SHANGHAI Jack Ma insists his Alibaba Group's offer to take private its e-commerce website Alibaba.com for about $2.5 billion - at the same price as the firm's IPO about four years ago - has nothing to do with a separate, complex deal over a stake in his group held by Internet pioneer Yahoo Inc.
Ma, who founded the e-commerce group and within a decade unlocked China's huge online shopping potential, said taking Alibaba.com off the Hong Kong market would allow investors, who hold 27 percent, a chance to cash in while the unit slows its rapid pace of growth and changes its business model.
The former tour guide and English teacher, who is now worth around $1.6 billion according to Forbes and has dubbed himself 'China's Forrest Gump', built his e-commerce empire from scratch and has steered it through numerous bumps.
He is now taking his flagship listed unit private as the business looks to improve its platform rather than just boost the number of subscribers, a shift that's likely to see growth taper off and medium-term profitability dented.
Founded in 1999, Alibaba has grown into an enterprise spanning business-to-consumer (B2C) and consumer-to-consumer (C2C) trade, logistics, search and e-payment. Alibaba.com's various online market places boast more than 76 million registered users worldwide, trading in everything from commodities and motorcycles to flashlights and soft toys.
Some analysts value the group at up to $32 billion.
Ma, 47, lean and down-to-earth, founded the group on the principle of championing small businesses in the battle against industry giants.
But battling giants has become increasingly unavoidable.
Alibaba Group has long sought to buy back its shares owned by Yahoo Inc, which paid around $1 billion for a 40 percent stake in 2005.
At the time, Yahoo was on the up and a tie-in with a strong local player in the soaraway Chinese Internet market looked like a win-win for both sides. But the fortunes of Alibaba and Yahoo have tilted over the years, with the U.S. group's shareholders agitating to unlock the value of Asian assets.
Tough negotiations over a mooted $17 billion cash-rich asset-swap broke down last week, deadlocked, sources close to the talks said, over how to value Taobao, Alibaba's fast-growing online retail business.
"He has been a strong leader in the Alibaba business. In the negotiations with Yahoo, he's always been clear about his interest to buy his stake back," said Dick Wei, a Hong Kong-based analyst with J.P. Morgan.
Last year, Alibaba broke up its crown jewel Taobao, estimated by Goldman Sachs to be worth around $7 billion, into three parts to better compete with rivals Dangdang and 360buy.
More recently, Taobao Mall changed its Chinese name to rebrand itself, and said it would raise fees to improve its service, prompting protests by some sellers on the platform.
Ma has often said his vision is to serve small and medium enterprises (SME).
"My inspiration came from the American movie Forrest Gump," Ma told an American audience in 2009. "Because Forrest Gump said 'shrimp,' we decided to help SMEs. We wanted to catch the shrimp instead of catching the whales."
Catching shrimps in China's booming online market has proved hugely lucrative for Ma.
Taobao, a late entrant to the C2C market, beat off eBay in China in the late-2000s by offering free listing services for its sellers.
"EBay may be a shark in the ocean, but I'm a crocodile in the Yangtze River. If we fight in the ocean, we lose, but if we fight in the river, we win," Ma told Forbes magazine in 2005.
Ma's blend of gumption and brash hopefulness has made him a cult figure among local entrepreneurs, taxi drivers and other ordinary Chinese. Hundreds of small business owners turn up in Alibaba shirts to hear him speak at the annual AliFest, an annual gathering of e-commerce fans and celebrity speakers.
Ma, a dog lover and avid tea drinker, is known to put on fake multi-colored Mohawk wigs and kung-fu outfits at company parties.
But, behind the fun-loving and savvy media figure, is a more Machiavellian Ma, willing to do battle with the international likes of eBay and Yahoo.
"I always remind myself that I can't pretend. I'm not as good as other people say I am. Nor am I as bad as other people say I am," Ma said in a text message to Hu Shuli, editor of prominent magazine Caixin Weekly.
As with other folk heroes, Ma's business style is not without its detractors. Some say his business decisions can be clumsy and unnecessarily gutsy.
In 2005 and 2006, Ma targeted eBay with a media campaign including soundbites such as "In China, they are gone" and taunted the U.S. firm to follow Taobao's free-listings model.
Ultimately, Taobao's free listings and eBay's own poor customer service saw eBay exit China in late-2006. Four years later, with Taobao's dominance assured, the companies' units signed a cooperation agreement, although that ended about a year later.
Ma's run-in with Yahoo and Japan's Softbank over his transfer of Alipay last year hinted at that battle, but with a difference - Ma's reputation among his local loyalists took a very public hit.
Yahoo informed shareholders last year that Alibaba had transferred its e-payment unit, Alipay, to a company owned by Ma. Alibaba said the move was to comply with Chinese regulations and had been discussed at board level, where Yahoo and Softbank hold seats.
Yahoo, however, denied any prior knowledge, and some observers criticized Ma for a lack of transparency in handling the issue.
"The Alipay deal really hit his reputation," said Elinor Leung, a CLSA analyst in Hong Kong.
Other analysts said Ma's ruthlessness may have deterred investors from backing Alibaba Group.
"The Alipay issue will dog them forever. How do you convince your board that after you invest, that won't happen again?" Leung said.
Yet that kind of opportunism is what Ma may need to get a deal done with Yahoo this time around.
"Forrest Gump is not a smart guy, but he is focused. He's not talented, but he is very, very hard working, and he's very simple and opportunistic," Ma said in 2009.
"The thing I told my wife, my parents, and my friends, is the sentence Forrest Gump said: "Life is like a box of chocolates. You never know what you're going to get."
(Editing by Kazunori Takada and Ian Geoghegan)