In October 2005, Yahoo! Inc. (“Yahoo”) has formed a partnership with Alibaba Group Holding Limited (“Alibaba”), the largest e-commerce company in the country. The company has invested $ 1 billion in Alibaba by a 40% and has transferred ownership of Yahoo! China (“Yahoo China”) to Alibaba. However, some media have described the relationship between the two companies since 2005 as anywhere from rock to downright ugly. Yahoo’s decision in mid-2009 to switch to Bing search technology to Microsoft Alibaba encouraged to adopt a search engine Yahoo local competitor Sohu.com. Alibaba and eBay Inc. works with Yahoo instead of entering the business to business market, USA. Meanwhile, in direct competition with Yahoo Yahoo China to advertisers who look for companies in southern China Hong advertising Kong on the Yahoo website. Alibaba has been a loss in its activities since 2006, and the proportion of research income Yahoo China fell 27% in 2005 to a negligible level in 2010. But Yahoo rejected the offer from Alibaba to buy its stake as it wants to wait IPOs of two main subsidiaries Alibaba before any output. In light of the growing tension with Alibaba, Yahoo’s board would review its approach to the management of the association and understand what to do to repair the relationship.
Source: University of Hong Kong
Release: June 12, 2012. Prod #: HKU970-PDF-ENG
Yahoo: Alibaba China Relations Crisis Solution Case