Yahoo Inc will keep a larger-than-expected stake in Alibaba Group Holding Ltd after the country's largest e-commerce company goes public, in a bid to tap into the success of the Chinese company.

According to the recently reached agreement between the two companies, Yahoo will sell 208 million of the 523.6 million shares it owns in Alibaba, either directly to the Chinese company or through the initial public offering. That is down from Yahoo's original plan to sell 261.5 million shares.

"Yahoo is confident in the long-term potential and the value of Alibaba, and we are pleased to maintain a larger stake in the company's future," said Jacqueline Reses, Yahoo's chief development officer and an Alibaba board member.