Alibaba has a new CEO, but it's still Jack's house

Fri May 8, 2015 7:11am EDT
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By John Ruwitch

SHANGHAI (Reuters) - When Alibaba Group Holding Ltd's (BABA.N: Quote) eccentric founder Jack Ma stepped down as CEO two years ago, he declared "the Internet belongs to young people," and promised that most of the company's leaders born in the 1960s would soon retreat from management.

On Thursday, that transition at the e-commerce behemoth appeared complete as Ma trumpeted the appointment of a fresh chief executive, Daniel Zhang, born in 1972, as part of a broader reshuffle.

Yet as the eight-year Alibaba veteran and current chief operating officer moves into the corner office, the firm remains as much Jack Ma's company as it was when it was founded in his apartment 16 years ago.

Ma exerts an outsize influence on the company, holding the title of executive chairman and controlling a 6.26 percent stake as of end-2014, worth about $13.4 billion at Thursday's closing price of $86 a share.

"No matter who the CEO is, Jack Ma still has ultimate control of the company," said Henry Guo, an analyst at Summit Research.

If Ma is the visionary, Zhang's job will be to deliver results quickly, especially as mobile commerce explodes. The company reported on Thursday that mobile transaction value in the March quarter accounted for more than 50 percent of the total for the first time.

For his part, Zhang brings a strong reputation to the job.

He was a "key architect", the company said, of the hugely successful "Double 11" shopping festival - also known as Singles Day, the Nov. 11 event that has overtaken Black Friday in the United States as the world's largest online shopping event - and he helped get the Amazon-like Tmall platform off the ground.   Continued...

Alibaba Group Holding Ltd chairman Jack Ma gestures during a talk by Our Hong Kong Foundation in Hong Kong, February 2, 2015. REUTERS/Bobby Yip