In what has been reported in The Daily Deal as the largest acquisition ever in China's Internet market, a cross-office Morrison & Foerster team advised SOFTBANK, one of the world's largest investors in the Internet, in connection with Yahoo!'s $1 billion cash investment in SOFTBANK's China affiliates, Alibaba.com and Tao Bao. Under the terms of the deal, in which Tao Bao will be rolled into Alibaba, Yahoo! will pay US$1 billion to Alibaba and existing Alibaba shareholders and will contribute its entire existing China business to Alibaba in return for a 40% stake in Alibaba. SOFTBANK will remain the entity's second largest shareholder with a 30% stake, and each of SOFTBANK and Yahoo! will designate one of the four directors on Alibaba's board. The deal creates the first Internet and e-commerce company in China by combining Yahoo!'s search engine with Alibaba's fast-growing e-commerce and on-line consumer auction business.

Alibaba, based in Hangzhou and with other offices in China, Hong Kong, Silicon Valley, and Europe, first raised $5 million in seed money in 1995 from a group of investors including Goldman Sachs & Co., Fidelity Investments and Investor AB of Sweden (in a financing where we represented Goldman Sachs).

The Morrison & Foerster team led by Tokyo partners Ken Siegel and Stuart Beraha, included Ivan Smallwood, Jonathan Wise and Sam Inohara in Tokyo, with Tien Chao and Alice Liu assisting in Hong Kong.