Yahoo Inc. (NDAQ:YHOO) has taken a lot of heat from shareholders lately, but it got a break today with the stellar performance of Alibaba.com in which it owns a 40 percent stake. The recent initial offering of Alibaba.com has propelled Yahoo's stake to a valuate of $7.8 billion - or about 20 percent of Yahoo's current market capitalization! Shareholders are banking on growth in these foreign markets to drive Yahoo's earnings in the future.

Yahoo shares are sharply off of their recent 52-week highs, however, as many believe the good news is already priced into the stock. Many are also concerned that the stake may really not be worth that much to Yahoo shareholders since it cannot be easily sold at market value. More, the Chinese stock markets appear to be overextended and will likely face a retracement over the coming years.

Yahoo has faced a lot of criticism from shareholders lately. Many are concerned about their struggle to keep ahead of Google along with their failure to land a stake in Facebook. Many more are outraged that the company turned over information to the Chinese authorities that led to the arrest of a journalist - an event that the company must now explain in front of a congressional committee. Meanwhile, the stock has remained somewhat stagnant before these developments.

Yahoo is banking on its involvement in foreign markets to boost its share price in the future. The company has a significant presence in China now with Alibaba.com and may have plans to expand with other acquisitions. Since the Chinese web marketplace is not as established as in the United States, these companies can be acquired on the cheap. Yahoo also has stakes in other countries like Japan where it owns an auction site that ousted eBay.

Whether or not this new strategy pays off remains to be seen, but many believe the move overseas is a good one because the anticipated growth rates - especially in China - are far greater than those domestically. Combined, these factors make YHOO a stock worth watching!

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