As previously reported here at SECInvestor, a significant chunk of Yahoo's (NASDAQ: YHOO)value in a sale is its minority stake in Chinese search engine Alibaba. We also noted back in February that:

"Yahoo’s stake in Alibaba, which stands at around 39 percent, paid huge dividends after being acquired for $1.7 billion in August of 2005. Since then, the company has IPO’d and dramatically grew in market value while also continuing to grow its revenues at a break-neck pace. Interestingly, Alibaba is also concerned about the Microsoft acquisition, saying that it has a “reputation of using monopolistic tactics”. Foreign control of large companies is also a politically sensitive issue for Beijing, which has forced many prospective buyers to cut their stakes or sipmly delay the application process indefinitely."

Well, it looks like Alibaba is now going to try to take action as Microsoft Corporation's (NASDAQ: MSFT) purchase of Yahoo looks more likely.
Jack Ma, the English teacher that founded the company, plans on advancing a plan to repurchase the 39% of the company that Yahoo owns. Ma and others in the company are supposedly concerned about Microsoft's heavy handed management style as well as scrutiny from Asian users about a titan of American business owning such a large stake.

The WSJ is reporting that Alibaba has already hired a bank and financial adviser to work on the possible purchase details and financing. Though such a repurchase is anything but certain at this point, Alibaba's concern with the deal certainly makes a Microsoft advance more difficult to complete and much less attractive. This is probably the worst development from Microsoft's point of view since the announcement of its takeover bid, so be sure to watch the story as it develops.

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