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Jerry Yang's Lenovo Connection in China (And Let's Not Forget Alibaba Either)

Between Lenovo board and his prescient Alibaba investment, it's time to take another look at the Yahoo co-founder.

Asa Mathat

One of the more interesting factoids — if you are thinking about the upgraded role of Lenovo in the U.S. smartphone market going forward after it bought Motorola Mobility today — is that Yahoo co-founder Jerry Yang is an observer on its board.

While he does not have any voting rights as a director, apparently due to issues related to the Hong Kong stock exchange, Yang did land the now high-profile cross-cultural gig that also earns him up to $200,000 a year in cash and stock about a year ago.

And sources said he was quite involved in helping the company think through its nearly $3 billion deal to buy the Motorola handset business from Google to further diversify its offerings in the mobile arena.

Ironic, of course, given Yang also lent a hand to the search giant in the late 1990s, giving it a plum opportunity to power Yahoo search when it was in its heyday. The arrangement was one of the most important initial transactions for Google in its early formation and most definitely helped its brand become known.

Interestingly, Yang also was a key player in Yahoo making the $1 billion investment in China’s Alibaba Group, one that has appreciated to such a degree that it has proved to be a lifesaver for its current CEO Marissa Mayer — also an ex-Googler.

In an interview with me several years ago, Alibaba’s co-founder and former CEO Jack Ma said Yang’s friendship with him was critical and pointed to one particular dinner with Yang in sealing the now prescient deal.

Yahoo’s current stock has risen largely due to that transaction and its current 24 percent stake in Alibaba. It is a boost that has given the company ample air cover as it struggles to right itself (which is, as yesterday’s earnings show, a work still very much in progress).

Here, Yang deserves obvious kudos (and a big, expensive present from Mayer for making her look so good would be in order, too). As most know — and I also gave him a very hard time then — he had a tough tenure when he was Yahoo CEO from mid-2007 to early 2009, having to face down a hostile takeover attempt from Microsoft, as well as other vexing issues at the company.

Since he ended involvement with Yahoo several years ago, though, Yang has become a wide-ranging, if shy, investor. A few weeks ago at lunch in Silicon Valley, he walked me through a range of the companies he has invested in and looked about as excited and charged up as I have ever seen him in the nearly 20 years we have known each other (yes, Jerry we are old!).

He has been doing this via several investment vehicles, most especially his own Ame Cloud Ventures.

In a post I did about that last May, I called him “Jerry 2.0,” a name he — of course — grimaced at (just like I know he is grimacing now at all this attention I am giving him).

“I feel like the thing I missed the most is what really early entrepreneurs were doing,” he said at the time. “There are no LPs — just me, myself and I. I invest in things for the long term and have a long horizon and the flexibility.”

Ame means rain (雨) in Japanese and happens to be the acronym of the names of his wife and kids. At the time and also again recently, he said he was very interested in activity around mobility, sensors, cloud and big data that is enabling the next generation of computing.

Among his investments is Tomfoolery, which is aimed at improving mobile enterprise apps and which, drum roll, Yahoo is buying. He also has invested in small satellite maker Planet Labs and body-tech startup Lumo.

In addition, Yang also works closely with another former Yahoo, Ash Patel — who started the $10 million micro-venture fund Morado Ventures, which means “purple” in Spanish, and has a lot of ex-Yahoos as investors — as well as individual angel and former Yahoo CTO Farzad Nazem.

Yang has also remained active in Asia. The Taiwan-born entrepreneur is very active in the region and considered quite a superstar there.

As I previously noted, to select from the companies he mulls, Yang has only one young associate, Nick Adams, who codes, helps on deal mechanics, interacts with entrepreneurs and also has had extensive experience in Asia.

That has been important, since Adams also leads business development for China’s Cloud Valley, which is run by Edward Tian, one of Yang’s strategic partners in that country. It was with Cloud Valley that Evernote, the hot productivity app in which Yang is also an investor, partnered to create a business there.

Yang has also served as a director of China’s Alibaba and also Yahoo Japan, although he left both boards in 2012.

But he has also had some trouble related to China, most especially in taking the heat in a difficult Congressional hearing in 2007 concerning a controversial move that Yahoo China made there in handing over information about a journalist Shi Tao to authorities. Tao was then jailed in 2004.

At the time of his appointment to the Lenovo board, its CEO, Yang Yuanqing, said: “Jerry’s appointment as an observer to our board furthers Lenovo’s reputation as a transparent international company … As Lenovo continues to build on its momentum and establish itself as a global technology leader, Jerry’s perspective, experience and proven entrepreneurial spirit will help us continue to drive growth and expand our business.”

Lenovo has tried to diversify its board in recent years to make it different from others in China by pushing transparency, which will surely help with any regulatory issues in getting approval of the Motorola deal.

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