Alibaba Bid for Yahoo! Heats Up M&A Race

Speculation is mounting that Alibaba Group founder Jack Ma is going to make a bid for Yahoo! Inc. (NASDAQ:YHOO), on news that Ma has retained lobbying firm Duberstein Group, Inc. to help it navigate regulatory and legal issues surrounding the Chinese companies efforts to acquire Yahoo!

Yahoo!’s shares have been under pressure over the past year, as competition from Google (NASDAQ:GOOG) and Microsoft’s (NASDAQ:MSFT) Bing search engine — as well as increased interest in social media companies such as Facebook, Pandora (NYSE:P), and Zynga (NASDAQ:ZNGA) — have made many investors move past the company.  The shares have traded in a 52-week range of $11.09 to $18.84, and recently traded at $16.02.  This is a far cry from its all-time high price of more than $100 per share (split-adjusted) during the dot-com bubble of the late 1990s.

A number of institutional investors have turned bearish on Yahoo’s stock.  Following are some of the largest net sellers of the stock in the quarter ending September 30th, 2011: Capital World Investors disposed of 20,478,783 shares, bringing its total position to 65,058,477; Northern Trust Corp. reduced its stake by 13,740,654 shares to 13,784,026 shares, and Capital Research Global Investors reduced its position by 11,881,200 shares to 84,641,420 shares.

Yahoo!’s competitors include: Google, Inc. (NASDAQ:GOOG), AOL, Inc. (NYSE:AOL), IAC/InterActiveCorp. (NASDAQ:IACI), and News Corp. (NASDAQ:NWSA).

To contact the reporter on this story: Dave Friedman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com