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January 15, 2013 11:09 am
Jack Ma, the founder of China’s largest e-commerce company Alibaba, has announced his resignation as chief executive, the latest step in a long-running restructuring of the group that dominates the fiercely competitive sector.
In a letter sent to staff, Mr Ma, a godfather of the Chinese internet and one of the country’s management gurus, said he would relinquish the post of chief executive on May 10 but remain as executive chairman.
“In the future, my responsibilities as chairman will focus on strategic issues under the guidance of our board of directors, and I will assist the CEO in the development of our culture and talent as well as helping our team to strengthen our social responsibility efforts,” Mr Ma said in the letter.
While Alizila, the group’s in-house news website, said the move would send “a ripple of shock” through the industry, analysts said it would change little after a recent group restructuring made the chief executive’s job much less important.
Last week, the company announced it was breaking its business up into 25 different units led by different executives.
“That gave the heads of the individual units a lot more power and independence and reduced the importance of the group chief executive, so I see Jack Ma’s move as the natural next step,” said Li Zhi, principal analyst at Analysys, an internet research firm in Beijing.
Industry experts also said they saw the restructuring as another signal that Alibaba was preparing to take the entire group public. It took Alibaba.com – the unit that runs its online platform for trade between businesses – private last year as part of a deal to untangle its links with Yahoo , the US internet group. Last September, Yahoo sold half of the 40 per cent stake it previously owned in Alibaba Group after a 2005 deal that gave the Chinese company control of Yahoo’s China site.
Bankers familiar with the company say Alibaba is ready to take the entire group public in the second half of this year. However, a source familiar with the situation said an initial public offering was “at least a couple of years away” and insisted Mr Ma’s resignation as chief executive had little to do with listing plans.
“It is part of our succession plans,” the source said. Mr Ma said in his letter: “At 48, I am no longer “young” for the internet business. The next generation of Alibaba people are better equipped to manage an internet ecosystem like ours.”
Alibaba had revenues of $1.1bn and net earnings of $293m in the quarter to last June, according to an SEC filing by Yahoo, which holds a major stake in the company. These numbers, which are the latest available for Alibaba after the Alibaba.com delisting, mean the group is much larger than most competitors in any of its businesses, which span an online mall for the domestic market, global business-to-business services, search, cloud services and social commerce.
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