Jack Ma, the chief executive of Alibaba, is "very, very interested" in buying Yahoo, the Chinese e-commerce company's largest shareholder, he told an internet conference on Friday.
Although the US search company is not officially for sale, Alibaba has first right of refusal to buy back the 40 per cent Yahoo has in Alibaba, if the US company should change hands.
China's largest online retailer has had a troubled relationship with Yahoo, most recently fighting over the transfer of Alipay, its online payment service, out of Yahoo's ownership.
So not only would buying Yahoo rid Ma of a troublesome shareholder, it could also open up the United States as a market for Alibaba.
The company could then rival eBay, but with a distinct advantage -- direct (and therefore cheaper) access to suppliers in China. This is already happening on its Chinese site; last month, the company said that Aliexpress, a wholesale site which sells small quantities of Chinese products, was now also being used by international consumers.
While Alibaba is not a direct rival to Yahoo, any international expansion could run into a non-compete clause that the company signed as part of the original deal. Buying Yahoo, would, of course, make this clause null and void.
However, buying Yahoo would not be all plain sailing. First, Ma would have to raise a hefty sum of cash -- Yahoo has a market capitalisation of $16.6bn, compared with the privately-owned Alibaba group with cash on hand of about $1.5bn, according to Tech Rice, the Chinese tech blog.
Secondly, the company could also face political challenges in the US where privacy campaigners have already said there could be significant privacy risks if data of Americans comes under the control of a Chinese company.
Even though Alibaba is not state-owned, any deal in the sensitive internet sector could be controversial as China is accused of conducting cyber-espionage and of snooping on internet users.
Not so serious?
But Ma may not even be serious about a deal and could instead be bidding up the price to stop another potential buyer, said Muzhi Li, a Hong Kong-based analyst at Mizuho Securities.
"His intention is to see Yahoo maintain current status quo, rather than bought by any one, especially him. He doesn't have the money, and he is not likely to get any money [to buy] Yahoo," Li told FT Tilt.
Yahoo shares have lost 21.4 per cent this year, and so it could be trading at an attractive price for potential bidders.