Alibaba has say in Yahoo, Microsoft talks: source (Reuters)

BEIJING (Reuters) - Alibaba Group, the Chinese Internet firm, will seek a stronger voice for its management team in Microsofts talks to acquire Yahoo, Alibabas largest shareholder, a source said on Monday.

Based on the original agreement with Yahoo, which owns 39 percent of Alibaba, the Chinese company is in a very strong position to influence how shares would be transferred to any new owner, said the source, who is close to Alibaba.

The problem is a perception by Beijing authorities that an important Chinese firm could come under the control of Microsoft Corp, which has a reputation of using monopolistic tactics, said the source, who is familiar with a team of bankers and lawyers assembled by Alibaba to review its options.

Officials at Alibaba declined to comment.

Yahoo is the Chinese companys largest single shareholder, but Alibabas management -- led by founder Jack Ma -- has retained effective control over its operations.

Microsoft on January 31 made an unsolicited offer for Yahoo -- then valued at 44.6 billion -- which Yahoos board has rejected.

Alibaba has not been involved, however, in any talks between Microsoft and Yahoo, but would get involved as negotiations get more serious, the source said.

Alibabas management is assuming the deal will eventually go through, he said.

Alibaba -- which runs Yahoos China operation as well as other Web businesses, including Alibaba.com Ltd, the countrys largest listed Internet firm -- would need assurances of management control if Microsofts bid were to succeed, he said.

Foreign control of large companies in key or strategic industries is a politically sensitive issue for Beijing, which has forced many prospective buyers to cut their intended stakes or simply delayed the application process indefinitely.

Arcelor Mittal, which had already agreed to buy 38.4 percent of Laiwu Steel Co., last year accepted a smaller stake and higher price to improve its chances of winning government approval.

Alibabas four-member board currently includes one Yahoo representative, Chief Executive Jerry Yang.

Another major shareholder in Alibaba is Japans Softbank Corp, which owns about 30 percent of the Chinese company. Softbank also partners with Yahoo in Yahoo Japan Corp.

(=7.16 yuan)

(Editing by Anne Marie Roantree)