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Health & Fitness

Alibaba and Yahoo

Alibaba is a topic that has been discussed here several times – in terms of international investing, investing, and what it means for you. Another theme that has been discussed on several occasions is the story of Yahoo, and its still relatively new CEO, Marissa Mayer. Mayer, a former Google star, came in during 2012 to take over, upgrade, and turn around the struggling Internet search giant. When Mayer first started as CEO, she instituted several radical changes with regards to working hours, working from home, and fringe benefits such as cell phones and food allowances. In addition to these changes, her hiring and firing of her former Google colleague (a $160 million dollar mistake) generated significant market buzz and chatter, but as long as Yahoo’s stock price kept climbing, the marketplace was willing to forgive and forget.

And the stock price has continued to increase during Mayer’s tenure, to date. As Alibaba’s, IPO approaches, though, the following question comes to mind — how much of Yahoo’s stock increase has been caused due to the 24% stake that Yahoo owns in the Chinese search giant? Many have recently speculated that Yahoo has become a tracking stock for the private Chinese firm.

With Alibaba planning an IPO, as soon as this summer according to some sources, the pressure is sure to mount on Yahoo, and more specifically Mayer, in the months ahead. If investors can now purchase shares of Alibaba itself, Yahoo will have to sustain and grow itself exclusively on its own merits. In the face of declining revenues in the last several financial reporting periods, this will be certainly be an interesting story to watch.

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