Alibaba's stake lifts Yahoo profits

Yahoo! Inc. gained a US$401 million profit in the first quarter via its stake in the Chinese company Alibaba.com<1688>, and its net income reached US$542 million, sources reported.

Yahoo inked a deal with Alibaba in August 2005 to buy 40% of Alibaba.com for US$1 billion in cash while handing over the running of its China operations to the Chinese online retailer.

Under the deal, Yahoo has 35% voting right in Alibaba, and in turn, Yahoo! China is managed by Alibaba.

Alibaba, founded in 1999 and headquartered in the eastern China city of Hangzhou, is an online marketplace for international and domestic China trade. The company is among a clutch of fast-growing Chinese Internet startups.