Alibaba Group said today it is reorganising Taobao, China's largest e-commerce website, into three separate companies, precluding any chance of a Taobao public offer.
The split move comes as Jack Ma, Alibaba Group founder engages its major shareholders, Yahoo Inc and Japan's Softbank, over ownership of Alipay, another of the group's prized assets.
Taobao accounted for 70 per cent of all online sales transactions in China in the first quarter of the year and has been valued by Goldman Sachs at about $7 billion.
The split would take effect from today as three separate companies, namely its product search engine eTao, business-to-consumer website Taobao Mall and consumer-to-consumer website Taobao.com come into existence.
"We believe that reorganising Taobao into smaller companies will create more value for the whole industry, and therefore, more value to our company and shareholders," Ma said in a letter to employees.
He also said he did not rule out the possibility of Alibaba Group going public in the future to reward employees and shareholders.