As Alibaba prepares for a hotly anticipated initial public offering, the Chinese e-commerce giant is still busy striking deals. But its latest may raise some eyebrows.
Alibaba has agreed to pay about $ 75 million for a minority stake in ShopRunner, a retail shipping service run by Scott Thompson, who briefly, and controversially, served as Yahoo’s chief executive, a person briefed on the matter said on Saturday.
The investment is one of several that the Chinese giant is making to both expand its operations worldwide and to gather new ideas for its home market.
Both will likely help Alibaba as it prepares for its planned I.P.O., which has already drawn interest from swarms of potential investors and bankers hoping for a piece of a giant global transaction. Though the company hasn’t committed to a time frame, an stock sale could take kick off by year end, people briefed on the process have said.
ShopRunner, which provides free two-day shipping services for retailers similar to Amazon.com‘s Prime service, could eventually yield new insights for core Alibaba businesses like Taobao.
Since last summer, ShopRunner has been run by Mr. Thompson, a former senior PayPal executive who left Yahoo amid a storm of controversy. Picked as the Web pioneer’s chief executive in January 2012, he quickly became a target of the activist investor Daniel S. Loeb, who uncovered embellishments in Mr. Thompson’s academic credentials.
The board eventually removed Mr. Thompson as chief executive in May of that year, roughly five months into his tenure.
He surfaced as the chief executive of ShopRunner two months later, returning to his roots in e-commerce.
Despite the controversy, he had maintained a bond with Alibaba executives. It was Mr. Thompson who had led many of the start-and-stop talks that led to Yahoo’s deal to sell half of its stake in Alibaba back to the Chinese company, yielding a multibillion-dollar windfall that has underpinned much of the American Internet company’s resurgence.
News of Alibaba’s investment was reported earlier by The Financial Times.