Jack Ma eyes acquisitions to weave his magic again

Marissa Mayer, Yahoo CEO. Yahoo is laying off about 1,700 employees and shedding some of its excess baggage in a shake-up likely to determine whether CEO Marissa Mayer can save her own job.

He says you have only got to look at Yahoo, which paradoxically still owns a 15 percent stake in Alibaba despite recent attempts to spin it off. The company was the leading search engine when the Internet took off in the 1990s but was largely swept aside by Google after it came on the scene in 1998.

"Perhaps the same thing might happen to some of these first wave Chinese companies like Alibaba. It might not have a big future at all. How many companies are able to maintain their leadership position over many decades? Certainly, very few Western companies have been able to do this," he says.

"We weren't talking about Alibaba 10 years ago and we might not be talking about Alibaba in a decade's time either. It may just be a temporary phenomenon."

But Towson thinks any doomsday scenario for Alibaba is unlikely.

"I think it has such a powerful competitive advantage with its e-commerce business. The economics of c2c (consumer-to-consumer) and b2c (business-to-consumer commerce) tend to naturally lead to one or two dominant players, like eBay and Amazon in the US. Yahoo never had such competitive protections in its business."

Qui at Guanghua says many people who pass judgment on Alibaba misunderstand the challenges it faces in what is a very unique China market. "The China market is way bigger than that of the US and it is also very diversified. You have people from rural areas who are very price sensitive and you also have those from the post-1990s generation who are looking for customized products," he says.

"It would be a difficult challenge for any company to serve so many needs."