Yahoo has completed a long-awaited US$7.6 billion deal with China’s Alibaba Group (阿里巴巴), generating a windfall that could help ease the pain of Yahoo shareholders who have endured the company’s foibles during the past few years.
After Yahoo distributes most of the proceeds to its shareholders, its recently hired CEO Marissa Mayer will still have an extra US$1.3 billion to finance acquisitions or hire new talent as she tries to revive the company’s revenue growth.
Tuesday’s deal will give Alibaba greater autonomy as it prepares to pursue an initial public offering of stock within the next three years, while rewarding Yahoo for one of the few moves that has gone right for the troubled company in the past few years.
Yahoo paid US$1 billion for a 40 percent stake in Alibaba in 2005 and is now reaping a huge return. Alibaba is paying US$7.1 billion in cash and stock to buy back half of Yahoo’s holdings. Another US$550 million is being paid to Yahoo under a revised technology and patent licensing agreement with Alibaba.
“The completion of this transaction begins a new chapter in our relationship with Yahoo,” Alibaba CEO Jack Ma (馬雲) said in a statement.
After paying taxes, Yahoo estimates it will pocket about US$4.3 billion to supplement the US$1.9 billion in cash the company had as of June 30.
Yahoo, which is based in Sunnyvale, California, plans to spend about US$3 billion of the Alibaba proceeds buying back its own stock in the upcoming months, leaving Mayer with some financial flexibility to pay for other items on her turnaround agenda.
“This yields a substantial return for investors while retaining a meaningful amount of capital within the company to invest in future growth,” Mayer said in a statement.
Yahoo shares added US$0.22, or 1.4 percent, to end Tuesday’s session at US$15.90.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
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