Alibaba Earns A Voice In Micro-Hoo Deal

Alibaba founder Jack Ma didn't need to rub a magic lamp in order to chime in over talks of a potential Micro-hoo marriage. After all, Yahoo! (nasdaq: YHOO - news - people ) owns 39% of Ma's Chinese eBay, so if Yahoo! gets a new owner, so does its high-performing Sino-subsidiary.

Hangzhou-based Alibaba announced Monday it will have a say at the negotiating table and is reported to have recently hired consultants to help it strategically influence the terms of Yahoo! (nasdaq: YHOO - news - people ) 's potential sale. Alibaba might be used to majority rule in China, but it's making sure that strong connections fortify its minority voice in this possible buy-out.

Alibaba, the number one B2B site in China, has a right to speak up because a majority of its shares will change hands if the deal goes through. It can also get some air-time by leveraging its existing ties, including ones to would-be buyer Microsoft (nasdaq: MSFT - news - people ). Japanese telecommunications company, Softbank, owns 30% of Alibaba and has an existing "strategic partnership" with Microsoft dedicated to business communication services for small businesses. Further up the food chain, Softbank also owns 3.9% of Yahoo!

Not only does Softbank have a stake on paper, its president, Masayoshi Son, has some friends in high places making it that much easier to go over Yahoo!'s helmet. He and Bill Gates, both uber-rich tech billionaires, are reportedly quite friendly. Son and Yahoo! Chief Executive Jerry Yang, also are linked as buds. Yang has one of only four seats on Alibaba's board. Having buddies on both sides of a merger and money vested in two entities on the table puts Son in a sweet spot when it comes to a possible union between the two companies.

Yahoo! closed Friday at $29.66 down 32 cents, or $1.07%. Softbank closed Thursday in Hong Kong at $19.90.

Yahoo! made a good call when it bought into Chinese e-commerce site Alibaba. (See "Open Sesame:Alibaba Boosts Yahoo" ) The English language site connects importers and exporters in China and around the world. Business is booming with over 24 million registered users in 200 countries. (See "Chinese Freed to Shop an Overseas" )
Alibaba was worth an estimated $7.3 billion when it went public in November 2007 and today it's valued at $13 billion dollars. The company's IPO was met with great excitement; shares of Alibaba jumped 192% on the company's first day of trading to $5.06 from $1.73.