Quoted: Inside Yahoo's 2005 deal with Alibaba

“Looking back, it’s clear to me that this windfall is the result of talents we didn’t even know we possessed: It turned out we were good at identifying the right partner in China and good at acknowledging our errors early on.”

– Sue Decker, former president of Yahoo, in a blog post for the Harvard Business Review recounting how Yahoo originally hooked up with Chinese e-commerce giant Alibaba in 2005. “We were impressed with (Alibaba founder Jack) Ma’s visionary and principled management philosophy, and we liked how our two companies might fit together,” Decker wrote. The 2005 deal was negotiated by then-CEO Jerry Yang, who put up $1 billion for 40 percent of the Chinese startup. Alibaba has surged as Yahoo has slumped in recent years, making it the Sunnyvale Internet giant’s most important asset. Though Yahoo owns just 24 percent of the company now, it still stands to gain immensely from Alibaba’s upcoming IPO, which is expected to be the biggest ever.

 

At top: Alibaba CEO Jack Ma at a press conference with Yahoo in November 2005. (PETER PARKS/AFP/Getty Images)

Mike Murphy Mike Murphy (355 Posts)

Mike Murphy is a web producer at the Mercury News, and also writes for Good Morning Silicon Valley and 60-Second Business Break.