The Tao of Yahoo!

Hongyi, who once he joined Yahoo! vowed that his mission was to kick Google's butt in China, denied rumors earlier this year that he planned to resign to spend more time with his family. Last month, however, he did announce he would step down on Aug. 31. Yang, who applauded Hongyi's contribution to Yahoo! China, said the purchase of Alibaba had nothing to do with his resignation.

Yahoo's seemingly capricious entry into China follows its mixed success in Japan. Yahoo! Japan displaced eBay as the premier online-auction site in Japan, but that joint venture has long been majority owned by Japanese venture capital firm Softbank.

Softbank held a significant but undisclosed stake in Alibaba, but Yang said that stake would be smaller than Yahoo!'s after its $1 billion investment in the company.

"We'll be the largest shareholder and Softbank will be a significant shareholder," Yang said. "Yahoo! will be the biggest shareholder, and Yahoo! and Alibaba will work with each other, but this is a company built and led by Mr. Ma."