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Yahoo invests $1bn in Alibaba.com



7:30 am on Aug 11, 2005 (gmt 0)

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Continued from:

Business Week Story [businessweek.com]

seems to be a lot of investment in china by a lot of companies - must be some big money to be made out there .........

[edited by: Brett_Tabke at 1:04 pm (utc) on Aug. 16, 2005]
[edit reason] shortened side scrolling url [/edit]


4:51 pm on Aug 11, 2005 (gmt 0)

They could have had 100 other smaller companies for that cash.

Just shows that all the webmasters out there that have/are wacking up sites, won't get interest from the big boys, unless their damn good! Stick up a site and hope doesn't work.


5:03 pm on Aug 11, 2005 (gmt 0)

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111,050,034,000 yen. That's a lot of yen.


5:21 pm on Aug 11, 2005 (gmt 0)

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Some reasons for caution, in case you're thinking of doing the same.

1. China's economy is growing quickly, but keep things in perspective. In GNP terms the Chinese economy is the size of Italy's, and 1/7th the size of the US economy.
2. The Chinese economy is not growing quickly for the same reason that a western economy would. The country is *modernizing*, and when you start from a low baseline, you grow quickly. Most of the growth will not be in online widget purchases.
3. The Dot-Com boom was, in part, built upon the idea of "first mover advantage," that the first companies with an internet presence would possess an insurmountable advantage over late-comers—that Toys R Us and CVS could never catch up with eToys and Drugstore.com. Although some early internet pioneers have had staying power—Amazon, for example—the idea has been largely disproved. A company that jumps into the Chinese market in ten years will not be overly disadvantaged by late entry, and will have the opportunity to learn from previous mistakes.
4. "Independent Webmasters" face considerable barriers dealing with China. A large company willing to establish a Chinese presence can navigate the legal field in ways an independent webmaster cannot.


5:29 pm on Aug 11, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

But also keep in mind that China has the fastest growing economy in the world. Look at who is investing and why.

Check what Peter Norton (norton utilities) is doing.

And China will be introducing several lines of vehicles in the states starting in 2007. They will be fully loaded vehicles with a target price of 7000 (currently estimated).

China seems to be getting very agressive in claiming a foothold in the world's marketplace.


5:44 pm on Aug 11, 2005 (gmt 0)

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Won`t be to easy for Yahoo experts. Chinese culture and business mentalities are much much different.

But certainly a good move and helping China to become more a part of the global culture.

Guys at alibaba are also very capable so chances look good.


6:12 pm on Aug 11, 2005 (gmt 0)

>> Won`t be to easy for Yahoo experts. Chinese culture and business mentalities are much much different.

that's why they are buying an existing company already. Very smart move


6:42 pm on Aug 11, 2005 (gmt 0)

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Has anyone here ever been a member at Alibaba?

I have, about 3-4 years ago I was a registered user, with a basic free account, and I had a company profile there for my wholesale business (which I don't own any more).

I see today it says they have over 1 million posted, but in checking my old trade, I see NONE of the USA major players are listed there. Given those same major players are marketing heavily on the web, it leads to me to believe they tried it, as I did, and learned the hard way.

It was the single worst mistake of my career. I won't go into the details of it, but suffice it to say the name of the site, I found very appropriate, as it relates to a fairytale. It summarizes my experience there, one that nearly drove me out of business. What a nightmare that was.

Everytime I see it in serps or at Alexa, I just shake my head. Often, when I think about why they chose the name, I think, "Hey, you can't blame them. They were upfront with it in the site name." The name is loaded with subliminal messaging, that played out for me. (what was I thinking?)

Because of that, frankly, I'm surprised that Yahoo is having anything to do with them. I wouldn't link to that site for all the gold Ali Baba stole from the Forty Thieves in the fairytale. Talk about your linking 'bad neighborhoods'. Longevity and PR are not everything. It goes well beyond that when you consider 'neighborhoods'.

In my experience, it is a cesspool. Maybe not in registered users, but certainly in visitors. It draws the plagues of society, in high percentages.

It could very well be, that it draws those kind of visitors, just because of the name, and the aura of deceit the name has. Y might want to think about that brand, and do a clean up.

Yes, they are a competitor, more or less, but trust me, not significant inspite of their traffic. We are looking for a different type of traffic. I'm making no secret of that. But, that has nothing at all to do with this comment. Anyone who thinks I'm full of it, go ahead and create an account and profile there. Certainly, don't take my word for it.

There is no substitution for first hand experience. Give it 90 days and then come back to this thread and post your experience. I don't think you will need 90 days. It only took me a few days to get flooded with frauds. If you have an online shopping cart, you might want to forget my challenge. I don't wish that mess on my worst enemy.

I do have to hand it to them. The site looks nice, and they have the traffic. But, in my opinion it stops there. As I see it, the only thing that site is good for is the high traffic, for displaying international CPM ads, which at this time, they don't have.

Maybe that is where Yahoo is going with it. They are listed #36 on the web for traffic. But, in the past year, their traffic has plunged with every major Google update. There is some room for G-tinkering there, for sure.

I really don't know what Yahoo was thinking. Are they really grasping at any straws now for traffic and share of market?

Gee. What am I saying. This is the same company that has the absolute worst 'groups' area of any 'family oriented' website, to be found in all my etravels. I've seen things there, in abundance, that still just amaze me, right down to open ---------(illegal perverted activity), in an 'adult' area, that is accessible without a credit card. (stumbled on it myself researching the online activites of an aquaintance for his wife. Complaints to yahoo at that point, were unresponsive as far as any action taken)

I guess it just shows that there is always more to be harvested from the bottom of the barrel.


7:16 pm on Aug 11, 2005 (gmt 0)

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huge money!


7:44 pm on Aug 11, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

I don't know anything about Alibaba, but as they say; you don't need a weatherman to tell which way the wind blows.

e-commerce in China will be huge, not if, just a matter of when, and generally speaking the folks who get in on things early do the best.

(now where was that Chinese dictionary of mine?)

travelin cat

8:20 pm on Aug 11, 2005 (gmt 0)

WebmasterWorld Administrator travelin_cat is a WebmasterWorld Top Contributor of All Time 10+ Year Member

And they only bought 40%!


8:51 pm on Aug 11, 2005 (gmt 0)

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Janet, can't comment on your experience but I know a whole lot of folks who have used alibaba to source stuff from china and have found it to be very helpful and more importantly profitable......

In reality though I don't think yahoo has a huge interest in alibaba but instead are much more interested in taobao.com the online auction site as well as management's experince of operating sites in China. It seems like a way for them to get an insider's perspective and know how, without getting their hands dirty.....

probably a very smart move considering their current position. Although I will say something tells me they are over paying considering how hot china is.....


10:25 pm on Aug 11, 2005 (gmt 0)

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I agree, as an American, seeking trading partners, it would be a valuable tool. But, certainly not for the average joe. They are shark infested waters, to say the least. But, any buyer, who is web savy, should be able to cull through the mass, and find some good trades.

The problem I found is trying to locate trading partners, by posting your company profile and offering goods or services for trade. I don't advise that, at all. You have too little control over the results, from that angle.

Some of this has to do with my view on sales. I would never buy from a door to door salesman. I feel like if the potential customer is in the market for something, he will come to you. You make your product and store available, let them know where you are, and they service them when they come in. You don't hunt them down and stuff the product down their throat. Yes, I know that is a very successful sales method, but I don't like it.

When I am shopping, if the sales person approaches me, I am turned off. I might leave the store. If he does it a second time, I WILL leave the store. I want them available, stocking merchandise, straightening shelves, smiling politely and saying 'hello', there if I need to ask something. It is one reason we don't do mailing lists, or email marketing. It is too pushy.

As a shopper, I like to be in the driver's seat, controlling every step of the transaction. I quietly browse sites, late at night, and if I am interested, I contact them. If not, I click on to the next site.

When people come to my site and try to sell me something or tell me about their company without using my proper procedure for it, I delete the email unread. I don't want to be contacted and have things pushed on me. I got alot of that from Alibaba...that and fraud.


10:36 pm on Aug 11, 2005 (gmt 0)

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I am a bit biased as my company owns and operates one of alibaba's major competitors. We are nowhere near as big as them but follow an extremely similiar business model.

I agree that Yahoo may have paid too much, but Janet's experience is not uncommon. Just as much has been done to combat fraud in eCommerce over the past few years, much has been done to decrease fraudulant activity on international trade portals.

As always it comes down to buyer beware and do your research. Sure, you'll get many 'please send free samples to me here in west africa' but the savvy are able to weed through these and find the gold.

Internet use in China is much more business oriented. China produces schwackloads of finished goods for export. Yahoo just bought the best insider scoop into those fields that money can buy.

I think it is a great aquisiton, just a wee bit pricey.


10:41 pm on Aug 11, 2005 (gmt 0)

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e-commerce in China will be huge, not if, just a matter of when,


china is now where "we" were 9 or 10 years ago

technology has advanced massively in that 9 or 10 years, so china's "internet growth" will be much quicker than ours was - and remember that china has about 25% of the world's population .............

china's "internet growth" will boom like nothing we've ever seen before ..........

$1bn is peanuts compared to the potential rewards ........


4:51 am on Aug 12, 2005 (gmt 0)

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Thinking on this, I did a search, and sure enough, there has been enough of a problem, along the lines I experienced, at Alibaba, they dedicate a page to fraud, on their site. If you do a G search, for Alibaba + fraud, it comes up #1. I guess things haven't changed since I was a member.

The page is pretty basic, but none the less, I have never seen a directory that felt the need to post clues to fraud that originates from their site. The clues posted, outline some of the problems you encounter, once you post your company profile, but not all. I guess they are the problems most reported to Alibaba.

I noted they also have a severe problem with identity theft of user account, and have a page dedicated to it.

All the talk about seo and neighborhoods, how do you justify a major search engine buying a site so prone to these problems?

Why would you want to be associated with a b2b directory site that has to post (my translation)

summary: our site is frequented heavily by thieves and liars so be VERY careful and expect the worst...


summary: log into your account often to make sure nobody has stolen it?

Good gravy, if it was my site, I would have shut it down long ago as a public service. This atmosphere of felonious activity is not good for bringing new business to the web, or for ecommerce as a whole. It only makes more people wary and hurts the many businesses that have tried to overcome the fear of internet fraud, to do honest transactions.

Log into your account often because theives are stealing accounts and identities? Oh please. Why bother to have a b2b sales account in a directory, if the problem is so bad as to warn about account theft?

Clearly it was a mistake to launch Alipay. That is the drawing card for crooks, and only added to the problems they had before that. It puts a directory at the same risk level as merchant accounts.

$5000 a year membership, by one million factories is a truck load of money, but when the risk to users is that high, how do you justify your profits? At what point do ethics kick in? What will be added next to the Yahoo network? Porn sites? Please... somebody tell me they haven't already crossed that line.


8:56 am on Aug 12, 2005 (gmt 0)

10+ Year Member

Although it is very clear that fraud is a problem on alibaba and something which they need to work on but the site definitely provides a very valuable service to many people. It is hard to argue with the fact that in 2004 they averaged 300,000 visitors a day and the site generated somewhere around $4 billion in transactions. Despite these fraud problems obviosuly people find it a great place to get business done......


11:31 am on Aug 12, 2005 (gmt 0)

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Fencing of stolen goods (is this "fraud"?) occurs on Ebay. I can't judge the relative prominence of the fraud-prevention pages on Alibaba vs Ebay, but I think any site that becomes successful is going to attract criminals. Ebay so far defends itself as being only a "message board" and is not responsible for the content of the auctions it provides. I suppose Alibaba is in a different legal position if it actually collects big $ fees for membership.


3:31 am on Aug 14, 2005 (gmt 0)

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IMHO, they should've invested that money in YPN or Y Search Marketing or whatever they call it nowdays.


4:00 pm on Aug 14, 2005 (gmt 0)

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Call me naive, and maybe my awe is around a decade out of date, but it still blows my mind that anyone would pay a billion US dollars for 40 percent of a frigging website. It's a virtual property, theoretically buildable in a living room or college dorm. Wow, the times we live in...


4:09 pm on Aug 14, 2005 (gmt 0)

>> "virtual property"

so is Google who will make $1+ Billion in real profits this year.


5:11 am on Aug 16, 2005 (gmt 0)

WebmasterWorld Senior Member 10+ Year Member

Wow, I wish I had a living room or garage like yours! Big enough to hold Google's fifty thousand servers, three hundred mathematics PhD's, and who knows how many book scanners? I thought, after Romania's anticommunist coup d'etat, nobody except the Plutocrat of Brunei and the Sith Lord of Redmond had that kind of digs.


5:46 am on Aug 16, 2005 (gmt 0)

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3:31 am on Aug 21, 2005 (gmt 0)

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That's weird....I had an 'e" on the end, with an accent, you know, that Frenchy way of acknowledging your..um..'opponent' (or whatever) has scored, from the sport of fencing, you know - swordplay... and pronounced "too-shay". When I previewed it, that e was was there. But now it's gone, and replaced by a question mark, which only makes it seem even weirder...
Just wanna clarify, so the previous post doesn't look like it came from outer space!

peter asr guy

3:47 am on Aug 23, 2005 (gmt 0)

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Au contraire - I see the accented e :)


4:38 am on Aug 23, 2005 (gmt 0)

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Now it's back. How weird.


2:11 pm on Aug 23, 2005 (gmt 0)

10+ Year Member

...and now it's gone again. I give up.

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