Yahoo China unable to find a cure for failing business
Staff Reporter 2013-04-23 10:28
Yahoo China's logo. (Photo/CFP)
Speculation persists that Alibaba Group, which controls Yahoo China, will sell Yahoo China back to its US parent company in May, despite Alibaba's denial, NetEasy Tech reports on its website.
Founded by Jerry Yang and David Filo in 1994 in the United States, Yahoo! saw its stock prices climb sharply in the final years of last century. When it entered China in 1999, however, the US-based portal seemed to face difficulties in adapting itself to heavy competition in China.
In 2003, the company bought Chinese website 3721 for US$200 million and named its founder Zhou Hongwei the president of Yahoo China.
Zhou left the company in 2005 however after Yahoo complained that he was catering to his own interests, while Zhou complained that he had sold 3271 at a loss in 2003.
At the time, Yahoo was engaged in fierce competition with Google in the US and could not focus completely on its Chinese operations. It sold its Chinese interest and paid an additional US$1 billion to Alibaba for a 40% stake in the e-commerce giant.
But Yahoo China did not fare any better under the management of Alibaba, which tried to convert it from a portal service provider to a search engine, and then into a platform providing lifestyle information. Alibaba was unable to revive Yahoo's shrinking user base.
In September last year, Alibaba founder Jack Ma bought back Yahoo's stake for US$7.6 billion, branding the original deal a loss-making one, according to NetEasy Tech.
Yahoo China's email service has not evolved much in recent years either. Its users tend not to use it for anything beyond sending and receiving emails. The service can neither compete in the US with Gmail, which allows its users simultaneous access to Google Drive, Google Calendar and Gtalk, nor in China with NetEasy and Tencent.
While Yahoo China only allows a maximum file size of 25 megabytes for email attachments, its competitors allow up to several gigabytes.
After Yahoo closed its 15-year-old email service in South Korea at the end of 2012 because of the declining number of users, it is very probable that Alibaba may return Yahoo China to its US parent company, said NetEasy Tech.
