Maureen O'Gara

Alibaba is interested in buying Yahoo, which owns 43% of the big closely held Chinese Internet house.

Alibaba chairman Jack Ma, who plans to spend the next year in the states, was refreshingly blunt about his interest last Friday at a China 2.0 event at Stanford University where he said, "We are very interested in Yahoo because our Alibaba Group is so important to Yahoo, and Yahoo is also very important to us." He made it clear he was interested in all of Yahoo.

Apparently, however, there are unidentified "political issues." Presumably that means the US government, and perhaps the Committee on Foreign Investment in United States (CIFUS), is worried about Beijing, its treatment of personal data, its censorship and its hacking. Then there's the little matter of Alibaba transferring Alipay, China's popular online-payment service, to a Chinese company controlled by Ma without asking Yahoo. Under a recent deal with Yahoo, Alibaba will get at least $2 billion if Alipay IPOs.

Yahoo, meanwhile, is sorta kinda looking for a replacement for ousted CEO Carol Bartz while reviewing its strategic options, a process that could take months, Yahoo said.

One of those options is - or was - to sell out to private-equity house Silver Lake, which would sell off Yahoo's Asian assets (Alibaba has dibs on Yahoo's position in Alibaba) and then either fix or sell the main operation. Silver Lake also owns a piece of Alibaba and may be one of the private-equity firms that reportedly approached Alibaba about a Yahoo acquisition.

Yahoo currently has a market value of around $17 billion. It's unclear what Alibaba's financial resources are. It was valued at about $32 billion by its latest investors.

Stifel Nicolaus thinks Microsoft, Softbank and Silver Lake could put money in Alibaba to push a deal through.

Yahoo founder Jerry Yang and chairman Roy Bostock foolishly turned down a $47.5 billion acquisition offer from Microsoft a few years ago.