of a Yahoo senior executive to Alibaba’s board. But that said, the fact that Alibaba is making the announcement at all is noteworthy, since these 2 companies have not made many upbeat joint announcements in the recent past due to their difficult elationship under previous Yahoo CEO Carol Bartz.
News Digest: December 6 报摘： 2012年12月6日
The following press releases and media reports about Chinese companies were carried on December 6. To view a full article or story, click on the link next to the headline.
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- GM (NYSE: GM) Hints At Joining With China’s SAIC (Shanghai: 600104) In SE Asia (English article)
- China Mobile (HKEx: 941; NYSE: CHL) to Release Self-Branded Handsets (English article)
- Yahoo’s (Nasdaq: YHOO) Jacqueline Reses Joins Alibaba Group Board (Businesswire)
- Starbucks (Nasdaq: SBUX) Back On Expansion Path In Americas, China (English article)
- Thai Group Buys $9.4 Bln Ping An (HKEx: 2318) Stake From HSBC (HKEx: 5) (English article)
Worried Baidu Invokes “Wolf Spirit” 百度寻找“狼性”
An internal company memo penned by Robin Li, one of China’s richest men and founder of Baidu (Nasdaq: BIDU), has been buzzing through the domestic media, which are interpreting the message as the sign of a looming crisis at the nation’s leading search engine. The theme of the memo revolves around the concept of the “Wolf Spirit”, which Li says has been lost at his company that pioneered the online search market in China. (Chinese article) In place of that spirit, Baidu has become a more complacent panda-like creature that simply enjoys its easy domination of the search space and the billions of dollars in advertising revenue it reaps each year from the business.
Monster Roars Out of China 巨兽拟出售中华英才网
I’ve always wondered whatever happened to online job site ChinaHR since its purchase in 2008 by US industry leader Monster Worldwide (NYSE: MWW); now I have my answer with new reports that the tie-up has been more or less a failure and that Monster plans to sell its main China asset. This latest disaster shouldn’t come as a huge surprise to anyone, since Monster follows a long list of much better known US web giants that have also tried and failed in China, including Google (Nasdaq: GOOG), Yahoo (Nasdaq: YHOO) and eBay (Nasdaq: EBAY).
Walmart Overhauls Yihaodian 沃尔玛整合一号店管理层
There are a few interesting news bits on the e-commerce front, led by word that Walmart (NYSE: WMT) is busy overhauling the management at its newly acquired Yihaodian online store, in what looks like a questionable move that could set the company up for failure. Meantime, media are also reporting that the e-commerce arm of Tencent (HKEx: 700) is launching a direct assault on Jingdong Mall, in the latest chapter of China’s never-ending online price wars.
Alibaba Buy-Out: Slow Growth Ahead 阿里巴巴未来增速或放缓
Financial markets have given their verdict on the future growth prospects for e-commerce leader Alibaba, and frankly speaking the long-awaited assessment doesn’t look too exciting or promising. I said last week when word first emerged that Alibaba was near a deal to buy back 20 percent of its shares held by Yahoo (Nasdaq: YHOO) that the most interesting elements would be the valuation Alibaba got from the transaction, as well as the name list of investors. (previous post) For starters, the valuation that Alibaba got from the deal is a bit disappointing for a company whose value rocketed from just $2.5 billion when Yahoo first purchased its stake in 2005 to more than $30 billion last year on the explosion of China’s e-commerce market.
Qihoo Adds “Like” to Search Offensive 360推“拇指计划” 继续向搜索业务发力
Security software specialist Qihoo 360 (NYSE: QIHU) is continuing its Internet search offensive by adding a new ratings feature to its product, leading me once again to applaud its innovative approach for this new initiative despite my broader doubts about this company. Media are reporting that Qihoo has added the equivalent of a “like” function to its search results similar to the one now on Facebook, which lets web surfers rate whether or not they find particular sites useful. (English article; Chinese article)
Alibaba: Let’s Get the Roadshow Rolling 阿里巴巴：我们开始路演吧
After several years of keeping an extremely low profile, Alibaba founder and chief Jack Ma is suddenly coming back out into the open with some major interviews as the e-commerce giant gets set to embark on what could well become one of the longest roadshows for a China Internet IPO. In all fairness, an IPO may not be the only thing on Ma’s mind right now, following his company’s recent deal to purchase about half of the 40 percent of itself owned by Yahoo (Nasdaq: YHOO). Ma and Alibaba have made it known for a while that they intend to sell most or all of that reacquired stake to new investors, and various reports have appeared over the last month stating interest was coming from various investors, including sovereign wealth funds Temasek of Singapore and China’s own China Investment Corp, also known as CIC. In a strong break with the past few years, Ma himself has granted at least 2 new interviews to major media, with both Bloomberg and the Wall Street Journal featuring stories quoting the founder of China’s largest e-commerce company. (Bloomberg report; Wall Street Journal report) As a former reporter in the China Internet sector, I can recall how Ma was quite keen to do interviews in Alibaba’s early days, when he loved to say how his company and the Internet in general were leveling the playing field for small Chinese entrepreneurs. But then he largely stopped doing interviews over the past few years, as the company’s only publicly traded unit, business-to-business marketplace Alibaba.com (HKEx: 1688), saw its growth slow considerably, and as Alibaba’s relationship with Yahoo soured, and its various units became embroiled in a series of controversies. With many of those issues now settled, including the recent Yahoo purchase and the imminent privatization of Alibaba.com, Ma is clearly feeling more confident about stepping back into the spotlight to start trumpeting his company as it seeks to find major new investors and move towards its ultimate goal of an IPO for the entire group. I’ve had a look at the Wall Street Journal and Bloomberg reports, and have to say there’s nothing really ground breaking in either. Ma confirmed that he’s open to investments from Temasek and CIC, and the group’s CFO Joe Tsai also gave some financials, including that Alibaba’s main 2 consumer focused e-commerce sites, Taobao and TMall, collectively earned around $1.8 billion in revenue last year, and that both have profit margins of more than 50 percent. I suspect that Ma will become more public in the next few months as he courts new investors and tries to raise both his company’s profile and valuation even higher than the $30 billion level set with the Yahoo buyout. In terms of timing, I would expect to see the first big new investors on board as soon as the third quarter, and we could also simply see a single major announcement by the end of the year about a new investor group. As to the IPO, the company has given a time frame of 2015 for the offering, although I wouldn’t be surprised to see that moved up by a year or more if a much needed correction starts to accelerate in China’s e-commerce market and investors start to get nervous.
Bottom line: With many of its issues now behind it, Alibaba will raise its profile in the next few months as it seeks new investors and starts to build hype in the run-up to its eventual IPO.
Related postings 相关文章:
◙ Alibaba Buyout: Finally Something for Investors 阿里巴巴筹资为机构投资者提供良机
Alibaba Buyout: Finally Something for Investors 阿里巴巴筹资为机构投资者提供良机
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
