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Female Anchor:Leading Internet company Yahoo announced an exclusive partnership with China's largest E-Commerce company Alibaba.com. As part of that deal, Yahoo agreed to purchase Alibaba's shares for one billion dollars in cash, which not only makes Yahoo the largest strategic investor in Alibaba, but also helps its grow, grow its brand in China. So joining us now to give us more details is Terry Semel, Yahoo's Chairman and CEO, he joins us from the company's headquarters in Sunnyvale California. Mr Semel, nice to have you with us.
Terry Semel: Nice to be here.
Female Anchor: Congratulations. This is quite a deal. Tell us what you hope it will do for you and China.
Terry Semel: Uh, we're very very exited about this. It's really a, if you think about the new combined entitiy, which brings together the great success of Alibaba, who are the number one commerce company in China, both in B to B, or business to business, and in C to C, or in auctions. The leaders in both of those segments and you combine that with Yahoo's assets in China which includes search are being for sure the number two player, if you look at the way people rate search queries. So number one a little ahead, Yahoo right behind it and a very strong number two, very strong number two in mail products and communication's products in China. When you bring that together, and you bring together the great managements that Alibaba have, and the great managements running the teams at Yahoo today, we think it's a winning formula. It's a good long-term thinking.
Female Anchor: Well, Speaking of long term, that was what I was gonna ask you. Can you put it in perspective for us really because, when you look at China and the number of people currently that have access to the Internet, it's a relatively small percentage if you put it into the percentages of the population. So what are your ultimate hopes in terms of penetration into what many argue will be the largest Internet population in the world.
Terry Semel: Sure it's the work with the best tools, and being the best businesses, so globally the best businesses would be a combination, or commerce for sure and search for sure. So put in those two assets together in the same place along with communications and great management. You look at China today, it's the fastest growing Internet market in the world. The rates, and as you said before, the amounts of people using it are quite small relevant to the size of the country; Great growth opportunities, and to be the leader in the two most significant areas globally with the kind of growth we will have in China, and it matches what Yahoo does in Asia. If you think about Asia, we are, Yahoo-Japan is the leader in both commerce and search. Yahoo-Taiwan is the leader in commerce and search, Hongkong as well and now China, so if you look at it combined you see, Asia in general fastest growing, a continent in the world for the Internet, and you look at China and say, by far the fastest growing country for the Internet, great opportunity for our new venture.
Female Anchor: So when I talked to other CEOs, and when I've been to China and interviewed them, many of them are putting their strategic plans and place in China, because they feel as though, ultimately, not right away but ultimately, China will be the single biggest contributor to their bottom line as a publicly-held company. Do you see that or is that an exaggeration?
Terry Semel: I think China has the potential to be for sure, one of these, the fastest growing and one of the largest and most influential bottom line countries in the world and so it's a great opportunity for Yahoo to be the largest investor in this new entity with a 40 percent stake. It's just great for us and it gives us the ability to have the best management on the ground. Alibaba had done a fabulous job with their management, and coupled that with Yahoo management. I think we put in place the ability and the assets to be the winner in China, both short term but more importantly long term.
Female Anchor: What about dealing with the government in China? May I assume that's one of the reasons why you partner with a company like Alibaba, and why are people looking at Baidu.com / the same way, because they already have the inroads, they already are dealing with the Chinese government. But do you have any concerns especially given that the somewhat protectionist talk that is going on in the Capitol Hill right now?
Terry Semel: Well, for one thing, I've got, before the deal officially closes, there will be a hopefully very positive decision made by the government. Commerce in general has been an area that the government had been very encouraging to both outside companies and Chinese companies. And if you look at our combination, Alibaba surely a very successful Chinese company with ourselves involved with them. I think collectively we think between commerce and search, the two main vehicles , and communications i.e E-mail, um, to this point of time very much encouraged by the government. Ahh. The leadership of this company will be the Chinese company and their chairman Jack Ma, and they basically are gonna run the company going forwards. So we are very thrilled to be a part of this. And we hope and assume that the government will look at this in a very favourable light.
Female Anchor: So what about the bottom line, ahh, any additions that you hope this would bring to your bottom line result? When will we start to see that, and how significant will be those contributions?
Terry Semel: Well, I think we must take a long-term view, and we definitely do. And I don't think we should expect things to make major contributions the day after you begin. Although in our case both of the, of the companies in a combined way have really terrific assets that we've already started to do quite well. So we look at it at more a long term/ , we have a shared vision with Alibaba management team and I think ultimately this will be a very very significant contributor to the share holders and to the owners of this company.
Female Anchor: Mr. Semel good luck.
Terry Semel: Thank you very much.
Female Anchor: Thank you very much for joining us today. |