Ex-Yahoo president Sue Decker on investing in Alibaba and learning from doing business in China
An Insider's Account of the Yahoo-Alibaba Deal — Editor's note: When the Chinese e-commerce giant Alibaba goes public, as it will soon, Yahoo will earn many times its significant original stake …
Context & Ripple Effects
Sue Decker's first-person account closes a loop that began in October 2007, when Yahoo bought its 10% of Alibaba's IPO and expanded its role in China, and ran through the May 2012 agreement to sell back half the stake for $7 billion, keeping the rest for the eventual listing.
First-order effects
- With Alibaba's public offering imminent, the retained stake from the 2012 half-sale is about to be marked to market, multiplying the value of what Yahoo kept after returning cash from the first tranche.
- Decker's insider narrative hands Yahoo's board and investors an authoritative accounting of how the position was built, at a moment when CEO Marissa Mayer is under pressure — analysts have floated another activist investor as a possible catalyst.
Second-order effects
- The IPO windfall sharpens the question raised when Mayer was set to receive the Alibaba billions in 2012: whether Yahoo returns capital to shareholders or recycles it into her mobile rebuild, which the company says is growing search and display ad revenue 100% off 450 million monthly users.
- Rival media and commerce players reading the payoff will face renewed pressure to justify their own China exposure or lack of it against Yahoo's single best-performing asset.
Third-order effects
- If the pattern holds, Yahoo's market value increasingly prices it as a holding vehicle around one Asian asset rather than as an operating media business, forcing whatever leadership follows to either monetize that gap or close it.
The trend: Western internet companies' legacy China stakes are converting from strategic bets into financial windfalls whose disposition will define the parent companies more than their core products.