China's Alibaba Group is close to securing the cash needed to buy back Yahoo's 39 percent stake in the company. Executives at Alibaba believe that if Microsoft successfully acquires Yahoo, a change in control would present an opportunity to preserve the "management independence" it has today, thanks to a hands-off Jerry Yang. The news might cool Microsoft's already lukewarm shareholders. If Yahoo is worth $42 billion, it's due in large part to owning a stake in a highly trafficked Chinese portal. China already has more Internet users than the United States. (Photo by pmorgan)

In the Yahoo-Microsoft takeover battle, Yahoo's 40 percent stake in Yahoo Japan is treated as an afterthought: Spare goods to be sold off to boost shareholder returns. But Yahoo Japan, in its home country, is Google, eBay, and Yahoo rolled into one. It's worth $29 billion — more than Yahoo itself was worth before the Microsoft bid. Which raises the question: Why isn't Yahoo Japan the one buying Yahoo? Before you dismiss it, consider the precedents.

Pundits talk about the value of Yahoo's Asian investments — $12 a share and rising, given this morning's runup in the value of Yahoo Japan and Alibaba — as if they were pork-belly commodities. And yet it's hard to imagine Yahoo thriving when divorced from the vast markets of China and Japan. Yahoo owns 31 percent of Yahoo Japan and 40 percent of Alibaba, the operator of Yahoo China. To have a compelling worldwide growth story that matches Google's, Yahoo — under anyone's ownership — will need to win back those properties someday. Of all Yahoo's potential buyers, only Microsoft has the capital to acquire those stakes with comfort, and reunite them with their troubled American parent.

Countless departing Yahoos tell me the company's worthless. I dismissed that as disgruntled ex-employee talk, until I started doing some math. After rallying in October, Yahoo shares are trading near a 52-week low, with its market cap around $32 billion. Not exactly worthless, right? Ah, but that includes the value of Yahoo's investments.

Alibaba.com, the most anticipated IPO since Google, dropped almost 18 percent to HK$32.60 as quick-trading investors captured profits. Yesterday, on the first day of trading, Alibaba.com shot up 300% from HK$13.50 at open to HK$39.50. Perhaps investors who bought at the peak paused to look into Alibaba.com's real business. The Chinese B2B site matches up industrial buyers and sellers — want to buy 50,000 metric tons of Brazilian soybeans? Parent company Alibaba Group runs Yahoo China, which I suspect at least some retail investors thought they were buying. But no — Yahoo China wasn't part of the IPO deal.

Alibaba.com, perhaps the most anticipated IPO since Google, nearly tripled in price to HK$39.50 after opening at HK$13.50. If you weren't able to catch any shares, you may get some vicarious plesure from analyst quotes about the company. Hong Kong investors "trade stocks like they're playing at the baccarat table." "There is a total absence of reason and cause" for the high price of the stock. "It's irrational and foolish." Yahoo, which owns 39 percent of parent company Alibaba Group, bought an additional $100 million in Alibaba.com shares. I'm betting they're happy.

Cisco is launching a $16 billion expansion into China. The networking giant will double its manufacturing in China, increase venture capital in the region and support technology education. For that last part, read "get local governments to subsidize training high schoolers on router configuration." It's also forming an agreement with the Alibaba Group to develop business services for small and medium-size companies in Asia. [AP]

Alibaba.com, the business-to-business unit of the Alibaba Group, raised $1.5 billion with its IPO, breaking a record for Chinese Internet companies. The $1.5 billion also makes the public offering the largest tech IPO since Google raised $1.66 billion in 2004. Alibaba's PE ratio, around 55, is a bit Googly as well. Google's shares price it at 52.9 times earnings. One wonders if investors realize that Alibaba's search business wasn't part of the package. [WSJ]

Chinese business-to-business website Alibaba.com — of whom Yahoo already owns a hefty chunk — has received $100 billion in offers for its $1.5 billion IPO. What are they, Facebook? This is way more interest, of course, than they can accommodate. But there may not in fact be much substance behind the bids. Unlike American stock debuts, where you actually have to front the cash to make an offer, anyone can make a bid on a Hong Kong IPO without having cash-in-hand. Companies will make absurdly high offers in hopes of getting a larger share of the pie. Regardless, this looks likely to be one of the hottest IPOs to hit the market since VMware and Google. [FT]

Alibaba Group, the Chinese e-commerce giant set to launch an initial public offering of a business-to-business unit on November 6, said it now expects to raise $1.49 billion. That makes it the largest tech IPO since Google raised $1.66 billion in 2004. Alibaba founder and former English teacher Jack Ma hasn't missed the connection.

China's Alibaba.com, a business-to-business marketplace, is going public. Yahoo, which already owns a 39 percent stake in the Alibaba Group, will add to its stake in the deal, purchasing 8.2 percent of the $1.33 billion IPO. [WSJ]