Alibaba transferred Alipay ownership without Yahoo approval

Yahoo continues to show signs of having a tense relationship with e-commerce giant Alibaba

Yahoo said that Chinese e-commerce giant Alibaba Group transferred ownership of its online payment service Alipay without its knowledge or approval, a sign of continuing tension between the two companies.

Yahoo owns 43 percent of Alibaba Group as a result of a $1 billion deal made in 2005. But the value of that investment could be eroded now that a key part of Alibaba Group's business has been moved out of the company.

In the regulatory filing made earlier this week, Yahoo revealed that control over Alibaba Group's online payment service Alipay had been completely transferred to a Chinese company owned by Alibaba's CEO Jack Ma. The restructuring was needed so that Alipay could obtain a license from authorities in China, which is requiring third-party online payment services of nonfinancial institutions to be domestically owned.

But on Thursday, Yahoo released a statement saying the company, along with Japan's Softbank, another major Alibaba shareholder, only learned of the restructuring at the end of March, months after the transfer began in August of last year. Yahoo said the decision was also made without approval from Alibaba Group's board of directors, which the company and Softbank both sit on.

Alibaba Group Vice President John Spelich, though, said that Alibaba Group's board had discussed the new requirements on China's online payment industry at numerous board meetings in the past three years.

Yahoo said in a statement it continues to work closely with Alibaba and Softbank "to protect the economic value for all interested parties." The companies are currently holding discussions involving the terms of the restructuring.

The transfer of Alipay highlights the ongoing disconnect between Yahoo and Alibaba Group. Both parties originally had high hopes with the investment in Alibaba back in 2005, that transferred all of Yahoo's Chinese properties to the e-commerce giant. But the relationship has since deteriorated because of clashes over business issues, with Alibaba now believing it has nothing to gain from the deal.

Alibaba even went as far as to hold negotiations last year with Yahoo to get it to sell off its stake in the company. But those talks failed.

"The relationship soured long ago," said Mark Natkin, managing director of Beijing-based Marbridge Consulting. He added that there was no apparent reason for Alibaba to neglect notifying Yahoo about the transfer earlier. "It's not a sensitive matter, and as such, one would expect that Alibaba would notify its shareholders," he said.

The fallout from this move could leave investors with the perception that China is "too unpredictable of a market, and too difficult to navigate," he added.

"Right now we are hearing that Yahoo, Softbank and Alibaba are in discussion about how the two foreign partners can be compensated," Natkin said. "But again, it's coming after the fact in negotiations where the foreign partners don't seem to have much leverage."

Alibaba's Alipay currently ranks as China's largest Internet payment service, with a 51 percent market share, according to Beijing-based research firm Analysys International. Alipay's dominance is fueled in part by Alibaba's e-commerce sites like, China's largest online retailer.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesYahooMergers / acquisitionse-commerceAlibaba.cominternetSoftbank

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Michael Kan

IDG News Service
Show Comments

Cool Tech

D-Link PowerLine AV2 2000 Gigabit Network Kit

Learn more >

D-Link TAIPAN AC3200 Ultra Wi-Fi Modem Router (DSL-4320L)

Learn more >

ASUS ROG Swift PG279Q – Reign beyond virtual world

Learn more >

Crucial® BX200 SATA 2.5” 7mm (with 9.5mm adapter) Internal Solid State Drive

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Gadgets & Things


Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Family Friendly

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

ASUS VivoPC VM62 - Incredibly Powerful, Unbelievably Small

Learn more >

Stocking Stuffer

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Best Deals on Good Gear Guide

Latest News Articles


GGG Evaluation Team

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott


My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.


Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?