UPDATE 2-Yahoo to take time finding 2nd Alibaba board member

* Not expected to name board member on Oct. 24 -source

* No decisions made yet -source
(Adds former Yahoo exec comment, background)

By Alexei Oreskovic

SAN FRANCISCO, Oct 22 (BestGrowthStock) – Yahoo Inc (YHOO.O: ), part
owner of Alibaba Group, is not expected to immediately name a
second board member at China’s No. 1 e-commerce firm as it is
entitled to, a source familiar with the matter said, at a time
when the companies’ relations are strained.

Yahoo co-founder Jerry Yang now occupies a sole board seat
at Alibaba. The U.S. company bought a stake of about 40 percent
in Alibaba in October 2005 and has the right to name a second
director on the fifth anniversary of the deal, which falls on
Sunday, Oct. 24.

The news comes as Yahoo’s relationship with Alibaba shows
signs of strain, with Alibaba having tried unsuccessfully to
buy its shares back. Private equity firms including Silver Lake
Partners have also explored a buyout of Yahoo that might entail
combining it with assets of AOL Inc (AOL.N: ) or News Corp
(NWSA.O: ). But sources have said any buyout would be contingent
upon Yahoo selling its stake in Alibaba.

“The company is going to take some time to select an
appropriate candidate. No decisions have been made,” the source
told Reuters on Friday.

With two board members, Yahoo would have the same
representation on the five-person board as Alibaba’s
management, according to the contract between Yahoo and Alibaba
that spells out the board representation. A representative from
Japan’s Softbank occupies the fifth seat, the contract said.

Yahoo declined to comment.

Analysts estimate that Yahoo’s Asian assets, which also
include a stake in Yahoo Japan, account for at least half of
Yahoo’s roughly $22 billion market value

Last month, Yahoo Chief Executive Carol Bartz told Reuters
that Alibaba Group “constantly” approaches Yahoo about
repurchasing its shares, but that she was not interested in

Alibaba subsequently said it had made a recent offer to
Yahoo that was rejected. The Chinese firm said Yahoo countered
with an offer that Alibaba characterized as “unjustifiable.”

According to one former Yahoo executive, Bartz and Alibaba
founder Jack Ma have had a rocky relationship since she took
the reins in January 2009. He said appointing Bartz to the
board might not sit well at Alibaba.

“If Carol is smart she will put somebody more palatable
than herself on the Alibaba board,” the former executive said
on condition of anonymity. “With that decision, (Yahoo is)
either going to say we’re going to work with you, or we’re
working against you. If it’s Carol, the message is: we’re going
to be working against you.”
(Reporting by Alexei Oreskovic; Editing by Gary Hill)

UPDATE 2-Yahoo to take time finding 2nd Alibaba board member