NEW YORK (AP) — Yahoo Inc., Japan's Softbank Corp. and the Chinese Internet company Alibaba Group have agreed on a compensation plan involving the Web payment service Alipay.
Yahoo, which holds a 43 percent stake in Alibaba, shocked investors in May when it told them that Alibaba had spun off Alipay nearly six weeks earlier, without giving the Internet pioneer anything in return. Alipay was spun off into a company controlled Alibaba's CEO, Jack Ma.
Under the agreement, Yahoo Inc., Softbank Corp. and Alibaba said that Alibaba — and thereby its shareholders — will continue to participate in Alipay's future financial performance. If Alipay goes public or is otherwise liquidated, Alibaba will get at least $2 billion and up to $6 billion. In addition to Yahoo, Softbank and Ma also hold stakes in Alibaba.
The deal also preserves the value of another Alibaba asset, the online auction site Taobao. The companies said Alipay will continue to provide payment processing services to Alibaba and its subsidiaries, including Taobao, on preferential terms.
Alipay says it is China's biggest third-party online payment platform.
In addition, Alibaba will license some of Alipay's technology and provide software technology services to Alipay, the companies said. Alipay will also pay a royalty fee to Alibaba before it goes public or is otherwise liquidated.
"This is a good outcome for Yahoo and for our shareholders, as well as all the parties to this agreement," Yahoo CEO Carol Bartz said in a statement.
Shares of Yahoo, which have taken a beating since the May announcement, climbed 29 cents, or 2.2 percent, to $13.79 in morning trading. The stock is still down nearly 26 percent since the beginning of May.
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