ve traded barbs over the action, have taken steps to resolve the dispute, although no solution has been put forward publicly. Yahoo shares, which have dropped 12% since it disclosed Alibaba had transferred ownership of Alipay, recently rose seven cents to $16.21. Yahoo Chief Executive Carol Bartz, co-founder Jerry Yang and Chief Financial Officer Timothy Morse kicked off Yahoo's investor day Wednesday with a conversation about the Alipay incident, saying Yahoo, Alibaba and Japan's Softbank Corp. (9984.TO), which also owns a large stake in Alibaba, are making "significant progress" in resolving the problem. Bartz also stood by Yahoo's approach to the huge Chinese market. "The core strategy of investing in Alibaba Group has clearly been the right way to invest in the China market," she said. Bartz said the companies have agreed that the value of the relationship between Alipay and Alibaba's online retail marketplace, Taobao, must be preserved within Taobao. They also agreed that Alibaba must be "appropriately compensated" for the value of the Alipay business that isn't linked to Taobao, she said. "All parties are working very hard to come to a resolution that successfully implements these principles," Bartz said. "Alibaba's management is very committed and cooperative in working with Yahoo and Softbank." She added that Yahoo's disclosure about Alipay was "timely and appropriate." She said negotiations between the companies will be kept private and noted Yang and Morse traveled to Asia last week to talk with Alibaba and Softbank. Yahoo has faced criticism for not disclosing the transfer earlier. The company has said it became aware of the change by the end of March, something Alibaba has disputed. Yang said Wednesday that Alipay was transferred to Chinese ownership to make sure it is among the first wave of companies licensed by China to be online-payments companies. "For the past few years, it was not clear what direct or indirect foreign ownership would be allowed" by Chinese authorities, Yang said. "Recently we have come to believe the first wave of licenses will go only to Chinese owned, domestic online payment companies...It's critical for Alipay to participate in the first wave of licenses." Meanwhile, Morse said Yahoo will stop including Alipay in the company's financial statements, noting the value of the non-Taobao Alipay business has been "extremely immaterial" to results. With Yahoo's other Asian asset, Yahoo Japan, Chief Financial Officer Tim Morse said beyond a sale, the company is weighing a tracking stock or traditional spin-off, noting that the interest in both options are high. "We're working hard to unlock the value at Yahoo Japan," he said. Yahoo has been restructuring itself, though the strategy has yet to yield convincing results. A major part of Yahoo's turnaround plan--a search deal with Microsoft Corp. (MSFT)--went into full force in October, but Yahoo is still struggling to turn around its co