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Alibaba Wants Subsidiary Private but All Businesses Open to Consumer Interests

Facebook recently opened itself to the public while the Alibaba Group (featured in New York Times) may have plans to put itself back in private holding.  The Chinese company has long been shouting at Yahoo (its American partner) regarding buying back the former’s shares (Yahoo owns 40% stock in Alibaba).  Those discussions grew sour on Monday.

Alibaba would like also like to use funds to purchase subsidiary, (for estimated costs of $8.7 billion). went public in 2007 but financial struggles began last year after an internal scandal. shares have fallen (eclipsing 45%, down to 9.25 Hong Kong dollars).

By making its subsidiary private, Alibaba would be able to focus on its business-to-business marketplace sans the scrutiny of investors and financial demands.  There is no offered reason for why talks spoiled (of yet) on Monday, but the IRS allowance of a tax-free conversion may have something to do with it.

The notion of dealing with the pressures of a public company is a timely concept as Mark Zuckerberg’s Facebook recently became socially invested.  The social media brand has already made (money-making?) motions, recently revising the way it verifies celebrity names.

A Tech Crunch post relates how making celebrities more ‘noticeable,’ will catapult the number of subscribers.  Facebook also made subscriber modifications recently, allowing for one-way (Twitter-like) following; fans can secure news updates via celebrities and popular figures without the latter group having to ‘befriend’ their fans.  While it makes it easier for fans to follow the ‘real’ version of celebrities, it also could be a way for Facebook to influence how people “follow” favorite personalities online.

Whether Facebook’s new move is customer or dollar-centric remains to be seen, but the reaction (or lack thereof) of consumers is an undeniable factor in today’s business world.  The Netflix brand recently reintroduced its old $7.99 plan, which it formerly disbanded to pursue digital streaming opportunities (and the pursuit of higher fees).  As history has it, consumers did not respond well to the change and the company’s numbers suffered, but have been recovering lately and may enjoy an added boost from the new-old offering.

As major brands move forward into a constantly-evolving business world, a delicate dance of producing numbers to satisfy internal (and sometimes public) interests as well as products and services warranting the coveted attention of consumers.  Alibaba hopes making its subsidiary private will allow a shift in focus from numbers production to the improvement of customer experience.

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Todd Bailey Owner at PUSHSTAR DIGITAL

Todd Bailey has over 20 years of digital marketing strategy development & execution. He is the owner of the PUSHSTAR ...

Alibaba Wants Subsidiary Private but All Businesses Open to Consumer Interests

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