Alibaba’s Jack Ma: Make Up Your Mind, Yahoo
The last time Jack Ma was onstage at a D event, he spent a lot of time talking about Yahoo. And this time he’s sure to do the same, since he’s publicly announced his interest in buying the troubled Internet giant. But Ma and his Alibaba Group cover an awful lot of ground in China, from e-commerce to recent excursions in search and beyond, so this should be a wide-ranging interview.
10:16 am: Walt takes the stage to introduce Peter Kafka, who will be interviewing Ma for the absent Kara Swisher today.
Peter Kafka: It seems like every time you’re on stage with us, we have to talk about Yahoo. So we may as well get that out of the way right away. We heard from Jerry Yang. What’s the latest? We know that you’ve expressed interest in buying all or part or some of Yahoo over the summer; in the past you’ve been trying to sort of at least get Yahoo out of Alibaba. So where do things stand right now?
Jack Ma: I think we still have not changed our mind, and we keep our strong interest on the Yahoo. The things that we are waiting for the Yahoo board, and especially their independent directors, to tell us what exactly they want to do.
PK: What do you think they want to do?
JM: I don’t know. [laughter] I’m waiting.
PK: And what have you proposed to them?
PK:JM: Well, I think not us, I think a lot of people have already talked to Yahoo for years. And I think we are, we have to know exactly what their — I know they have a lot of options, but you have to take one option first, what they want to do.
PK: Yeah, Jerry Yang said they have a lot of options, a lot of things on the table.
JM: Okay, I did not know that.
PK: They’re going to make one decision.
JM: Yeah, they have to make one decision.
PK: So, in the past you said, “I’d like to extract myself from Yahoo,” and I think you surprised some people this summer at Stanford when you said, “I would like to buy all of Yahoo.” Is that still what you would like to do if you had that option?
PK: You’d like to buy the entire company … Alibaba —
JM: Yeah, even though, as I said, if the, their board say … Yahoo, I’m interested. If our piece. We are interested, but just let us know what they want to do. [laughter]
PK: I understand why you’d want to buy back Yahoo’s stake in your company.
PK: Why would you want to own the entirety of Yahoo?
JM: Well, I think Yahoo is so important to us, and we are also very important to Yahoo. And Yahoo is also so important to the industry. And we, you know, we’ve been thinking about that for a long time, we talked to Yahoo for a long time, and of course we know there is something that we can add value to Yahoo.
PK: Why are they important to the industry? Why — and how could you add value?
JM: Well, Yahoo, without Yahoo probably I will not start my Internet business, ’cause Yahoo, when I started business, Yahoo was my idol. And I don’t want my idol to fall down, and it’s so important to us, ’cause we are partners for so many years. And you don’t want to see your partners in trouble. So, if you can do anything to help, just help. If they don’t want the help, then don’t help them.
PK: But you guys have said recently, several times, that really that Yahoo doesn’t add a lot of value to your operations here. So I don’t want to belabor this, but I would assume that the main value to Yahoo would be to sort of get them out of your hair. But if you had to run the U.S. part of the company, and Jerry was on earlier and said the idea is to become the premier digital media company, is that what you would do with the Yahoo U.S. operations, and operations outside of China?
JM: I never tried to say, “Well, we want, I want the team, I want the market to know what exactly the company should do.” The people should know where they want to do, and make this thing come out and happen. Otherwise, this thing will go nowhere.
PK: Well, you said the people, you mean the management?
JM: I mean the management, and the people — I mean, when I say people in the company it’s about my colleagues. We know this is what we believe, if it is our belief, make it happen.
PK: So, if you were in charge of all of Yahoo today or tomorrow, what would you do? It’s your management.
JM: I think Yahoo is a great company, with great assets. And also, I think there’s so many great CEOs in U.S. that can run this business well.
PK: So you would bring in new management?
JM: Yeah. I don’t, I don’t — I think it’s a big challenge for Chinese people to go to the U.S. and run an American company. But we could definitely help.
PK: And you have a shortlist of people you’d like to hire? You want to tell us who you’d put in charge? [laughter]
JM: That’s, that’s too early to discuss about that.
PK: Okay, I tried.
JM: Of course, we will be thinking about that now.
PK: And I think you can answer this pretty quickly, but in the past, it’s been quite obvious that if you were going to buy all of Yahoo, you’d need financing, you’d need partners. And then there was a weird story that came out earlier this week, and it was a translation issue perhaps, but it said, “Jack Ma says ‘I have $20 billion, I can buy all of Yahoo by myself.'”
PK: Am I missing something?
JM: I absolutely don’t have $20 billion. [laughter] But I’d love to, right? I think money’s, finance is not, never a problem. Today the financial market is no good, but the money is there. We’ve been working with Yahoo for years, and trying to buy some back and work something out, so we never think that the financial is a problem. The problem is what they want to do.
PK: Jerry was here, did you talk to him earlier? Did you ask him this yourself [laughter]
JM: No, I did not meet him today, and I just arrive last night for this event and go back.
PK: I’ve got to say, one of the cool things about an event like this is backstage — you can’t see this, but there’s lots of people hovering back. And you just talked to Jack Dorsey, from Square and Twitter, I think that was the first time you guys had met.
PK: Do you think there’s a business relationship between your company and either Twitter or Square, going forward?
JM: I think there will be a lot of business going on with our company with the U.S. economy — I see when I look at so many American amazing Internet companies. I think there are so many things that we can work together. So many. If, especially when we go to the States, we have to find partners, instead of finding competitors. And when they come to China, they need partners. And we are one of the best partners people can find.
PK: A lot of U.S. companies have come here with mixed records: eBay, sort of a competitor of yours, came, basically left; Google left for different reasons. Why do you think some of the big Internet companies have struggled, the big U.S. Internet companies have struggled in China?
JM: I think any company go to any nation, you need to have this struggling. The very important thing you should have is patience. And instead of looking at your own strategy about the … you should focusing on the customers in the local market. Serve them well, just like any entrepreneur, any business going there. For example, when we start Alibaba, I never thought this thing, and I believed this thing would never succeed within first five years. Takes about at least eight, 10 years. When I start a … I say, “Let’s wait ten years later, not now.” So if you come to China, or any big Internet companies, think about five, 10 years later what’s going to happen, instead of next year, five months later what is going to happen.
PK: You started your first Internet company in 1995, when most people weren’t starting Internet companies in any part of the world, with the exception of a few in the U.S.
PK: Were you looking out five, 10, 15 years ahead then? Or were you just marveling at the fact that you could use Prodigy to dial up to the Internet?
Jack: Well, yeah, I start — You know, people know about Alibaba knew about … Alibaba know about today what we are doing. But the people did not know our China pages and our, the … Web sites, all filled. They only see some good side and they don’t want to see the bad sides. And when they see the bad sides, they forget about the good sides. So, I think it’s a long, when we started, we thought it would, we probably would be successful in three years and fail. And then, we start Alibaba, we know, “Okay, it takes long time.” When we start Alibaba — Taobao, we say, it’s a long time. When started Ali-Paint we know it a long time. So whatever we do today, everything, and I think as the CEO, everything I did, the decision I made, I asked myself, asked a team, “What’s this thing going to happen in five years?” And 10 years? Not in five months. I don’t want to see five months.
PK: And with the pace of change in any part of the world, but especially with the Internet, especially with Asia, where all these things are growing so fast, is it realistic to say, “I’m going to try to predict what the world will look like in five years?”
JM: Absolutely. I think when everybody’s talking about a fast and quick, you should think about slow. When everybody think about slow, you know, we have a long time, let’s move fast. This, this is always the right way to do business. Well, I did that, and now we, and everybody, everybody’s criticize this, and so wait a minute, let’s think about it. Everybody think this is a great, okay, be careful because you may not have the chance.
PK: Counterintuitive thinking, it works for a lot of people. One of, one of the themes that I, Walt brought up with Jerry, and I think he’ll, we’ll bring up throughout the conference, is this notion that a lot of what we’re seeing in China from the technology community, or what we could charitably call imitations of things we’ve seen in the U.S. Most of the stuff here comes from the U.S., and in iterates, to put it politely. First of all, do you agree with that, with that description?
JM: Mmm. No, I don’t really. I think, you know, the na–, I respect intellectual properties, I respect the great ideas, innovation, but these things, if nobody use it, if nobody devel–, if nobody innovate on innovations, that’s a big problem. You know, the IM was AOL first — I think the ICQ first made it, but now … make it even better. Right? And Twitter did a great job, and Weibo in China, also did a great job. And China invented the … but the USA and Western country made it better. The campus, everything, you know. The war is about learning.
PK: So you’re not spending time thinking, “How can I create the most innovative possible company,” you wanted to, that’s not keeping up enough.
Jack: I never think about “How can I make this company most innovative?” only think about how can I make my customer much happier and comfortable and last long. I don’t care whether people call you, “Jack you’re, your innovative company, or internet techno–” We are service company. Our job is using Internet as a tool to serve the customers, instead of, “Oh, we are innovative company.”
PK: And let’s be clear about who your customers are, ’cause it — some people might be confused about it. It’s generally not a consumer, right? You’re generally a B2B play.
JM: Yeah, we started from B2B play, we just focus a small business. My customer, as I said, my belief is my customers always be small business entrepreneurs. ‘Cause I’ve been working as a start-up entrepreneur for 15 years. And I know how tough it is, how difficult it is. Somebody, if somebody got it, help them, it’s not, Jack Ma can’t help them, it’s the Alibaba people useI internet that can help the small business. So, my customer is small business, entrepreneurs, and …
PK: [interposing] Small-business entrepreneurs who want to sell something, you enable that.
JM:: Sell something on the Internet.
PK: Like these shoes.
JM: Oh, yeah, yeah, this the shoe I bought on Taobao, because, oh, some, some lady in the countryside, they are making shoes and selling online, and I think if I buy it for $20-$30 … and they can have a job and they have fun, and I feel very comfortable. I think I’m getting older, love this kind of shoes. It’s very comfortable.
PK: They look comfortable. I might get some for the flight back, I don’t want to have a Kara Swisher incident. [laughter] But you guys just raised prices for some of your merchants, and that inspired a big protest. And you didn’t really back down. You didn’t change your mind. When customers or people who say that they’re customers, tell you they’re unhappy with the way the company is run, and you don’t change your mind, you say, “I’m going to go ahead,” what should we take away from that?
Jack: Yeah, the the past 10, 10 days was the, one of the most painful days for me, in my life. And when I fly back from the States to China to solve the problem, I listened to music, there’s a sunset, the people hurt you most are the people you love most. And I love the … I never thought about that. Alibaba never think about raising, you know, for the, raising the price and collecting more money from the poor SMEs. The purpose for doing that is because we want against the fake products, intellectual properties.
PK: So let’s explain exactly what you did do.
JM: Okay. We have, for Taobao’s side, we have one billion proud listings. And we have over 70 million unique visitors every day, and we are probably the largest e-commerce site, if not in the world, we’re at least in Asia. But there are a lot of fake products, intellectual property issues, and so we got to solve this problem. If we don’t solve the problem, Taobao will never last long. Three years, five years, we’re in trouble, ’cause we have to respect these things. So we said, “If anybody sell these kind of things, if you sell one, we find out, we’ll pay fine for five times.” And take the businesses seriously. And anybody come to Timo, which is focus of big B2C, all this big business —
PK: It’s the equivalent of a mall, an online mall.
JM: It’s a mall. We have 50,000 business selling these things on our site. So we said, “Anybody, if you’re on Timo, no intellectual property issues, no fake products,” all those were serious punished. And this message turned out to be we raised 10 times more fee. Because, thanks to the Internet time, you know, people don’t believe for the, what you want to do, people believe the rumors.
PK: You blaming that on the Internet or just human nature? The answer is human nature. [laughter]
JM: I think human nature plus the Internet [laughter] growth very fast.
PK: We’ll do our best to get things accurate. At least this is being recorded, so people can always check, check back. But you still had a lot of people protesting, and you didn’t back down. You said, “Well, we’ll try to make this more palatable for you, we’ll create funds that will make this easier for some merchants.” But it didn’t cause you to rethink your strategy?
JM: No, I, I’ve side, I announced firmly and clearly that we will never step one back from the intellectual property problems. And, and these fake products, and these is trust problem. So, but, helping small business entrepreneurs, we will do it. And the way, how we communicate, we are reviewing ourselves. So, that is why we invest. The problem, this problem can never be solved by Alibaba alone. This problem can never be solved within three years. It’s a long one, this is why I’m getting, oh, terrible days. But you know, this is why they probably decide to need us.
PK: I think if you buy Yahoo, there’ll probably be more difficult days ahead.
JM: More problems, oh, yeah, oh, yes. [laughs] Oh, yeah.
PK: But you’re okay with that.
JM: But you know, you know, if life is so short, if you really do, can do something, that help others and meanwhile you enjoy it, you know, enjoy. The other side is a pain. It’s your own choice. If you pick it up, go ahead. My friend said, if you pick up the way go to paradise, go ahead. If you pick up the way go to the hell, go ahead. [laughter]
PK: What about a nice middle ground? [laughter]
JM: No, you have two options, you have to pick up one. [laughter]
PK: Back to the U.S. for a minute. You bought a couple companies in the U.S., some of the other big Chinese Internet companies, Ten Cent in particular, have bought several more. Is that something that interests you? Do you want to acquire more companies within the U.S., or are those sort of one-off purchases?
JM: Well, I think we are interested in partnering more, and we are interested in invest — I think U.S. in need more Chinese investment, foreign investment. And they should accept it, because it’s good for USA, it’s good for the others. And I don’t want to come, to go to U.S. or go to Europe and just to go there fighting. We want to go there partnering.
PK: And the reason it’s important for the U.S. to take in Chinese investment? Spell that out for us.
JM: They need jobs. They need innovation from the others. Yeah, they, I think it’s great, U.S. have so many great innovation, like Apple, this and that. They also need a tiny SME innovations, which we can bring.
PK: You don’t think eBay’s going to take care of that on their own?
JM: Well, I think that eBay should take it up themselves, you know, they have great ideas and they, they develop it. Does not mean that this market should be eBay alone. And they come to China, I mean, anybody can do.
PK: So, you sort of own this commerce market in China.
Jack: Well, no, we are contribution.
PK: You dominate it. [laughter]
Jack: Yeah. I help.
PK: It’s a good thing. And the other big Chinese Internet companies all do things that are separate from that, but it seems like you’re starting to rub up against each other, along the side. Baidu is the dominant search engine, you’ve created your own search product. And you said something to the effect of, one of the reasons we’re doing a search engine is we want to sort of make it difficult for the folks at Baidu to sleep at night. Do you think you’ll become more direct competitors over time?
JM: Yeah. Yeah, absolutely, because it’s good for markets, it’s good for industry. It is good for — we are, we’ve been separating Taobao three, three companies, in June, you know, because Taobao’s getting bigger, so I separate it in three. And the other, one of the reason is that I want, that make, running big company like a small company, make us small and the industry will be bigger. If we are big, industry was small. So, separate to three, and I said, well, 10 years later, any small piece of the three pots bigger than the others, let’s separate the three again. So, the competition, I don’t really focus on competition a lot. Competition is just, to me, is a dessert, it is a fun part of the business.
PK: But inevitably, like the bigger you get, and the bigger your people who aren’t competitors but might be, get, that stuff’s going to overlap. I mean, the analogy in the U.S. would be Apple and Google weren’t competing for a long time; now they are. Amazon is, in theory, a separate business from Apple and Google, but there’s a lot of overlap there, on and on and on. Do you think that’s inevitable in China?
JM: Absolutely. This is a market effect. You have to face it, you have to challenge it. And e-commerce is … Taobao is big, but compared to the tomorrow, the future, e-commerce, it is pretty small. It is pretty small. It is just a beginning. And I think it’s not — one thing I feel very different, because not only may, not only China, especially in the U.S., a lot of people that do their business, think first of competition. And I think the first is the customer, how big the customer base. And then think about, when you get tight, let’s find some competitors.
PK: So, don’t go find a market where there’s no competitors, find a market where there are a lot of customers and …
Jack: [interposing] Exactly. When you get bored, find the competitors. [laughter]
Jack: Yeah, it’s true.
PK: You’re not bored yet.
Jack: Well, no. I’m kind of busy, I have to go back to business, you know?
PK: Let me just ask you a couple philosophical questions. Someone asked you a question, I’ve seen it on some previous interview, about donating money to charity and doing philanthropy. And your answer, in short, was, “I’m not that interested in that because what I think, I think the best use for my money is to build companies and to create jobs.” Do you ever think about reconsidering that, and thinking, “Well, maybe I could do something with these resources”?
JM: Well, I never said that I do not donate money to something. I think we probably contribute, I don’t know about the other Internet, Chinese Internet, we give 0.3 percent of our revenues to … to the environment protection.
JM: Right? And we, I think, you know, I think together with my colleagues, we prob–, I probably spent a lot of money and efforts on doing this thing. Because it’s my private thing, I just don’t want to tell in the public it’s a private thing. I don’t want to say, “Well, I’ve donated money here.” Because for a business, I agree with … had a business, we have to bury our social responsibility into our business model. Instead of, well, “I’m making some money here by cheating the others,” and then donate money. I hate that. The business model itself should be, create value, and be good to the society.
PK: But, very often what a customer wants, you’re trying to serve the customer, may not be good for, say, the environment, right, the two can be–
Jack: And then don’t do it.
PK: –in natural conflict. So, who, what wins, if there’s a conflict between what a customer wants and what the effect might be on the environment?
JM: I think the choice is very clear. If it is hurt the environment, if it is no good for the society, just don’t do it. No matter how much money–
PK: Even if the customer says, “Give me more of that.”
PK: “Take down that tree, dig up that hole.”
JM: Yeah, exactly, just … did last week, people say, “I want in on these kind of fake products,” intellectual properties. I say, “Well, kill me or put me in the prison, this is my decision.” I have principles.
PK: Is it realistic to have companies self-regulate themselves instead of the government doing it? I mean, we have this debate in the U.S. constantly, we go back and forth. Right now the pendulum is sort of tilting I think towards self-regulation.
JM: Yeah, where, whether there’s a government regulate or yourself, it’s your own belief. If you believe it is right, you don’t need other people to discipline you. And it’s better for the market, you know, company’s a market product. What I believe is that this is something you’re doing this good for the others, just do it. Right? Don’t wait for the government come. And if they can come, sometimes things get messed up.
PK: Another government question. In the earlier interview with Yahoo, Rose said, I think it was Jerry, perhaps, it was Jerry, said, “It’s an open question about whether or not censorship is going to ultimately stifle real entrepreneurial spirit and drive and creativity in China.” And it may be that enough government restriction will make it difficult for entrepreneurs to really succeed on the level we’ve seen in the U.S. and other countries. Do you agree with that?
JM: Well, it depends on which angle you see. I think censorship is, yeah, it’s issue, but it’s not that big issue. Let’s look at the good side of the Internet, let’s look at the good things you can do. This is always my optimistic view. If you focus on one side, for example, censors were so serious you got tied up about that, and we started developing the others. And I think Chinese government is sometime, you know, they are getting, they are getting more and more open. And then in some period, they’re getting close. Which I think it’s very natural for people like me, sometimes very happy, sometimes not happy. You know? Confidence … Tai Chi …
PK: [interposing] Do you think they inevitably, do you think they inevitably grow more open as commerce grows, as the country gets bigger? Or do you think they could still pull back?
JM: Yeah, this is, this is what I’m doing. I think the e-commerce, the commerce and trading, trading can help people understand each other, make full use of the Internet by creating value for the others. And then the more they do it, if you’re accountable, they release. So, but, I think it’s like in the company, when I look at my colleagues, my partners, my assistant. If you look at the bad side of this guy, you can never make things forward. Well, his best side is my, this is why I, they need me. Because Jack Ma’s shut … that’s why Jack Ma needs partners. So I think we try sometimes, you know, censorship, let’s see as a business what’s the opportunity we can do? And then, make them comfortable, things will get better. I hate to criticize people, I mean.
PK: But you will.
Jack: Yeah, sometimes get just annoyed, and I mean, then I criticize myself and then change, you know, this is life.
PK: So we started this interview 25 minutes ago, I asked you about Yahoo, this situation changes a lot — has anything changed in the last 25 minutes? Are you going to buy Yahoo [laughter]
JM: No. I said we are waiting for answers. And there are so many people talking, and talking to us. And we will start to talk to them. Very, in the next few weeks. Because if we don’t do it, it’s no good for all of us.
PK: So if I ask you in a few weeks, I’ll get an answer.
Jack: I wish I could, it’s not on my side, it’s their side.
On to the audience Q&A …
Q Hi, I’m Justin Fung from HSBC. In your China 2.0 interview at Stanford, you mentioned that China’s going to go through many of the same challenges that the U.S. is going to go through in about three years. Can you go into a little bit more detail as to why you feel that’s going to happen in three years? What are the key issues that they’re driving at?
JM: Thank you. I’m not a financial columnist, but I just as a business guy, you have to smell what’s going on in the market. It’s instinct. And I think what’s happening to the U.S. today, and Europe, is going to happen in China, next three, five years. The problem, like of job problems, the problems like the economic structure problems, will all appear. So, the import/export problem, because the Asia — the USA economy and European economy, the China exporting, the problem is getting even worse, it’s getting worse. And the other thing is a domestic demand, we need take actions. And also in China called upgrade. Upgrading you have to pay the price. And I don’t see people are ready to pay the price yet. And these things are losing, and anything three years later, I think the past 30 years, for the first 10-some years, private sectors bump up the China economy. And next 10 years, in the international companies, multinational companies, half to China.
PK: Can you be clear about what you mean by upgrading? Who needs to upgrade? What are they upgrading?
JM: Well, China government it’s called upgrading, you know, and transforming called [Mandarin] upgrade whatever management or upgrade the industry. Upgrade, you have to pay the price. For example, I’m upgrading Taobao against these kind of intellectual properties. I got to pay price, I got 50,000 people demonstrate against me. But that’s the price you have to pay. If you don’t pay, come back to work, get bigger. So, this is the issue we are facing. We have to take the challenges. And I don’t see a lot of people ready to take challenge. They’re ready to talk, but don’t take challenge yet. So, if we don’t take challenge, three years later you will see what’s going on. So that’s my point: Let’s get ready for that, and jobs, as in small business, private sectors, they are going to be facing troubles. And we have to get ready for that. Thank you.
PK: In 2008, in retrospect, it’s easy to say you saw this coming, but you did see that there was going to be the credit collapse.
PK: How are you feeling about the next six months to a year, nationally, internationally?
JM: Well, I don’t see there are any, for China. I’m pretty confidence in the next two years that, well, the problem will come in three, five years.
PK: And can you imagine what that precipitating event will be? What will trigger that problem?
JM: I don’t, I’m not fortune teller, just to say this thing is going to happen. And we got ready for it. If this thing, if we’re ready, that thing does not happen, everybody happy. For example, when we talk about the financial crisis, what’s the early beginning of year 2008, we find something wrong. So, I make the whole economy get ready for that.
PK: What was the signal to you that there was something wrong in 2008?
JM: Import/export is in problems. And people, for the forums, every forum I go, people talking about IPO, people talking about PE, people talking about profit margin, yet nobody talk about the value we created. People start greedy, people — everybody’s talking about how many, you know, times you can go, if you got to raise money and the IPO. So I know something wrong. People change. If everybody change that direction, this angle is in problem.
Q I’d like you, if you could talk about online currencies in China, their importance, and how you see the government attitude towards them as they grow.
JM: Okay. Honestly, I’m not, I may not be right, because few years ago when we talk about the online virtual money in the Alibaba internally, and I’m, I was strongly against it. Because I think if you are doing business in China, better believe IMB is the only currency. And if there anything that could probably get annoyed people or the government, just don’t do it, because there are so many ways you can do it. So, I was against it, and later that thing grows so fast. And I still think that Alibaba should not involve that. So that’s why Alipay the only currency for Alipay is IMB. Which, you know, we accept U.S. dollars, too. [laughter] But virtual money, I worry about that. I don’t — I just don’t want to have, like, 1,010 minutes of coins which I don’t know what I’m going to do. And the bigger that thing is, the government would take action. And they will. Any government will. I don’t know how, but I, I think they will. So, but based on the IMB, U.S. dollar, the pounds, I feel more comfortable on that. So, for example, why we did not do the online gaming? Because when, many years ago when everybody, any company, goes, “Let’s do the online gaming thing,” I know someday the government would take action where every kids are learning how to killing. [laughter] Something’s going to happen. Now it’s peaceful and quiet now, it’s much better. This is, this is, say, this is what I — when either you can make the too big or this become two bigger problems. Somebody got to involve it. So, I don’t know, I cannot answer the question, I just Alibaba does not have the intention of doing that, ’cause I worry about.
Q: Hi there, Richard Lai from Engadget here. Your company recently released Aliyun OS, which is a new mobile operating system. And last month you announced plans to release an English version, and even a tablet version in the near future. Can you talk about what benefits that will bring to the Western market, and even to Alibaba itself?
JM: I think, you know, a lot of companies are talking about cloud computing. And we take it very seriously because we have so much data. Datas from small business, datas from the consumers, and datas from Alipay transactions. And I think three years ago, we met internal, the strategic meeting, I sat. We don’t know how to make from the datas, but I believe datas will be so important to our small business, our consumers, and manufacture base. So, let’s, let’s invest money, then. We’re not sell, because of cloud computing, we are selling softwares; we’re not selling hardwares, we are selling services to these. So, this is our principle. And the, the OS for the, for the mobile phone, I think the next big wave, which we have to face the challenge is mobile Internet. We should make Internet mobilized. And how we can, how we can do that, China have like, I was told 60, 600 million mobile phones. And most of them are feature phones. And one thing struck me why I want to do — when people talk to me, they say, “Jack, we’re going to OS, we’re going to launch an OS.” I was shocked, “What, OS?!”
So complicated, how can we do that. Right? ‘Cause why Alibaba can do it? And these crazy guys working for, for one year, you know, our OS came out. It’s not beautiful, like any babies when they were born, it’s ugly looking. [laughter] But the mom always say, “Beautiful,” right? But takes time to make it beautiful. I said, “Wow, the baby’s there, let’s make this beautiful baby, baby beautiful.” But the thing that make me work on whether we will have the opportunity to do it, or the other company have, the opportunity to do it, China needs an operating system to lower the cost of mobiles. And I read one news, which I was touched, moved and I came back to talk to the CEO of Ali … We pay any price to move this industry up.
PK: You don’t think Google, Apple, people who are in the OS business, already spent a lot of years making that ugly baby prettier? You don’t think they can do this for you?
JM: Let ’em do, let them do it. They should do it, like on eBay when they have 90 percent market share, I want to do it. The purpose I do it is different from eBay. And I think the market is so big. You know, I tell you the news, why I, the news I made full determination to do it. I read an article in the newspaper, there is a girl, 11 years old, her parents went to the city, as a, you know, as a city worker, and brought her, brought them together. She was 11 years old, the only things stay with her was three cats, seven chicken, in a lonely big house. And she wants to make phone call to her parents, but it’s too expensive, and it’s also so far away from where she live, in a village. So, I say, “Let’s make this mobile thing cheap. Make these girls can call their parents, brothers, at the cheapest prices. Second, when I see my daughter playing the iPad, I think all the girls should have this opportunity. And as whether we’ll make money or not, I don’t care, ’cause Alibaba, you know, we have so much cash, we need to be invested for the future. Let’s do it. So, this is what I believe.
Q: Does this also mean you’re also looking into maybe offering data service, as well?
Q: So, does that mean you’re looking into maybe entering that market as well?
JM: Yeah, at least if we’re not entering the market, we want promote, we want to encourage more people entering that market, making sure that the total cost of mobile going down, making sure China with the, with the managing factory capability, with innovation, with so many people today telling me, said, “Jack, you know, to make a Internet entrepreneur, this job is so difficult, because you guys are there.”
PK: So if you’re not going to get into wireless yourself, how do you encourage other people to do it and to bring the price down?
JM: Yeah, we are building up the infrastructure as always. We are not making trade our self, we build up a platform, making all the Taobao and Alibaba sellers to do it. We try to promote the industry, to make industry, because see, last six months was amazing, amazingly funny. When we announced we go to the mobile things, suddenly everybody said, “We are being in mobile system.” This is what I want. Let’s get people move with that. Because the mobile Internet is such a huge potential market for next China’s innovation.
Q: Coming back to Yahoo, there’s so much speculation about this future of Yahoo, but something most people are agreed on is that whatever happens to Yahoo, Alibaba is going to be thickly involved in any deals surrounding Yahoo. Do you agree with that analysis?
Q: Can be any deal for Yahoo without you being involved?
JM: Oh. I did not know we’re so important. [laughter] We wish we could, that’d be, that’d be that inference. But definitely, we are the main driving force. And we want to be the main driving force, and we want to do this thing as a partner-like thing.
Q: Okay, one follow-up question is you mentioned your interest in buying the whole of Yahoo. But do you see other outcomes for Yahoo? Do you think perhaps some people have speculated perhaps you’ll be interested in buying back your own stake held by Yahoo? Is that a possible outcome? Do you think that is more likely? Less likely than the sale of the whole of Yahoo?
JM:My answer, first, we are ready. Second, we also have options. And third, we are eagerly waiting for answers. [laughter] And they have to make decision. Today, as this environment, all the beautiful flowers withdraw very quickly. [laughter] And we got to, time is so precious for all of us. It’s not a good, it’s no good for Yahoo. It’s no good for everybody.
PK: So if you can sum up, Jerry Yang, Yahoo, independent directors, please make up your mind. Signed, Jack Ma.
JM: Yes! [laughter]