The investment gave Yahoo about a 40 percent stake in the Chinese company. Alibaba officials have said they believe that a Microsoft takeover of Yahoo would set in motion a buyback provision, making it possible for them to gain independence from Microsoft. (ooh, I can see Ballmer loosing it) Execs of both companies - Microsoft and Yahoo - declined to comment on the possible effect of the new Chinese law. In rejecting Microsoft's takeover bid in January, Yahoo's chief executive, Jerry Yang, said in a letter to employees that the offer substantially undervalued the company, in part because of the significant growth potential of the Alibaba business in China. Even if the Chinese government did not try to prevent a takeover by Microsoft, a prolonged review could substantially damage the value of the business, a number of Internet industry executives said.