Wednesday, July 6, 2011

Alibaba CEO, Jack Ma, Announces That All Board Members, Including Yahoo, Were Discussing Alipay Dissolution since Three Years


The CEO of AliBaba, the largest Chinese online retailer company, has been constantly been tied up with endless boardroom talks as two of the chief stakeholders of the company give critical disagreement on a decision. The divergence in opinion came between the management when the company announced to give the control of its online payment service exclusively to the Chinese citizens, making it a disconnected entity from AliBaba Group. The chairman, C.E.O., and the key person behind AliBaba group, Jack Ma, recently stated at the All Things D’s Digital conference, that this move was extremely necessary for ensuring that AliPay gets licensed by the Chinese regulatory authorities. He claimed that this option was being constantly discussed with all stake holders since three years now and, according to him, there is now way possible that board was unaware of this move. AliBaba Group has been facing major criticism in this regard specifically from its 43 percent shareholder Yahoo Inc.
Image representing Alipay as depicted in Crunc...Image via CrunchBaseSince the announcement of Alipay’s spinoff on 10th May, the shares of Yahoo Inc have downed by almost 15 percent, eradicating a complete $3.5 billion off of its market value. Ma is now the only person running the online payment system, and not Yahoo Inc., which Ma defended by saying that "We've been discussing that for over three years, so it's impossible that the board does not know that." He also stated that "somebody has to take responsibility. Somebody has to take the leadership to move things ahead. ... If we do not get the license, Alipay's gone, Alibaba's gone."

Yahoo Inc. is now demanding Alibaba to compensate it, for losing an asset, such as AliPay, from its portfolio. Just last week, the C.E.O. of Yahoo Inc., Carol Bartz, confirmed to the stock market analysts that Yahoo Inc. will be "appropriately compensated" for the losses suffered on the cost of Alipay. Whereas Ma has reportedly claimed that the negotiations with Yahoo and another prominent Alibaba investor, Japan's Softbank Corp. are complicated, He stated that it’s "like peace talks at the United Nations," though he constantly kept an optimistic attitude assuring that the companies will reach a deal.
Ma has justified his moves and planning by asserting that he wanted back some shares since AliBaba is “such a huge company and the management and the co-Chinese partners are only very small." He implied that "Japan's big, and the U.S. is big. So if we can do something to adjust that, I would be very happy."