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Yahoo! Inc. Benefits from the Company’s Stake in Alibaba

It has been reported that Alibaba posted a 66% sales surge in the final quarter of 2013 ahead of a potential U.S. initial public offering. The company primarily operates in the People’s Republic of China, and in March 2013 was estimated by The Economist magazine to have a valuation between $55 billion to more than $120 billion.

An analyst at Pivotal Research Group, Brian Wieser said that, “The Alibaba numbers were very, very strong.” According to the Financial Post, Wieser reported that “It’s certainly a very strong positive for Alibaba — and for Yahoo.” As of September 25, 2013, the company is seeking an initial public offering in the United States. Alibaba CEO, Jonathan Lu, confirmed this IPO again in July 2013, he is quoted in the press as saying, “We are ready and can do an IPO any time.” He also revealed that the firm has still not decided where to list, but is looking at the stock exchanges of New York and Hong Kong.

Chief Executive Officer Marissa Mayer continues to benefit from the company’s stake in Alibaba Group Holdings Ltd. which is based in Sunnyvale, California. Bloomberg News has reported that Yahoo! Inc. now owns about 24% of the Chinese e-commerce company. The word “yahoo” is an acronym for “yet another  Hierarchical Officious Oracle”.

Alibaba Group is a privately owned Hangzhou, China based group of Internet-based e-commerce businesses including business-to-business online web portals, online retail and payment services, a shopping search engine and data-centric cloud computing services. It has been reported that Alibaba Group’s sites account for over 60% of the parcels that are delivered daily in China.

Yahoo shares reportedly soared as much as 10 percent in extended trading after the company, Alibaba,  reported their first-quarter earnings. Yahoo stocks closed at an all-time high of $118.75 a share on January 3, 2000. However, after the dot-com bubble burst, it reached a post-bubble low of $8.11 on September 26, 2001.

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Image Credit: www.thewrap.com

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