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21 May 2012 Last updated at 05:48 GMT BBC
Alibaba will buyback half of Yahoo stake for $7.1bn
<a href="http://s1267.photobucket.com/albums/jj559/365Wildfire/?action=view&current=_52739454_301-1.jpg" target="_blank"><img src="http://i1267.photobucket.com/albums/jj559/365Wildfire/_52739454_301-1.jpg" border="0" alt="Photobucket"></a>
US internet company Yahoo said it has reached a deal to sell part of its stake in China's biggest internet company Alibaba Group.
Alibaba will buy back half the 40% stake owned by Yahoo, following years of negotiations. The deal will raise about $7.1bn (£4.5bn)
for Yahoo, which has been losing ground to rival Google and Facebook in online advertising.
The agreement also allows Alibaba to consider an initial public offering.
Both companies revealed in a statement that Alibaba will pay Yahoo $6.3bn in cash and up to $800m in Alibaba preferred stock.
For Yahoo, the deal gives it the ability to pay dividends, make acquisitions, or buy back its own shares, something its stockholders
have been asking for.
Some analysts have said that most of Yahoo's value is based on its Asian assets, and selling them will allow its core US operations
to be valued by investors.
'New chapter'
The agreement also allows the Chinese group to buy more of Yahoo's remaining 20% stake, if Alibaba pushes ahead with a sale of
its own shares on the stockmarkets, a move that many observers expect.
Alibaba will buyback half of Yahoo stake for $7.1bn
<a href="http://s1267.photobucket.com/albums/jj559/365Wildfire/?action=view&current=_52739454_301-1.jpg" target="_blank"><img src="http://i1267.photobucket.com/albums/jj559/365Wildfire/_52739454_301-1.jpg" border="0" alt="Photobucket"></a>
US internet company Yahoo said it has reached a deal to sell part of its stake in China's biggest internet company Alibaba Group.
Alibaba will buy back half the 40% stake owned by Yahoo, following years of negotiations. The deal will raise about $7.1bn (£4.5bn)
for Yahoo, which has been losing ground to rival Google and Facebook in online advertising.
The agreement also allows Alibaba to consider an initial public offering.
Both companies revealed in a statement that Alibaba will pay Yahoo $6.3bn in cash and up to $800m in Alibaba preferred stock.
For Yahoo, the deal gives it the ability to pay dividends, make acquisitions, or buy back its own shares, something its stockholders
have been asking for.
Some analysts have said that most of Yahoo's value is based on its Asian assets, and selling them will allow its core US operations
to be valued by investors.
'New chapter'
The agreement also allows the Chinese group to buy more of Yahoo's remaining 20% stake, if Alibaba pushes ahead with a sale of
its own shares on the stockmarkets, a move that many observers expect.
