Yahoo! Inc. (YHOO): Alibaba Buys Everything

Dan Rosensweig, CEO of Chegg, has delivered some of his thoughts on Alibaba’s US investments in a video segment on Bloomberg. The Chinese e-commerce giant, which plans its IPO in September, 2014, has significant stakes in a few high-flying startups, including SnapChat, Tango and Lyft. Some voices suggest that as Alibaba goes public it may even buy Yahoo! Inc. (NASDAQ:YHOO).

The company seems to have a pretty aggressive strategy when it comes to achieving ownership as it has hired a Liberty Media former executive that has the job to find good businesses and buy stakes in them. The ultimate goal of this shopping spree does not seem to be very clear.

Rosensweig has suggested that Alibaba may adopt a “wait and see” approach in order to identify winners, the same way Yahoo! Inc. (NASDAQ:YHOO) did with Alibaba. Or, at some point it may assemble pieces of investments and buy them, as it does at home.

“They’re assembling a collection of pieces through investments that they may put together one day, or at least to understand what is going on in the market so they can learn about it, and ultimately decide how to participate more successfully,” said Rosensweig.

Another interesting point made by Cory Johnson, journalist at Bloomberg, is about the opportunities that may arise for US companies when such a “blessed by Chinese government” company takes a stake in them. He argues that these companies will probably be allowed by Chinese authorities to tap the country’s enormous market, making them automatically more valuable. Other US companies that do not have Chinese investors are kept away, think Apple, Google and Facebook.

Ultimately, Rosensweig thinks that even though Alibaba has the capital to buy Yahoo! Inc. (NASDAQ:YHOO) now, such a transaction is unlikely to occur. Instead, he points that there is Softbank, who may be more interested in acquiring Yahoo! Japan.

According to some estimates the Alibaba may have a valuation of between $55 billion to more than $120 billion.

Disclosure: none