Yahoo's top brass set aside the first hour of its annual analyst day today to receive a public flogging for itsthe spinoff of one of the jewels in its portfolio, the Chinese online payments group, Alipay.
CEO Carol Bartz, co-founder Jerry Yang, and Chief Financial Officer Tim Morse spent the better part of that time reiterating that the company--which owns 43 percent of former Alipay parent, the Alibaba Group--is working to make sure it is fairly compensated for the spinoff. It's a big issue for Yahoo, which has seen its fortunes slide in recent years, because the company's Asian investments may represent 75 percent of the market valuation of Yahoo by one estimate.
Investors were spooked earlier this month when Yahoo disclosed that Alibaba no longer has control over Alipay, which aspires to be something of a Chinese PayPal. To make matters worse, the company knew of the spinoff in March, but never disclosed it. Yahoo shares tanked as a result.
"Simply put, very simply put, we believe our disclosure was timely and appropriate," Bartz told analysts at the Fairmont Hotel in San Jose, Calif., this morning. "We have approached this thoughtfully and methodically."
Analysts, though, kept pressing the trio on the decision process, curious how the company could be seemingly caught so by surprise by the news from a company in which it holds a 43 percent stake. To those questions, Bartz, Yang, and Morse declined to look backward.
"We've agreed with Softbank (another Alibaba shareholder) and Alibaba that none of us are going to discuss the past," Bartz said.
Instead, the Yahoo executives focused on two issues, and repeated them as the default answer to nearly every question. First, the company stressed that Chinese law requires that Alipay must be owned by a Chinese national to obtain a license to do business in that country. And second, Yahoo is working with Softbank and Alibaba to make sure they get "appropriate compensation" for Alipay.
"I know it sounds like we're being repetitive," Bartz said during a question-and-answer session as she repeated the two-point refrain, even as analysts pressed for more details.
It seems unlikely that the session will be enough to assure investors and analysts that Yahoo management has the issue under control. There remains some dispute over when Yahoo learned of the Alipay sale. Alibaba has said its board, which includes Yang, was informed of the deal nearly two years ago. And when one analyst pressed Bartz to be more forthright, saying that she's usually "straight-forward," Bartz balked and declined to explain how Yahoo was caught off-guard.
Correction 11 a.m. PT: An earlier version of this story misstated the name of the company that Chinese law requires must be owned by a Chinese national to obtain a license to do business in that country. It is Alipay.