http://online.wsj.com/article/SB10001424052748704071304576160103780079110.html?mod=WSJ_Tech_LEFTTopNews

I am not going to pretend I know what is going on with Alibaba.com. However, having been through so many restructuring and turnaround situations, I will say this: it all boils down to regaining consumer confidence and credibility.

Fraud is a serious concern for not only the company but also for the customers. Fraud is one of those all-encompassing terms that can damage a company to the point of destruction. Analysts are confident the company will survive and emerge better and stronger. My advice to Mr. Ma is get a competent and large outside professional services firm to give you a stamp of approval; assuming you pass their acid tests.

Why do I think Mr. Ma should get outsiders to come in? The answer is: confidence and credibility. I applaud Mr. Ma’s quick action and his assumption of responsibility. However, Mr. Ma needs to understand this all happened on his watch. Therefore if you want to show the world you have everything under control and are taking rapid corrective action get someone who has no bone to lose in the game to review what went wrong and recommend what should be done to fix Alibaba.com.

Once a company is painted with a brush of fraud, it is usually in deep trouble. The troubled company needs to regain consumer confidence and credibility with consumers and investors. The companies and executives accused of fraud often do not understand that not a soul will believe in their innocence unless an outside party says they are innocent. “Innocent until proven guilty is not the case with fraud”. Once accused of fraud, companies are in the unfortunate position of being perceived as guilty.

The resignation of Messrs. Wei and Lee were appropriate and quick. Now what?

Even if you develop a set of actions to clean up the company and correct all points of failure, shareholders will likely not trust the company because the actions were not reviewed by an outside party.

Stock analysts will not be trusted by anyone; their job is to promote the company’s stock. Besides that, no stock analyst will actually say the company has done all of the right things to get back on track; they will refer to someone else’s review. Stock analysts are not stupid.

If Mr. Ma, can withstand the criticism and outside scrutiny, he should get a very large audit, restructuring, and turnaround firm to evaluate the situation and make recommendations. By the way, Mr. Ma – do not let ego get in the way; consumers and investors have a right to question Alibaba’s credibility and yours as well.