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Yahoo shares rise on Alibaba stake sale speculation

December 29, 2011 By: Dr Search Principal Consultant at the Search Clinic Category: Ecommerce, search engines, Technology Companies, Yahoo

Yahoo shares rose on speculation that the company is looking to sell its stake in China’s Alibaba Group and also Yahoo Japan.Yahoo shares rise on Alibaba stake sale speculationYahoo rose 6% on the Nasdaq stock exchange after the New York Times reported the firm was aiming to cut its Alibaba stake to 15% from 43%.

According to some estimates, the deal will value Yahoo’s Asian assets at £11 billion ($17 billion).

Yahoo bought its stake in Alibaba for £675 million ($1bn) in 2005.

Despite being one of the biggest brand names, Yahoo has seen its market share tumble amid growing competition.

The likes of Google and Facebook have not only surpassed it in the amount of users but have also seen advertisers flock to them, hurting Yahoo’s revenues.

Dwindling fortunes saw the company fire former chief executive Carol Bartz earlier this year and launch a strategic review of its operations.

There has been growing speculation about a takeover bid for Yahoo, with companies including Microsoft, Alibaba and private equity group Silver Lake being linked to a possible deals.

The main focus of Alibaba’s sale of its Asia assets will be on what developments take place with regards to its stake in Alibaba Group.

Alibaba is China’s biggest ecommerce group and Yahoo’s stake in it is considered by many as one of its most prized assets.

However, relations between the two firms have deteriorated reaching a tipping point earlier this year after Alibaba spun off its online payment business, Alipay.

Yahoo accused the Chinese company of hiding the move from it, saying the change had been made in August 2010, but it only found out about it in March this year.

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