Alibaba is Yahoo!’s magic-carpet ride.
When Yahoo! released earnings this week, it also opened the books on its 40 percent stake in Alibaba Group, the fast-growing Chinese e-commerce giant run by Jack Ma.
For the first time last quarter, Yahoo!’s Asian assets, which include Yahoo! Japan, surpassed the firm’s core business in operating income: $172 million to $169 million, according to analyst Ken Sena of Evercore Partners.
The Asian investments are keeping Yahoo! afloat and boosting its bottom line, according to analysts who say the overseas assets are more valuable than the rest of the company. The Internet company is in talks to sell a portion of its Alibaba stake.
In comparison, Jordan Rohan, an analyst with Stifel Nicolaus, said the Asian assets made up 60 percent of Yahoo!’s profit last quarter.
“Yahoo! is now receiving a much larger percentage of its total earnings per share from its non-consolidated holdings, mainly due to growth from Alibaba,” he said.
He pegs Alibaba Group’s valuation at $41 billion, up from $35 billion.
Alibaba Group, Asian investments, Jordan Rohan, Yahoo!, Yahoo! Japan
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