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The relationship between Yahoo and Alibaba began amicably but deteriorated as the Yahoo went through successive CEOs trying to engineer a deal. They also feuded last year after Alibaba spun off its payment service, Alipay, but failed to disclose it right away, rattling Yahoo investors. Yahoo said at the time the change was necessary because Beijing would only license an electronic payment service wholly owned by Chinese citizens. By eventually reducing Alibaba's foreign ownership to a minority level, that could help the company if it plans to expand further into e-payments, Biggs said. Biggs said Ma may be thinking that "I've got the businesses, the consumers, I've got the brands. All I need now is to grow my payment mechanisms." After the $7.1 billion transaction is completed, Yahoo and Japan's Softbank, which owns about 30 percent of Alibaba, will hold about 50 percent of Alibaba. But the two companies have agreed to cap their collective shareholder voting rights at less than 50 percent, according to the Alizila blog post. That means Ma will be in the driving seat for any company decisions. Yahoo and Alibaba also agreed to modify their technology and intellectual property licensing agreements. Under the changes, Yahoo will grant Alibaba a license to continue using the Yahoo China brand for up to four years. Alibaba will pay Yahoo $550 million and make royalty payments over that period. Yahoo will no longer be restricted from making other investments in China. Alibaba is in the process of taking Hong Kong-listed unit Alibaba.com private. Shareholders will vote Friday on whether the company should buy back the 27 percent it doesn't already own. ___ Online: Alibaba Group:
http://www.alibaba.com/
[Associated
Press;
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