Netizen: Alibaba

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Friday, September 13, 2019

Softbank's Problem: Vision, Not Money

Venture investors still aren't sure what to make of SoftBank's $100 billion Vision Fund. Depending on who you ask, they're either rooting for it, or gleeful that it's struggling with WeWork and Uber. https://t.co/6he6pTkBej
— Matt Turner (@_bmturner_) September 13, 2019

100 billion dollars is a lot of money, but it is not too much money for all the innovation that needs to happen, that will happen, with or without the Softbank Vision Fund. So where did the Vision Fund go wrong?

Masa by now has the wrong vantage point.

A tech startup can fail every step of the way. It can fail post-IPO.

But veterans (and give him credit, he has a Steve Jobs-like aura ... he has a stellar record) like Masa learn to become cautious and careless at the same time. Cases in point: Uber and WeWork.

It is hard to spot Uber and WeWork in their early rounds. But by the time they become unicorns, you think, okay, I missed out when it grew from one million to one billion in market value, but now I got it. If I can hop on now, I will still likely see a 100X growth to my investment, when 10X is considered excellent.

But then things go topsyturvy. Elon Musk wants to eat Uber alive. WeWork starts crumbling down right before your eyes post-IPO.

Both are sound companies. Both shifted the paradigm.

Masa picked Alibaba when Alibaba was really young. He has to go to those roots. Maybe it is hard to do. But there are enough early stage companies in the world today that will easily absorb 100B, or whatever is left of it after Uber and WeWork, two dud investments of Masa.

Softbank's Problem: Vision, Not Money https://t.co/gOleWxeAzw @SoftBank @SoftBank_Group @SBREurope @SB_Robotics @Uber @WeWork
— Paramendra Kumar Bhagat (@paramendra) September 13, 2019

Monday, March 09, 2015

Indian Alibabas On The Way

Sunday, December 21, 2014

Betting On Jack Ma: Jerry Yang's Master Stroke

Jack Ma, Founder of Alibaba Group (Photo credit: Wikipedia)

Entrepreneurs can be great investors. They are out there making moves. Some times they spot opportunities that they themselves can not execute on. There is a reason VCs listen to entrepreneurs they respect when it comes to investment decisions, like whne Peter Thiel listened to Sean Parker and invested 500K in Facebook very early on.

Finding Alibaba: How Jerry Yang Made The Most Lucrative Bet In Silicon Valley History

Yahoo’s board agreed to sell 523 million Alibaba shares, half of its stake, back to Alibaba at $13 apiece. Yang hadn’t been so keen to sell. They did anyway. By then he’d quit the board. Sure enough, Alibaba’s IPO last month rocked global markets. Shares of the Chinese e-commerce giant are now worth around $90. Yahoo still has a 16% stake worth $36 billion, but it left almost as much money on the table–some $35.5 billion–as its entire current market capitalization. ....... When the official history of Silicon Valley is (re)written, it will be hard to judge which of Yang’s achievements is bigger: starting Yahoo or betting early on Jack Ma, chairman and CEO of Alibaba. ....... Nine years ago, before Yang was CEO of Yahoo, he spent $1 billion of Yahoo’s money for 30% of Ma’s company. He knew the asset would be hugely valuable someday and refused to sell Yahoo to Microsoft when Steve Ballmer came calling in 2008, a decision that cost him his CEO job. Yahoo’s current CEO, Marissa Mayer, can do whatever she wants to put a better face on things, but Wall Street has marked her business down to zero. It’s now a proxy for Alibaba, and that was all Yang’s doing. ...... guess who’s getting a seat on Alibaba’s board post-IPO: nobody affiliated with Yahoo except Yang. His clear-eyed and early confidence in Alibaba has brought a whole new appreciation to his role as Silicon Valley’s new East-West power broker..... Yang has deep ties in Asian tech circles and will be there to point Jack Ma and the others in the right direction. ..... Earlier this year Tango, a messaging-app firm in Mountain View, Calif., took on $215 million from Alibaba at a $1 billion valuation, a deal that Yang helped along through his connections to Jack Ma’s deputy. ..... His new role of superangel offers a chance to shed his reputation as a bounced-out business mogul. Under his watch Yahoo steadily lost search and advertising share to Google. It also let Facebook slip through its fingers in 2006 by dithering over a $1 billion price tag. .... “I wanted to get back to being close to entrepreneurs,” says Yang, sipping Taiwanese green tea and ignoring his smartphone for an hour straight. ..... Yahoo’s fortuitous connection with Alibaba would never have happened if a Japanese telecom billionaire named Masayoshi Son hadn’t made a detour to Mountain View in 1995 to sit down with the young Yang and Filo. ..... The next day Son went to Mountain View and had take-out pizza and sodas with the young Yahoo founders. SoftBank invested $2 million for a 5% stake in Yahoo, putting in another $105 million in 1996 and then another $250 million in 1998 to take as much as 37% of the company at one point. ...... While Yahoo Japan began gaining millions of customers, Yang took his first trip to China in 1997. A junior staffer in the economic ministry was assigned to take Yang on a tour of the Great Wall of China. His name was Jack Ma, a former English teacher who had tried and failed to start a Chinese version of the Yellow Pages. ..... “Jack was one of the first people I ever met [in China],” Yang says. ........ Along the hike the two hit it off and talked about the growth of the Web. “He was very curious about what it’s like on the Internet and what the future might be.” Several months later Ma began building another startup based on grand and rather vague plans to connect Chinese companies with the rest of the world. He called it Alibaba. ...... BY THE SPRING OF 1999, the height of the dot-com bubble, Yahoo had bloomed into one of the most popular websites on Earth, and Son was briefly almost as rich as Bill Gates. Ma’s Alibaba outfit was piddling by comparison, just a handful of people working out of his apartment in Hangzhou. ........ But Son found him during his periodic hunts for new investments. After visiting Ma for the first time, Son recalled that he liked “the look in [Ma's] eye” and his “animal smell. It was the same when we invested in Yahoo, when they were still only five or six people.” Son put $20 million into Alibaba, before eventually amassing a 37% stake in the company, even as the dot-com crash wiped 99% off of SoftBank’s market cap and close to 90% of his net worth. ............ The star attraction at the event: Robin Li, CEO of search giant Baidu. Though Ma’s startup had swelled to 2,400 employees and $50 million in sales, Alibaba’s future looked uncertain. EBay had bought Ma’s auction-site rival EachNet two years prior and was dominating the market. Ma needed funding and hoped to get it from talking to Li, according to people who attended the summit. ........ Ma stood on the sidelines while bankers, keen to underwrite Baidu’s IPO, scrambled to tee off with Li. As a nongolfer Ma even found himself the subject of a teasing, $100 bet by other delegates: Which newbie could drive the golf ball the farthest–the slight Ma or the brawnier founder of SoftBank-backed UTStarcom, Ying Wu? ....... At the cocktail reception later that day Yang started talking to Ma, his old tour guide from eight years before. ...... Soon they slipped out through the patio doors ahead of a steak-and-seafood dinner and headed for the beach, a five-minute walk away. Within 30 minutes they had talked–mostly in Mandarin–about a partnership that would change the fortunes of both their companies. ....... Ma later told venture capitalist Deng that he had never expected to negotiate with Jerry at Pebble Beach. “Somehow they just chatted and then found out it was a good idea,” Deng remembers. “They made the decision quickly.” ...... “The Chinese ecosystem was not really Jerry’s natural habitat,” says Carmen Chang, a lawyer who helped lead Google’s 2005 investment in Baidu. “It meant he had to work harder.” ....... The deal was exceedingly complex, and both Yahoo and Ma almost walked away a few times. At a CEO conference last March, Ma recalled that Yang eventually sat him down for dinner at a small Japanese restaurant and convinced him over a glass of sake. ........ THE ALIBABA DEAL ALWAYS looked a bit risky. Even Yang had to be talked into doing it initially. Half of Alibaba’s value was attributed to Alipay, an online payment service, and Taobao, the e-commerce site that was up against eBay’s EachNet. Both were losing money. But Yang says he was captivated by the founder. ... “Once you meet an entrepreneur like Jack Ma, you just want to make sure you bet on him,” he says. “It’s not a hard decision.” .......... EachNet, the rival that looked like it might kill Alibaba, was doing just as badly as the brawny golfer who’d hacked at the ball at Pebble Beach. EBay’s management insisted on controlling the Chinese firm from San Jose, demanding a 3% charge for listings and a standardization based on eBay’s technology, slowing the site down. Ma watched and learned. ...... With its $1 billion investment from Yahoo, Alibaba held off on charging for listings, prompting merchants to flee EachNet for cheaper, faster Taobao. By spring 2007 Taobao had taken 82% of the online auction market, leaving EachNet with just 7%. ...... Activist investor Dan Loeb won a proxy skirmish and grabbed three board seats. He called for Yang’s head and got it in January 2012, when Yang finally stepped down from the boards of Yahoo, Yahoo Japan and Alibaba. ..... Yahoo sold half its stake in September 2012 for $7.1 billion before tax, or $13 a share. (Alibaba would close at $94 exactly two years later.) ..... “In some ways the Americans got played,” says hedge funder and Yahoo investor Eric Jackson. “Yahoo panicked while Masayoshi Son kept his head down. If Jerry had been around, he would have had the long-term view as well.” ....... Yang brokered one of the first successful Asian investments in the messaging sector earlier this year when he introduced Alibaba to one of his investments, Tango, which has more than 200 million registered users. While Alibaba had its own Chinese messaging service, Laiwang, it wanted a presence outside the country and in March invested $215 million, valuing Tango at $1 billion.

Tuesday, May 06, 2014

The Alibaba IPO

AliBaba (Photo credit: Stewf)

I never doubted Marissa Mayer's fundamentals as a tech executive, I think she is a trailblazer, but cynics claim 100% of her "success" at Yahoo can be attributed to Yahoo's stake in the Chinese tech giant Alibaba. Alibaba sells actual things. This is a signal that investors in America and other developed markets need to eye other emerging markets. There is an Alibaba waiting to happen in India, in Nigeria, in Brazil. And just like one Craig's List has fragmented into dozens of new, massive companies, and one inbox has fragmented into dozens of massive companies, Facebook among them (since you shared pictures over email before Facebook came along), I think Alibaba itself is a signal the Chinese ecommerce market can be broken up into smaller, more well-defined pieces. Alibaba's number one thing is ecommerce. There is a lesson. That you need a local approach to ecommerce in unique markets like China, and homegrown companies are best served. Other than founding Yahoo, investing early in Alibaba might be Jerry Yang's major masterstroke in life.

The Chinese are coming!

Alibaba Files to Go Public in US IPO of E-Commerce Giant

Founded by former English teacher Jack Ma, 49, in a Hangzhou apartment, Alibaba started with a few dozen items for sale. Alibaba’s market value is estimated at $168 billion, bigger than 95 percent of the Standard & Poor’s 500 Index -- and the most valuable Internet company after Google Inc....... Alibaba now provides various marketplaces for buyers and sellers, as well as services that help them conduct their businesses. Taobao Marketplace, founded in 2003, enables millions of individuals and small businesses to sell products. Tmall.com operates as a virtual shopping mall, with retailers and brands offering products. Alibaba’s other businesses include Juhuasuan, a flash-sales model, and eTao, a shopping search engine.

Alibaba’s Massive U.S. IPO Could Top Facebook’s Debut

Last year, the Chinese e-commerce business that is part-owned by Yahoo handled $248 billion in transactions, more than Amazon and eBay combined. ..... If successful, Alibaba’s IPO could eventually value the company at substantially more than $150 billion ...... a windfall for Yahoo, which owns 24% of the e-commerce giant...... dominates the Chinese e-commerce market, powering four-fifths of all online commerce in that country ..... the company also operates a digital payments service and a cloud computing business..... Alibaba accounts for about 75% of Yahoo’s valuation ...... At $200 billion, Alibaba would be worth more than U.S. tech titans Facebook and Amazon, but it would still trail Apple and Google, the world’s two most valuable technology companies. ..... Last year, Alibaba handled $248 billion in online transactions ... more than Amazon and eBay combined. ....... Alibaba’s meteoric growth has been powered by economic and demographic trends in China, including the ongoing emergence of a large, tech-savvy middle class. In its IPO filing, Alibaba cited China’s population of 1.35 billion people, including 618 million Internet users. The company said there are 500 million mobile Internet users and 302 million Internet shoppers in China. ..... There is less of a retail culture in China, ie. ‘Let’s go shopping on Sunday,’ ..... “The bottom line is that Yahoo’s stock continues to be driven by Alibaba results”

Yahoo’s Alibaba Stake Is Valued at $26 Billion

its stakes in Alibaba and Yahoo Japan, another Asian asset where it has a stake estimated at $9 billion..... Together, those holdings are worth about $35 billion, just under Yahoo’s current market capitalization of $36.7 billion. ...... Yahoo paid $1 billion for a 40% stake in Alibaba in 2005 and in 2012 Alibaba agreed to repurchased more than $7 billion in shares. Yahoo now owns 22.6%, according to Alibaba, and is required to sell 208 million shares in the IPO, worth $10.4 billion based on the most recent fair value. ..... Alibaba paid Yahoo $561 million in 2012 to license its intellectual property

With Alibaba IPO filing, pressure mounts on Yahoo

Marissa Mayer has dramatically changed the story line at Yahoo during her nearly two years as CEO ..... But even as Mayer has moved Yahoo away from under the cloud of worry which dogged it for so long, she'll soon be under growing pressure to prove that the company's turnaround is for real and not simply the result of a brilliant investment decision almost a decade ago. ...... In 2005, Yahoo co-founder Jerry Yang led the company through an investment in the little-known Alibaba, ponying up $1 billion for a 40 percent stake in the company. Today, Alibaba is valued anywhere from $150-$250 billion. Yahoo currently owns a 22.6 percent stake in the company. After Alibaba's IPO, Yahoo could end up with $12 billion in cash on its balance sheet ........ the challenge Yahoo faces as it seeks to compete in all these areas is that the incumbents are some of the fiercest names in technology: Google, Apple, Amazon, Netflix, and others. And without the security blanket of leaning on Alibaba's might during earnings reports, the pressure is on for Mayer to find something else to fill the void.

Alibaba's $1 billion IPO: The numbers to know

Known in the U.S. primarily for its association with Yahoo, Alibaba is an eBay-meets-Amazon and then some kind of business....... Most of Alibaba's revenue derives from online marketing and ads. Other revenue streams include membership and transaction fees, value-added services, and cloud services.

Meet Alibaba’s Jack Ma
Chinese Giant Alibaba Files for IPO, Perhaps the Largest in U.S. History
How Alibaba could change American business
Alibaba Sees SoftBank’s Masayoshi Son Staying on Board Post-IPO
10 Surprising Things You Can Buy Using Alibaba

Saturday, March 23, 2013

Alibaba And Amazon

alibaba (Photo credit: Anna Kipervaser)

We are not used to thinking of Alibaba in the same vein as Amazon, but looks like we should.

Alibaba: The world’s greatest bazaar

Thursday, September 20, 2012

Was Mayer's Hand Forced?

If it was, she is saddled with a Board that does not wish to win - (yes, that's possible). If she wasn't, I don't think she is the next Steve Jobs. Giving billions away to shareholders is too big a mistake at this juncture of Yahoo's history. I guess Yahoo will stay in the middle leagues.

I am not writing her off. I am not writing Yahoo off. I think she deserves something like three years before judgment should be passed. What I am saying is this was a bad move. The cash should not have been returned.

Marissa Mayer Was Not Forced By Yahoo's Board To Return Cash To Shareholders

Mayer wanted to use the cash to buy and make cool products and, thus, make Yahoo a Silicon Valley powerhouse again ..... some tech observers concluded that Marissa Mayer is little more than a popular puppet and that the board is really running the company ..... the decision to return ~$3 billion of cash to shareholders was Mayer's decision, albeit one that was supported and desired by the board..... Later, after conducting the necessary analysis, Mayer decided that returning ~$3 billion of the proceeds to shareholders did, actually, make sense, so she proposed that plan to the board. And the board accepted it...... Even after the cash is returned, Yahoo will have more than $3 billion of cash. It will also likely generate some more cash from the sale of the rest of the Alibaba stake and the sale of its stake in Yahoo Japan. And it's still generating more than $1 billion of cash a year.

It Looks Like Yahoo's Board Kind Of Screwed Over Marissa Mayer This Week

Can Marissa Mayer pull off a Steve Jobs, who began turning Apple around by launching the bondi Blue iMac, and really made things work with the miraculous iPod? .... Mayer, the board believes, is the next Steve Jobs. ..... Yahoo's iPod, by the way, won't likely be a hardware product--it will be software. And it will probably be a bunch of products, all designed to make Yahoo and better content and advertising platform ...... a gadget that disintermediates the smartphone the way Google Glass might. It could buy several startups that make popular mobile applications that have growing engagement with normal, non-techy Americans ...... This particular act of largesse happens to very much benefit one of Yahoo's biggest shareholders, hedge fund manager Dan Loeb, who, incidentally, was instrumental in bringing in Marissa Mayer as CEO....... Loeb happens to also be a Yahoo board member. In fact, by the accounts of several insiders, Loeb is doing the job that a board chairman does, even if that title actually belongs to another board member, Fred Amoroso...... will still leave Mayer with more than $3 billion to work with ..... a lot of cash for a ~$5 billion business ..... still seems odd that Loeb would make the short term cash grab and restrict Yahoo's flexibility. And Mayer might be feeling a little screwed over because of it. It also makes you wonder who is really in charge at Yahoo...... there is a way for her to add about another $2 billion to $3 billion to her cash pile by selling off Yahoo Japan and the rest of the Alibaba stake

Yahoo! Closes $7.6B Alibaba Deal as Marissa Mayer Gets Down to Business

Yahoo! has struggled to come up with a coherent business strategy ..... there are signs of renewed vigor at the company, as Mayer lays the foundation for the “Marissa era.” ..... for the first time in years, Yahoo!’s fortunes seem to be on the rise ...... An accomplished engineer with a sharp eye for design, Mayer joined Google in 1999 after earning undergraduate and graduate degrees at Stanford University, where she specialized in artificial intelligence. At Google, Mayer built a reputation as a brilliant and intense executive with a passion for the “the user experience.” She played a major role in developing Google’s iconic search box layout, and would eventually become responsible for many of Google’s most successful products, including Gmail, Google News, and Google Maps...... a weekly all-hands meeting on Fridays — a classic Google practice ..... Mayer’s real challenge will be outlining a vision and strategy for the company’s turn-around, not to mention actually executing on that strategy. ...... we are still waiting for the new CEO and her team to layout a strategy to revitalize the company

With billions of dollars from the Alibaba deal, what should Yahoo CEO Marissa Mayer do next?

By no means has she righted the ship, but she has, for the moment, encouraged critics to hit the mute button. ..... Turn Yahoo into a local commerce juggernaut. .... Local commerce remains the Web's great white whale. It is an enormous opportunity. But no company has fully been able to capture it. The best way for Yahoo to do that would be to use the windfall from the Alibaba deal to quickly gobble up three high-profile companies that could become the foundation of a local commerce strategy: Groupon, Yelp and Foursquare. ..... buy Mayer more time to clarify where she wants to take Yahoo. ..... Rather than chasing something like search or social that is owned by someone else (Google and Facebook), local commerce remains wide open. ..... Groupon's current market value is $3.07 billion. Yelp is currently worth $1.47 billion. Foursquare, which is still private, is reportedly valued at $600 million. That's more than $4 billion, plus the likely need to pay a premium over these prices.