Yahoo to Become Alibaba Alter Ego with Name Change
Investors who can’t get enough of Chinese Internet sensation Alibaba soon will have a new flavor of the e-commerce giant to try: Altaba.
That’s the idea behind the proposed name for a new holding company whose largest asset will be 15% of Alibaba Group Holding Ltd.’s stock at the end of a long process whose conclusion will spell the end of former Internet titan Yahoo Inc.
Yahoo was a pioneer on the Internet, developing one of the most popular online search engines in the medium’s earliest days. But it was overtaken by Google, and repeated efforts to revitalize the company have failed. That resulted in the decision last year to sell the company’s core internet business to leading U.S. wireless carrier Verizon Communications Inc.
When Yahoo was still in its prime, it made headlines in 2005 with a $1 billion investment for 40% of Alibaba, then a relatively little-known Chinese operator of several online marketplaces. Yahoo later sold down that stake as Alibaba grew, but still retains 15% of the company.
That remaining stake, now worth about $35 billion, will become the largest asset of the shell formerly known as Yahoo after the sale of its internet assets to Verizon is complete. The new company’s other major asset will be a 35% stake in Yahoo Japan, now worth about $8 billion, as well as a small patent portfolio.
In a nod to the huge weight of Alibaba stock in the soon-to-be shell, Yahoo proposed renaming the company Altaba after the Verizon sale is complete, according to a U.S. stock filing on Tuesday.
Western media cited unnamed sources as saying the new name was a combination of “alternative” and “Alibaba” since the stock will become an alternative for people who want to invest in Alibaba, and will also provide an alternative valuation for the Chinese company that already has its own separate listing in New York.
Locals had a different interpretation of the new name in Alibaba’s home market in China, saying it resembles “alitaba,” or Mandarin shorthand for “father of Alibaba”. One internet user noted on social media that other related Mandarin names meaning “mother of Alibaba” and “uncle of Alibaba” had already been registered in China.
“So Alibaba becomes Altaba,” wrote Kathywell, a user of Sina Weibo, China’s equivalent of Twitter. “I have a lot of respect for (Alibaba founder) Jack Ma. Just like (Apple Inc. founder) Steve Jobs, they both ushered in development of a new era and made groundbreaking changes for a whole generation of people.”
Contact reporter Yang Ge (email@example.com)
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