China’s Alibaba Group Hires US Lobbying Firm To Help With Yahoo! Bid

Alibaba Group, the Chinese e-commerce giant, has hired a US lobbying firm, causing further talks that it is preparing a bid for Yahoo.

Alibaba provides Internet based services, such as software applications, domain name registration, Website hosting and solutions, email hosting and technology-related consulting services on various marketplaces and platforms. Photo: Aliuser/Flickr

Alibaba Group is a Chinese investment holding company, engaged in the provision of software, technology and other services on the online business-to-business marketplaces. The company, 40pc of which belongs to Yahoo!, enlisted the Duberstein Group last autumn.

The Washington lobbying company is headed by Kenneth Duberstein, who is the former chief of staff during the U.S. President Ronald Reagan administration, and also acts for BP America, Goldman Sachs and pharmeceuticals giant, Pfizer, according to the Telegraph.

The lobbying registration includes the law firm Wachtell, Lipton, Rosen & Katz, which specializes in the sphere of mergers and acquisitions, as an intermediary between Alibaba and the company’s lobbying team.

In September, Alibaba’s head, Jack Ma, revealed his desire to buy Yahoo and after that there have been recent reports linking the firm to such a move.

However, there were rumors that any deal can face political opposition in the US. The Duberstein Group signed a declaration about it being hired by the Alibaba Group with the US Senate on 23 December.

According to U.S. legislation, a lobbying firm is ‘to file a public disclosure within 45 days of crossing certain thresholds such as making contact with a public official’. The filing for Alibaba means it is effective as of December 1.

Messages left with the Duberstein Group and Wachtell were not immediately returned on Wednesday. As Reuters noticed, other Chinese companies, such as, for example, telecoms giant Huawei Technologies Co, have run into opposition when trying to buy U.S. assets over the years.

It is the first time when Alibaba has registered to lobby the US government. However, experts are sure that while national security was cited as a reason to block moves by Huawei, it may not be the same for Alibaba.

They added that finally it is the users’ call whether or not to subscribe to a website’s services and keep on using it.

“The national security concern is sometimes just an excuse for commercial concerns for any country, but certainly for the United States,” said Mark Natkin, managing director of Beijing-based consultancy Marbridge Consulting. “I don’t think there should be a big concern (for Alibaba buying Yahoo). Users may share or keep as much data as they like.

“If they subscribe to Yahoo and (they know) Yahoo is owned by a Chinese company, they are going to have to make the decision themselves,” Natkin added.

Alibaba and Yahoo’s relationship started in 2005, when Yahoo bought a 43% stake in the Chinese firm for $1 billion.

Unfortunately, the relationship between the companies has since taken a turn for a worse and Alibaba has been attempting to buy its stake back, a move which Yahoo resisted.

However, last week there was a wave of rumors that Yahoo’s board was considering reducing its stake in Alibaba.

Meanwhile, Yahoo’s dwindling market share was reflected in reports of various companies, including Alibaba, with a possible takeover bid. Experts said Alibaba’s latest step may only worsen the situation, says BBC.

“It is one more confirmation of the rumors that Alibaba is keen to strike a deal with Yahoo, to reclaim its share that Yahoo owns,” Tim Charlton of Charlton Media Group told reporters. Alibaba is currently unreachable for comment.

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