At a time when Microsoft, Google and eBay are seeking to expand their operations in China, Yahoo agreed to the largest Internet investment ever made here when it bet $1.7 billion on the future of Alibaba.com and its founder, Mr. Ma.

Jack Ma is only 40, and he started out teaching English. But he is now called the "grandfather of the Internet in China," even though he claims not to know much more about computers than how to send and receive e-mail.

His admirers and detractors both call him a clever salesman and savvy marketer who knows how to attract foreign money. But few expected him to pull off a deal that now values his company at more than $4 billion. Yahoo said on Thursday that it would invest $1 billion in the privately held Alibaba.com, which operates not only its namesake, a business-to-business auction site that mostly purveys Chinese goods to a worldwide market, but also the consumer auction site Taobao.com, a strong rival here to eBay.

In exchange for a 40 percent stake in Alibaba, Yahoo also agreed to hand over control of its Yahoo China operations, valued at $700 million, putting great confidence in Mr. Ma and his management team.

Some bankers say it was a brilliant stroke by Mr. Ma, playing off eBay against Yahoo. Both had pursued Alibaba in recent months, according to bankers involved in the Yahoo deal.

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