Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
All Measures to Combat Global Warming Are Smoke and Mirrors! - 18th Apr 24
Cisco Then vs. Nvidia Now - 18th Apr 24
Is the Biden Administration Trying To Destroy the Dollar? - 18th Apr 24
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Alibaba is Focused, Will Use Money in Emerging Areas

Companies / IPOs Sep 19, 2014 - 01:39 PM GMT

By: Bloomberg

Companies

In an interview with Bloomberg's Emily Chang and Cory Johnson, GGV Capital Managing Partner and person responsible for connecting Jack Ma to Jerry Yang leading to the landmark transaction between Yahoo! and Alibaba, Hans Tung said Alibaba is a 'very focused' company and expects them to focus more on emerging areas such a digital goods as in gaming or in financial services, logistics, search or cross-border commerce. 


On how the partnership came to be between Alibaba and Yahoo!: "It's a great question. GGV become investor in Alibaba back in 2003, and in 2005 played a role in connecting Jack and Jerry. As a matter of fact, I'm on the board of (inaudible), which was a very – has been a very active organization facilitating cross-border activities between US and China. And (inaudible) and GGV had a CEO summit back in 2005 and then that's when Jack and Jerry met up with each other and had a long conversation, heart to heart talks, and decided that it makes sense for the two to team up. And one plus one equals bigger than two in China. And back then the valuation for Alibaba was $5 billion for the entire company. In fact, Jack took a lower offer in order to have control of the company back in 2005. And today we're looking at possibly a $165 billion market cap company. That's amazing growth in the past nine years."

On how Jack Ma and Jerry Yang initially worked together:

"That's another good question. Those two had a personality that had – they have common grounds. They also are complementary to each other. Jack and Jerry both are very strategic, and Jack has the cunningness to think ahead and map ways to get there. And Jerry obviously sees the value of what Jack is doing and as a product manager knows that for a market like China which is very localized, you need to have local stores managing it and coming up with services that tailor to the needs of local consumers. I don't think Jerry gets enough credit for making that deal. In the history of any US company investing in China or doing operations in China, Yahoo's investment in Alibaba has by far been the most successful."

On whether Alibaba is doing business differently than Yahoo! or Google: "I think Yahoo and Google and other companies in the US are quite focused in areas they're in, but in China because it's such a – such a big land grab opportunity, every company seems to want to do everything. So for Jack it's not just going to be enough for ecommerce, but also social networking, also financial services, and also search. And so the ambition of the Chinese internet giants has been more in the cases that I have seen. And their ambition is not going to be limited only to China. I think over the next 10 years globalization will be a huge thing coming out of the Chinese internet giants."

On what he expects Jack Ma to do with the money that they make on this IPO:

"I think Alibaba with that kind of cash on its balance sheet has a plethora of choices. You look at what they've done the last 18 months. It's been quite interesting. Most people will argue that it's not focused. I disagree. I think they have a plan and they realize that Alibaba could be much bigger outside of China than it is inside China. That's hard to imagine, but right now in China Alibaba's primarily known as an ecommerce company with financial services upside. But outside of China, it could be any combination of by doing – by doing search or (inaudible) social networking and a variety of other businesses. You look at the rest of the world. Only US and China have the complete internet ecosystem that has the ability to expand beyond the home boundaries to tackle other opportunities outside of these markets." On whether Alibaba will buy Yahoo!:

"I think Ali will have its choices of things to do and it will be focusing more on emerging areas, whether that's in digital goods as in gaming or whether it's in financial services or logistics or cross-border commerce or even search. I think they have a lot of choices ahead."

On whether Alibaba is a focused company:

"I think they're very strategic. With the cash they have, they can afford to make some mistakes. My experience of being in VC is you – you should worry less about your losses and focus on the – the possible up gains you can get. When I went to China in 2005, Tencent was a $3 billion or $4 billion market cap company. Now it's $180 billion. Baidu was a $4 billion or $5 billion company. Now it's $160 billion, $170 billion. The kind of growth that you’ve seen in China is just the beginning. I think the rest of the world over the next 10 years will present even bigger growth opportunities. So Alibaba can afford to make some mistakes."

"I think for an American investor, it's more comforting to know exactly what a company is going to do. But one thing I learned being in the venture business is that no matter how smart investors are, it really comes down to the management to make things happen. They're the one that can make magic. So it's – you buy stock in Alibaba tomorrow. You're betting on that team, the partnership that they have to be able to continue to innovate over the next 10 years. And I think they are capable of doing that."

bloomberg.com

Copyright © 2014 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Bloomberg Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in