Usman Latif (Techuser) has a fascinating take on what’s going on with Google and China. I can’t guess if he’s right or not, but we’ll know in due course. If what he suggests is true, Google will exit China by selling it’s Chinese business to the Alibaba Group.
In 2005, Techuser uncovered the strange nature of Google’s 2004 patent settlement with Yahoo. The terms of that deal have never been revealed, but what was revealed in various SEC filings leading up to Google's IPO appears to have been, at least, obscure and misleading. Usman’s point now is that 2004 deal included some substantial, probably very substantial, undisclosed obligations, perhaps due at the end of an unknown grace period. So Google may need a way to make a big payoff to Yahoo without letting anyone understand the details of their patent settlement. Turning over their rapidly growing Chinese business to Alibaba (40% owned by Yahoo) might be their answer.
Yes, it reads like a “conspiracy theory,” but Usman is a smart guy and, in any event, we soon know if he’s right or off track.