Doug Young

Opinion | Jack Ma yields for new Alibaba top manager

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Jack Ma's stepping down as CEO of Alibaba is designed to make way for a more management-focused successor as the company prepares for its mega-IPO by 2015

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Jack Ma says he will hand over the CEO title of Alibaba to a successor by May 10. Photo: Xinhua

Doug Young

Published: 5:39pm, 16 Jan 2013

It seems like nothing happens at e-commerce giant Alibaba these days that isn't interpreted in terms of its implications for the company's upcoming mega-IPO, and the latest announcement that founder Jack Ma will step down from his CEO position isn't any different. From my perspective, this kind of move was almost inevitable, and should be a good one for Alibaba in the run-up to what is likely to be China's biggest-ever IPO for an Internet company sometime between this year and 2015. After all, Ma has always been a very strong salesman and a "big picture" guy. It's become increasingly clear that he wants to focus on the strategic direction of his company rather than day-to-day managerial issues that have become increasingly important as Alibaba grows in size and complexity.

Ma announced his intent in a very open way, sending out an email to employees saying he would hand over the CEO title of the company he founded to a successor by May 10, as part of a broader transition to a younger generation of new leaders. Not surprisingly, Ma will retain the role of executive chairman, meaning he won't be leaving Alibaba anytime soon and will continue to make all the major decisions.

In many ways, the move looks similar to what Google (Nasdaq: GOOG) co-founders Sergey Brin and Larry Page did in 2001 when they brought in Eric Schmidt, a seasoned manager, to head their company. Since then, Page has come back to return to the CEO position at Google, but Schmidt remains firmly in charge of the company's as its executive chairman.

Ma's move to the chairman's post comes after a busy period for him, which most recently included a couple of major restructurings to try and make the company more manageable. Under the latest of those completed earlier this month, Alibaba was reorganized into 25 business units, each headed by a president or general business manager.

That restructuring reflected the fact that Alibaba has come a long way from its roots as an online marketplace for small businesses to buy and sell their goods. The company now encompasses a wide range of business areas, ranging from its core C2C, B2C and B2B online marketplaces, to electronic payments and other financial services, to cloud and mobile computing.

I always got the sense that Ma was interested in the big decision-making processes that led to the creation of many of those units, but was less interested in overseeing their day-to-day operations and development. Presumably the new CEO will be more involved with that kind of daily management duty, as well as making sure the company's many business units work well together to achieve synergies and take advantage of each others' strengths.