Last Friday, Microsoft offered to by Yahoo! for US$44.6 billion.

Many articles say it is an effort to strengthen their battle against rival Google; however, there are many other underlying advantages to this transaction. One includes Alibaba Group and its ability to help Microsoft in China through its many, well positioned businesses in the Mainland.

As you know, Yahoo! owns 40% of Alibaba Group as well as a portion of the Hong Kong listed Alibaba.com.

Food for thought is if the transaction is successful and Microsoft follows Yahoo! in turning over their China assets for Alibaba Group to manage. This would make the powerful Alibaba Group even moreso with:-

1. combined Yahoo! China and MSN search
2. combined Alibaba Trade Manager and Windows Messenger
3. web-based mail Hotmail
4. software sales (download/web-based) through Alisoft and Alibaba Group’s databases of millions of SME’s throughout the Mainland.

Read more here.