Published: 10 Aug 2005

The two companies have announced a definitive agreement, as per which
Yahoo! will contribute its Yahoo! China business to Alibaba.com and the
two companies will work together in an exclusive partnership to grow the
Yahoo! brand in China.

Yahoo! said the agreement it around 40% economic interest with 35%
voting rights, making it the largest strategic investor in Alibaba.com.
The partnership model is the first of its kind for an Internet company
in China.

As per the information available, the deal's structure is similar to the
one for Yahoo Japan Corp., in which Yahoo holds a 33% stake while
Softbank Corp., the Japanese Internet communications groups, holds a
controlling 42%.

The combined entity in China will have a four-person board. Management
of Alibaba.com will hold two seats, with CEO Jack Ma serving as the
board's chairman. Other directors will include Jerry Yang, Yahoo!'s
co-founder and Chief Yahoo!, and a representative from Softbank, said
the company.

"The combination will create one of the largest Internet companies in
China, and the only Internet company in China with a leading position in
the key growth sectors of business-to-business e-commerce, consumer
e-commerce, online payments, communications and search," said the
company.

Terry Semel, chairman and chief executive officer of Yahoo! said that
the combination of Yahoo! and Alibaba is the best approach for Yahoo! to
win in this region. Semel said that together the two companies will
create "one of the largest Internet companies in China".

Jack Ma, chairman and chief executive officer of Alibaba.com said the
with the addition of Yahoo! China to Alibaba.com's business, the company
is expanding its services to offer a leading search offering to China's
Internet users. "In China, Alibaba.com is winning in B2B, winning in
C2C, winning in online payments and now we're going to win in search,"
said Ma. Ma declined to give details Thursday on how Alibaba would use
Yahoo's billion-dollar investment.

Alibaba runs both Chinese- and English-language auction sites serving
foreign companies looking for Chinese wholesale suppliers and individual
Chinese buyers and sellers.

"Business-to-business e-commerce is growing faster than any other
segment in China, and is anticipated to grow at a compound annual growth
rate (CAGR) of 95 percent from 2004 to 2007 (source: National Bureau of
Statistics of China and the State Administration of Industry and
Commerce and IDC). Additionally, the consumer e-commerce segment in
China also has high growth potential, projected to grow at an 83 percent
CAGR from 2004 to 2007 to become a $2.5 billion market (source:
iResearch Inc., China Online Auction Report)," said an official
statement.

The transaction is subject to customary closing conditions and is
expected to be completed in the fourth quarter of 2005. The overall
transaction is valued at more than US$4 billion.

As per the official statement, the combined entity will consist of
Alibaba International, online marketplace for global trade; Alibaba
China, the online small- and medium-sized enterprise (SME) community in
China; AliPay, China's leading online payment service; Taobao, China's
most popular e-commerce website; and, the Yahoo! China properties, which
includes the Yahoo! China portal and its communications and advertising
services, Yahoo! Search Technology, and 3721, a leading keyword search
service. Yahoo! also intends to contribute its interest in 1Pai, one of
the leading consumer commerce offerings in China, into Alibaba.com.