Yahoo, Alibaba agree on Alipay
Yahoo and Alibaba have now agreed that Alibaba would benefit from any future financial gain, such as a public offering. Alibaba will also license some of its intellectual property to Alipay.
Alibaba will receive a minimum of $2 billion and a maximum of $6 billion from the sale of Alipay, under the terms of the agreement.
Xinhuanet says under the new agreement, Alipay will continue to provide payment services to the Alibaba Group and its subsidiaries including Taobao, China's largest online shopping Web site, on preferential terms.
According to Alibaba, the transfer was necessary in order for the company to comply with Chinese law barring foreign ownership of online payment services, reveals Market Watch.
But the ownership change sparked a controversy, and sent Yahoo's shares tumbling because it appeared that the company's management was caught by surprise by the move.
Investors also were spooked by the controversy because a big chunk of Yahoo's value is in its Asian assets, particularly its stake in Alibaba.
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