Alibaba hires lobbying firm in US as it seeks stake in Yahoo

By Paritosh Bansa and David Ingram Reuters

By Paritosh Bansa and David Ingram Reuters–Alibaba Group has hired a Washington lobbying firm in a sign that the Chinese e-commerce company would be willing to make a bid for all of Yahoo Inc. in the event that talks to unwind their Asian partnership fail. Japan’s Softbank Corp., which owns a 30-percent stake in Alibaba and is a partner in Yahoo Japan, is also listed as an Alibaba affiliate in the disclosure by the lobbying firm, Duberstein Group Inc. Alibaba Group’s founder, Jack Ma, said in September he was keen to buy all of Yahoo if the opportunity presented itself. Hiring a Washington lobbying firm could help Alibaba address any U.S. political opposition to a complete takeover of Yahoo by a company from a country that controls and censors the Internet. Chinese companies, such as telecoms giant Huawei Technologies Co, have run into opposition when they have tried to buy U.S. assets over the years. “The national security concern is sometimes just an excuse for commercial concerns for any country, but certainly for the United States,” said Mark Natkin, managing director of Beijing-based consultancy Marbridge Consulting. “I don’t think there should be a big concern (for Alibaba buying Yahoo). Users may share or keep as much data as they like.” Alibaba, Softbank and Yahoo have been looking to unwind their complex web of relationships. Alibaba retained Duberstein in the fall when it was discussing a proposal with private equity firms to carve up Yahoo, a source familiar with the situation said. While they would jointly make a bid for the whole company, the idea was for the buyout firms to take over Yahoo’s U.S. operations and for Alibaba and Softbank to get the Asian assets. But a buyout of Yahoo has now been put on the backburner as the U.S. Internet company is considering a proposal to address just the Asian assets that Alibaba and Softbank want.

That plan, valued at roughly US$17 billion, would reduce Yahoo’s 40-percent stake in Alibaba and get Yahoo out of Yahoo Japan, sources told Reuters last week.