S&P: Yahoo! unaffected

Standard & Poor's said that its rating and outlook on Yahoo! Inc. are not affected by the company's definitive agreement to acquire a 40% stake (with 35% voting rights) in China-based e-commerce company Alibaba.com.

Under the agreement, Yahoo! will contribute its Yahoo! China business and $1 billion in cash to the privately held Alibaba.com in exchange for the stake. The considerations suggest a very high growth expectation for Alibaba.com.

S&P said it believes the transaction will significantly improve Alibaba.com's competitive position and increase Yahoo!'s prospects in the country in the long run. The rating on Yahoo! incorporates the potential for significant acquisitions, and the company's strong liquidity and discretionary cash flow.

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