With the Alibaba Group’s IPO fast approaching, the Street is rife with speculation that Alibaba Group may buy one of its largest shareholder Yahoo! Inc. (NASDAQ:YHOO). As a Forbes article enumerated a few days ago, if Alibaba Group acquires Yahoo! Inc. (NASDAQ:YHOO) even at a premium, it will be a lucrative deal for it, the tax dollars it will save would more than make up for the premium.
So will Alibaba Group acquire Yahoo! Inc. (NASDAQ:YHOO)? Dan Rosensweig, Former Yahoo! Inc. (YHOO)’s CEO thinks so. In the discussion with Jon Erlichman and Cory Johnson he provided his view regarding Alibaba’s investments in U.S. tech companies on Bloomberg.
“Well, it’s complicated to know what to make of it because it’s very different than their strategy actually in China. Their strategy in China is that they start companies, they own them or they buy them, but they don’t necessarily invest in them. So what it looks like to me is, first of all, I think, they have learned that the value of investing in some of these companies, I did it, we did it at Yahoo! Inc. (NASDAQ:YHOO) into Alibaba has made a fortune for Yahoo! Inc. (NASDAQ:YHOO) that there is a way for them to return both by investing in these companies and seeing whether or not they achieve success on their own […],” Rosenweig said.
According to Rosenswieg, with the stakes that the Alibaba Group is buying in U.S. Tech companies, it is trying to figure out a way of how it is going to expand beyond China and Asia. Johnson pointed out that the Chinese Government ‘blessed’ the homegrown companies, while keeping U.S. tech companies at arm’s length. Therefore, he asked if will Alibaba be also ‘blessed’ by the Chinese Government if it acquires a stake in a company outside China.
“Well, it [Alibaba Group] is in a position to buy it [Yahoo! Inc. (NASDAQ:YHOO)] now, well, I have always believed that if there is going to be a transaction, it is more likely to be Softbank than it is to be Alibaba,” Rosensweig added.