Is The Threat Of Barbarians Worth 25 Billion Dollars?

Alibaba is buying YAHOO at $25 billion.

According to recent reports, Alibaba is carrying out in-depth negotiations with YAHOO group on bidding for all its businesses and Blackstone and Bain Capital. The Blackstone Group and Bain Capital agree to join the Alibaba group and Softbank of Japan, and take the lead in bidding for YAHOO's full stake.

The first two want to buy.

Informed sources told our reporter that Alibaba has made financing for acquisitions.

As of December 1st, YAHOO's stock price was $15.71, and its market value was $20 billion 500 million.

It is reported that the valuation of Alibaba's acquisition is more than $20 per share, and the valuation of YAHOO is more than US $25 billion.

In December 1st, Alibaba group responsible person received a telephone call from reporters.

"The purpose of Alibaba's acquisition is to repurchase 40% of the Alibaba owned by YAHOO. After the completion of the acquisition, Alibaba may sell YAHOO US assets and YAHOO Japanese assets as soon as possible, so as to perfect the ransom."

Xie Wen, former president of YAHOO China, commented to our reporter on 1 December.

Xie Wen believes that the risk of ransom is: "in order to eat fried eggs, bought a chicken farm."

He explained that after the completion of the acquisition, if it can not be sold in a timely manner, the depreciation of YAHOO assets may be in the hands.

"Redemption" path

In the view of Zhou Hongyi, former president of YAHOO China, YAHOO group owns global assets. Alibaba group will be one of the leading Internet giants in the world: integrating Taobao, Alibaba, Alipay resources and Ali cloud resources with Facebook and Google.

At the same time, it can repel the barbarians who linger around the gate of YAHOO.

Partner of Shanghai Da Bang law firm Yu Yun Ting believes that the barbarians who linger around the YAHOO gate may be Microsoft, or even Google, and those institutional investors.

He said that to win YAHOO's US assets, it will face many difficulties. First, YAHOO is the largest portals and the second largest search service provider in the United States. It is related to content and may be faced with audit from the US regulatory agencies. Two, Alibaba has made too many enemies, especially those "barbarians", who are salivating YAHOO's consortia.

These two problems may lead to abortion.

Ma Yun's new takeover plan is to pull American Blackstone Group and Bain Capital and other institutions.

In this regard, Xie Wen believes that after the completion of the acquisition, Alibaba may sell YAHOO America to the US Blackstone Group and Bain Capital in a short time, and sell YAHOO YAHOO assets to Softbank Sun Zhengyi.

This is a plan of "taking what we need". The United States, YAHOO, YAHOO, Japan and YAHOO are completely separated from China and no longer have capital implications.

"Abandoning the imagination of global Internet giants and lowering the threshold of redemption is Ma Yun's new choice."

You Yunting said, "this is very wise and easy to operate."

However, Xie Wen believes that the scheme has potential risks, if YAHOO does not sell in a short period of time, and YAHOO's current business is showing a downward trend, which will lead to a decline in YAHOO's share price, and the eventual outcome may be "a successful redemption and a loss of business".

"Buying first and selling later requires complicated financial arrangements. At the same time, Sun Zhengyi's YAHOO Japan and Ma Yun's YAHOO China all use YAHOO's US patented technology, so it's very difficult to make it clear in a short time."

Therefore Xie Wen's judgment is "may hit in the hand."

Yu Yun Ting is optimistic.

In his view, Alibaba should have made all the arrangements before mergers and acquisitions, otherwise it would not be easy to launch.

As for technology patents, brands and other issues can be well resolved, they can be discounted, or YAHOO authorized to use, just as Lenovo acquired IBM's PC business, Thinkpad granted Lenovo forever, and IBM granted Lenovo 5 years of service life.

"YAHOO's many technologies can be replaced, such as Google's technology, Japan's Softbank, Alibaba itself has corresponding research and development capabilities, and develop alternative technologies."

You Yunting thinks.

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The threat of "barbarians"

Ma Yun's idea has been set, who will YAHOO spend in the end? Xie Wen said, "it's hard to say". It depends on bidding, competition is fierce, price is high, otherwise, it may pick up cheap. Bidding is not final acquisition, but it is a spoiler, increasing the cost of Alibaba's acquisition.

In fact, there are quite a lot of confusion.

Investors consortium including Microsoft, Andreessen Horowitz, and private Holdings Company, Yin Hu capital, has submitted a takeover offer, offering a bid of $3 billion to acquire about 13% of YAHOO's shares, and YAHOO's valuation of about $20 billion 600 million.

Microsoft's plan includes appointing the new CEO nominated by him and the new director.

Another private Holdings Company, TPG, offered $17.6.

The list of potential traders will include KKR, Thomas H, News Corp., AT&T, Verizon, Bain Capital and Providence asset company.

There are three categories of spoiler and covetous. One is Microsoft, news group, AT&T, Verizon, and two are silver lake partnership fund, Anderson Horowitz fund and Providence asset company, Bain Capital, Blackstone Group, KKR and other investment institutions, three are from China Alibaba group.

Microsoft is the biggest spoiler.

In 2008, Microsoft offered to buy YAHOO at $33 A share for a total of $47 billion 500 million, which was aborted due to shareholders' boycott.

Subsequently, Microsoft and YAHOO reached a 10 year search agreement, allowing Microsoft's technology to support YAHOO's search results, and Microsoft could be divided into 12% advertising revenue.

In 2009, Lu Qi, YAHOO's search business, joined Microsoft as the president of the online services department.

Therefore, in bidding for YAHOO, Microsoft is not willing to easily get caught.

Yun Yun Ting analysis, the most likely to lead to the failure of Alibaba acquisition of YAHOO is that those who lined up to drive up the stock price, resulting in the paction can not be carried out.

Even Google is likely to join, though there is no news yet.

"Whether Microsoft or YAHOO, the original shareholders may prevent the paction from happening, so long as they think that the interests of shareholders are harmed, they will prevent the paction from happening."

Xie Wen said.

Is it worth 25 billion dollars?

Alibaba's $25 billion acquisition is still worth it?

The fact is that YAHOO's assets have been shrinking over the past few years.

YAHOO is still the world's largest mail service provider, the largest instant messaging service provider, but the importance of mailbox service is declining. The products and services provided by the new Facebook, twitter and other companies are replacing mailboxes, and the importance of instant messaging services is also declining.

YAHOO used to be the second largest search service provider in the world, but its market share in this field is declining.

YAHOO's share of the US internet search market in August was 16%, down from 19% two years ago.

By contrast, Google GOOG0.N's share in the Internet search market has remained steady at 65%, while Microsoft's share rose to 15% from 9% a year ago.

Microsoft is catching up.

YAHOO is still the world's largest gateway, but Zhou Hongyi believes that the portal is outdated and a "middle-aged business", which has no value for investment.

This year, YAHOO's stock price has fallen by 19%, and its market value has fallen to $17 billion.

When Ma Yun issued "interested in acquiring YAHOO" voice, YAHOO shares rose 5% on that day.

YAHOO's biggest assets are Japan's YAHOO and China's Alibaba.

Xie Wen said, to some extent, the US YAHOO is just a capital symbol with a large number of Asian assets, rather than a Internet Co with unlimited imagination. Should it be sold? This is not a suspense.

The capital market is concerned about the way it should be sold to, and in what way.

Meanwhile, YAHOO is being abandoned by Wall Street, or Wall Street is plotting to kill YAHOO.

Silicon Valley veteran, Skanpay CEO Chen neighbor told an interview with our reporter that Wall Street likes to "collude", concentrate funds to fry a company or fry an industry, and they are now hyping the target of Google, Facebook, Linkedin, YAHOO has been abandoned.

In spite of this, in Zhou Hongyi's view, the YAHOO, which is being abandoned, still has at least three aspects of value for the Alibaba.

First, the value of traffic, YAHOO in the global traffic ranking, second only to Google, Facebook, these traffic in addition to advertising value, but also for Alibaba's e-commerce support.

The two is to support Alibaba as a global company. Ma has always wanted to make Alibaba a global enterprise. It is difficult to enter the United States without a local team. YAHOO's team can make up for this shortcoming.

The three is the angle of corporate security. YAHOO is a shareholder of Alibaba 40%. "If YAHOO is taken by an unfriendly company, and the unfriendly company owns 40% of Alibaba, this will make Ma more uncomfortable."