Tag: Alibaba

Alibaba gets its own US cloud

Clouds in Oxford: pic Mike MageeAlibaba is launching a cloud computing hub in Silicon Valley which is the first that the e-commerce giant has set up outside of China.

The new California data centre marks the Chinese company’s latest expansion onto an US market dominated by Amazon, Microsoft and Google.

Alibaba’s Aliyun cloud division intends the new data centre to cater initially to Chinese companies with operations in the United States. Later it will target US businesses seeking a presence in both countries.

Ethan Yu, a vice president at Alibaba who runs the international cloud business said that it was all part of Alibaba’s international expansion plans. The next stage would be a cloud on the East Coast, or somewhere in the middle of the US.

Aliyun is similar to Amazon Web Services and was part of the company’s in-house technical infrastructure. It has since expanded to lease processing and storage space for small and medium Internet businesses in China.

Aliyun, also known as Alibaba Cloud Computing, holds about a 23 percent market share in the Chinese market. It faces both Chinese and foreign competitors, from carriers like China Telecom to Microsoft and Amazon. Its existing data centers span the Chinese cities of Hangzhou, Qingdao, Beijing, Shenzhen and Hong Kong.

Yahoo plans to spin off AliBaba stake

Ali_Baba_and_the_Forty_ThievesYahoo plans to spin off its 15 percent stake in China’s Alibaba as shareholders demand that it hand over to shareholders the cash it has made from its ¬†prized e-commerce investment.

The Alibaba shares are worth valued at roughly $40 billion.

Shares of Yahoo rose about seven percent to $51.45 in after hours trading on Tuesday, following the tax-free spinoff announcement and earnings which just beat analysts forecasts even as its revenues slightly lagged estimates.

Selling the Alibaba stake could pressure on Yahoo Chief Executive Marissa Mayer to make quicker progress in strengthening Yahoo’s struggling media and advertising business.

Shareholders feel that Yahoo and its stake in Alibaba would be worth more separately, as long as the Alibaba shares are not subject to the standard 35 percent tax rate that would be incurred from selling the shares.

Yahoo is worth about $45 billion which includes its Alibaba stake of nearly $40 billion, meaning the current Yahoo share price assigns little value to the core business. Some investors believe the email, website and other operations are worth between $7 billion and $8 billion.

Mayer promised investors that the company’s display advertising revenue, which declined 4 percent in 2014, would return to growth this year. But the company’s forecast for revenue in the first quarter implied continuing problems.

Yahoo said that revenue, excluding fees paid to partner websites in the first quarter, would range from $1.02 billion to $1.06 billion, compared to the $1.09 billion last year.

Yahoo said its board of directors has authorized a plan to spin off the stake, tax-free, into a newly formed independent registered investment company. The stock of the company will be distributed pro-rata to Yahoo shareholders and the transaction is expected to close in the fourth quarter of 2015, Yahoo said.

The new entity will include Yahoo’s 384 million shares in Alibaba as well as an unspecified “legacy, ancillary” Yahoo business, the company said.

Yahoo’s revenue, excluding fees paid to partner websites, declined 1.8 percent year-on-year in the final three months of 2014 to $1.18 billion, just shy of Wall Street expectations.