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Yahoo Inc, part owner of Alibaba Group, is not expected to immediately name a second board member at China‘s No. 1 e-commerce firm as it is entitled to, a source familiar with the matter said, at a time when the companies’ relations are strained.
Yahoo co-founder Jerry Yang now occupies a sole board seat at Alibaba. The U.S. company bought a stake of about 40 percent in Alibaba in October 2005 and has the right to name a second director on the fifth anniversary of the deal, which falls on Sunday, October 24.
The news comes as Yahoo’s relationship with Alibaba shows signs of strain, with Alibaba having tried unsuccessfully to buy its shares back. Private equity firms including Silver Lake Partners have also explored a buyout of Yahoo that might entail combining it with assets of AOL Inc or News Corp. But sources have said any buyout would be contingent upon Yahoo selling its stake in Alibaba.
“The company is going to take some time to select an appropriate candidate. No decisions have been made,” the source told Reuters on Friday.
With two board members, Yahoo would have the same representation on the five-person board as Alibaba’s management, according to the contract between Yahoo and Alibaba that spells out the board representation. A representative from Japan‘s Softbank occupies the fifth seat, the contract said.
Yahoo declined to comment.
Analysts estimate that Yahoo’s Asian assets, which also include a stake in Yahoo Japan, account for at least half of Yahoo’s roughly $22 billion market value.
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