Microhoo China

Hiding in the International Club
Is it CNY yet?
1328 hrs.

The prospects of Microsoft buying up Yahoo! are providing considerable titillation for those of us who love industry gossip, are suffering election fatigue, and who dream about being flies on the wall of Yahoo! board meetings.

What few of us have started to consider is what such a combination is likely to mean to China. Certainly, MSN will probably continue to operate as the #2 chat application (far behind Tencent's QQ but a growing fave among office workers). Where it gets interesting is when we start to think about Yahoo! China.

Readers of this blog will need scant reminder that Yahoo! China is owned and operated by Alibaba. Along with a whole lot of other interesting things, Yahoo! owns 39% of Alibaba. If Microsoft buys Yahoo!, it becomes Alibaba's largest shareholder.

Assuming Jack Ma and Steve Ballmer got along (there is no reason to think they wouldn't), the Alibaba investment could be very interesting for Microsoft. In fact, it would provide them several potential avenues - the LEAST of which is the Yahoo! China property - for building their (indirect, but very real) opportunities in China.

Taobao.

Alipay.

Even Alimama.

Think for a moment what it would mean to have these properties backed not only by Jack Ma's savvy dealmaking, but by the sheer muscle of Microsoft.

And think what it would mean to Microsoft to have Jack Ma as its leading advocate in China.

Finally, here is a question - what about Jack Ma as non-executive chairman of Microsoft China?

All very interesting possibilities that, if Microsoft takes the time and brainpower to focus on China in this process, make for some really interesting opportunities.