Yahoo Inc said it had made significant progress with Alibaba Group on issues such as compensation for the Chinese company's transfer of a valuable Internet asset to an external owner.

Yahoo co-founder Jerry Yang and Chief Financial Officer Tim Morse flew to Asia last week to engage Alibaba and investor Softbank about the issue, though Yahoo Chief Executive Officer Carol Bartz admitted the situation was complex.

There're a lot of moving parts but we're making progress, Bartz told investors at an annual analysts' meeting on Wednesday. We're not going to get into a public back and forth.

In recent months, investor attention has been squarely focused on Yahoo's Asian assets, which include a 43 percent stake in Chinese e-commerce giant Alibaba and a 35 percent stake in Yahoo Japan Corp. Some investors believe those assets may comprise Yahoo's entire current market value.

Yahoo's shares have fallen roughly 12 percent since early May, when the company disclosed that Alibaba had transferred its popular online payment subsidiary Alipay to a separate entity, potentially diminishing the value of Yahoo's stake in Alibaba.

Bartz spent the first 45 minutes of Yahoo's analyst day flanked by Morse and Yang addressing Alipay and fielding questions from analysts.

The CEO, feeling the pressure from complaints that Yahoo was too slow in announcing the asset transfer, said its disclosure was timely and appropriate.

The trio of executives repeatedly stressed that all parties in the negotiations were agreed on basic principles, particularly to ensure that Alipay continue to be a driving force behind auctions site Taobao -- Alibaba's key strategic asset -- and that the payments system be among the first to win an operating license from the Chinese government.

Bartz also said all were agreed that the Alibaba Group -- and hence Yahoo -- receive adequate compensation for Alipay.

Alipay needs a license to be worth anything, Yang said.

On Wednesday, Yahoo's stock rose as much as 5.3 percent but later retraced its steps and was up 0.9 percent at $16.28 in early afternoon trading on Nasdaq.

(Reporting by Alexei Oreskovic and Edwin Chan; Editing by Gerald E. McCormick and Tim Dobbyn)

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