|Alibaba aquires Yahoo China|
... or is it the other way around?
Press Release [news.xinhuanet.com]
In a move that will surely shake up the Search Industry in China, Alibaba has acquired the complete Yahoo China package, including Websites, Search Technology and Advertising business.
Alibaba have received exposure here as arguably the top online payment system rivalling ebay and paypal, and in fact this thread [webmasterworld.com] discusses Yahoo's intention to acquire part of Alibaba, but it seems the reverse may have happened, at least on the surface of things. Reports from Our Man in China (Shak) though suggest that the deal is quite compilcated with Yahoo ending up with the 40% stake in Alibaba as discussed earlier.
I have to wonder though at Yahoo apparently relinquishing control of its brand in China, a move that in my opinion may yet have a sting in the tail. Regardless, this will surely be setting the Cats amongst the Pigeons, you know the ones I mean, those whats does that Ranking Thingy. ;)
Now this is interesting. :)
Historically Yahoo has done quite well in Japan (which until very recently was considered Asia's biggest Internet market) with this sort of strategy. Yahoo only held a minor stake in Yahoo Japan with the local SoftBank holding the majority of shares. The resulting synergy of allowing a local company to take the reins has resulted in Yahoo Japan taking the top market share, far ahead of Google.
Will history repeat itself again in China? It looks like they're moving to kick-start things in that direction. Unfortunately Yahoo/Alibaba are coming from behind here. They still have to unseat Baidu. What's the consensus from our members in China?
I think this arrangement comes from the fact that Yahoo can't manage their business in China under the same rules of the game in Europe and the US. The case where Yahoo felt they were compelled to turn over the name of the email user to China's government is just one example, but a very good one.
This way Yahoo can say to the rest of the world, "This is not that," or "We are not them."
But, as the author of this thread wisely noted, it's complicated.
|Yahoo can't manage their business in China under the same rules of the game in Europe and the US. |
IMHO, I don't think it's due to political reason, but rather bussiness strategy. In serveral years ago Yahoo bought a local company 3721 as their based local branch in China. 3721 had very successful story in early year due to it's toolbar. They had local team and they knew the policy in China. But late since 3721 took spyware technique many chinese customers hate it and yahoo gradually lost market. IMO, Yahoo exchange the whole yahoo China package with 40% stake in Alibaba in order to get more profit from Alipay - a payment system like paypal.
From the born, 3721 toolbar had been a spyware, until recent, Microsoft listed the 3721 software in Rascal spyware list. Then Yahoo renames it as Yahoo Toolbar or Yahoo Assistant.
In Sept. 23, HangZhou, Yahoo-Alibaba Conference, Mr. Mayun said, "We wont do monoplay. We wont spell them out, and we do will give Taiwan as a space to make ling for ebay."
"Yes, we Taobao provide auction service for free. One day, if we fell unpleasant, We would try providing free service in US, to make ebay US uneasy."
"Now Alibaba-Yahoo run seven companies in same time, in future 3~4 years, we mast merge them to 3 or 4 companies, this is the critical task. "
Firms in under control of Alibaba-Yahoo have service crossing.
hmm..this IS interesting.
wonder if that has any implications (as in setting the stage) for other countries in Asia.
Yahoo Korea is having a tough time nowadays here, so they either have to buy someone ELSE to get them back in the game or maybe viceversa. someone could buy them to give a much needed boost and perhaps "rebranding".
There are no alibabas here to speak of...but who knows?
What are the "seven" busienss alibaba runs? and which 3-4 would they be looing to colidate into?
Some more developing news about this merger:
|Reuters article [in.today.reuters.com] |
Alibaba expects to add 400 to 500 engineers to the 100 it inherited in the Yahoo deal announced in August, Chief Executive Jack Ma told Reuters on Wednesday. ...
It now aims to more than double its value to $10 billion by 2009 from a current $4.2 billion, he said in an interview.
"We want Yahoo China to be a local company."
As I mentioned earlier (and is mentioned in the article), this looks very similar to the Yahoo Japan development which was so successful.
Some more feisty talk from Jack Ma as Alibaba vows to beat Google [news.yahoo.com]. He says he had already defeated e-commerce rival e-Bay and will now set his sites on Google.
Aside from all the posturing there is an interesting tidbit at the end of the article:
|Alibaba.com plans to expand in South Korea in the next two to three years, and later the Japanese market. While it also plans to boost its presence in Europe, its focus would remain in China and Asia. |
A public listing for the company may only happen in three to five years, Ma said, adding that any decision on the matter must be taken for very good reasons.
Ma forecast China will become the "number one Internet country" in the world in five years.