In May, one of Yahoo’s Asian assets, Alibaba Group, announced it had sold controlling interest in Alipay to Alibaba Group chairman Jack Ma – without Yahoo’s knowledge.
Right now, Alipay makes most of its money as a payments system for Alibaba Group’s e-commerce site, TaoBao. But it is expanding to other third-party sites, and, until it was sold, was considered a growing part of Alibaba Group portfolio.
The Alipay deal followed months of open conflict between Ma and Yahoo.
The basic terms: Alipay will issue Alibaba Group a $500 million promissary note. Prior to a liquidity event, Alipay will pay Alibaba 49% of its value. Alibaba will receive a $2 billion to $6 billion payment if Alipay IPOs. That’ll be determined by taking equity value of Alipay and multiplying it by 37%.
During the conference call to announce the deal, analysts were openly confrontational with Yahoo executives about the deal.
We caught up with one on IM to ask why he hated it so much.
Here’s that conversation: