Alibaba: The House That Jack Ma Built pdfdrive com

partners at the bank could calculate how much they personally had forgone.
Some calculated their missed windfall at more than $400 million, quite a few
mansions in the Hamptons.
Along with SoftBank, other investors committing fresh funding to Alibaba
included Fidelity Investments, Venture TDF, and new investor Granite Global
Ventures (later known as GGV Capital), backed by Rockefeller affiliate
Venrock. The deal was announced as part of a move to “aggressively expand”
Taobao to make it the “most popular online marketplace for Chinese retailers
and individuals to list their products on the Internet.”
Masayoshi Son publicly endorsed Alibaba’s strategy. Four years after
SoftBank’s initial investment in Alibaba, he declared himself “extremely
pleased” and predicted that “Alibaba has the potential to become another
extraordinary success like Yahoo.” Meanwhile, Alibaba disclosed that revenues
from its Alibaba.com B2B site had grown threefold in the previous year,
propelling that business at last to profitability.
Despite the fresh backing for Taobao, eBay itself remained oblivious to the
rising threat, considering itself far superior to this quirky, local rival. When
asked by 
BusinessWeek
in the spring of 2004 about rivals in China, eBay’s
senior vice president Bill Cobb mentioned only one: 1Pai, a joint venture
between Yahoo and Sina.
Jack reveled in being ignored. “During the first year, eBay didn’t consider
us their rival. They didn’t even think that we could be their rival. They thought,
We haven’t even heard about Alibaba. Such a strange name. Chinese all know
what 
tao bao
means, foreigners don’t.”

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eBay was confident that its global network and experience would ensure
EachNet pulled well clear of any competitors. But corporate bureaucracy,
worsened by the extended and dysfunctional reporting lines all the way to San
Jose, were to smother whatever embers of entrepreneurialism still burned within
EachNet in Shanghai. eBay’s China adventure, lasting from 2003 to 2006, is
today a case study in how not to go about managing a business in a distant
market.
eBay’s first big mistake was to tell the market that China was already an
ace in the hole. Meg Whitman deserves credit for recognizing China’s potential
as an Internet market before that was popular. Her early interest in business
opportunities in China was sparked by a family connection to the country: “In
the 1970s my mom was invited to be part of group of women, led by actress
Shirley MacLaine, to visit China. There were lots of reasons not to go: China
was then an undeveloped country that had been closed to outsiders for many
years. And my mom had just ten days to get ready. But instead of worrying
about her safety, she seized the chance to have an adventure. Over four weeks,
the group covered two thousand miles in China, mostly by train, visiting schools,
farms, and villages.”
Whitman recalled that the trip “changed my mother’s life and, indirectly,
mine, too. My mom learned Mandarin in subsequent years and returned to China
eighty times. And after her first trip, she told my sister and me, ‘I’ve seen
women doing all sorts of marvelous things—so realize you have the opportunity
to do and be anything you want.’”
Mary Meeker, then an Internet analyst at Morgan Stanley, where she was
dubbed the “Queen of the Internet,”
21
was one of Meg Whitman’s lead
cheerleaders. The dot-com bust had dented the reputation of nearly the entire
Wall Street tech research community, but China played a big role in Meeker’s
redemption. In April 2004, Morgan Stanley released a 217-page report under her
name that profiled the Chinese Internet sector. It would be reprinted more than
twenty-five thousand times. Meeker had a reputation for being a contrarian:
“One of the greatest investments of our lifetime has been New York City real
estate,” she said, “and investors made the highest returns when they bought stuff
during the 1970s and 1980s when people were getting mugged. . . . The lesson is
that you make the most money when you buy stuff that’s out of consensus.”