Ma says he became friends with Yang in 1998, four years after Yahoo's founding. Yang, who was born in Taiwan and grew up in San Jose, was visiting China to explore his cultural homeland and the country's Internet market, Erisman says.
At the time, Ma's first project -- Hangzhou Hope Networks Consulting, an online directory of Chinese businesses that he founded in 1995 -- had just been shut in a government crackdown on Internet sites.
Ma founded Alibaba in 1999 with US$25 million from venture capitalists, according to Alibaba's Web site. Current shareholders include Fidelity Capital, a unit of Boston-based Fidelity Investments; Granite Global Ventures, based in Menlo Park, California; and Singapore-based Venture TDF Pte and Transpac Capital Ltd, according to the Web site.
"We used to take these great hikes on the Great Wall," Ma says. "From our hikes, we developed a friendship that ended up with us combining forces in forming this new Chinese company."
A photo of the two together on the Great Wall was displayed at the press conference announcing the deal. The final agreement was signed at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Yahoo's law firm, in Palo Alto, California, at 11:20pm local time on Aug. 10, just after the press release was issued, Alibaba Chief Financial Officer Joseph Tsai (
At the same, Ma and Yahoo Chief Operating Officer Daniel Rosensweig were in Beijing announcing the deal. Yahoo expects the transaction to be completed in the fourth quarter of 2005.
Ma will be the chief executive officer of the combined company and sit on the board of directors with Yang, Softbank Corp President Masayoshi Son -- an original Yahoo shareholder -- and Tsai, the companies say. Unlike Yahoo China's Zhou, who ultimately reported to Semel, Ma will be accountable only to the Alibaba board, Rosensweig says.
Ma is the man to take Yahoo forward in China, says Son, whose Tokyo-based Softbank is Japan's No. 2 provider of high-speed Internet access. Son is also chairman of Yahoo! Japan Corp, which is 42 percent owned by Softbank.
"There were many companies that wanted to talk to us when we first started doing business in China," Son says. "Jack Ma was the only one I spoke to, or wanted to speak to, directly."
Softbank is selling part of its 40 percent stake in Taobao to Yahoo for US$360 million, the Japanese company said Aug. 11. It will have a 27 percent stake in the merged company.
"Jack, Jerry and I had been talking about the merger for a while," says Son, adding that he also considers Ma a friend. "Jerry and I would like to leave the operation up to Jack. We trust his skills."
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