Yahoo! China doubles, despite setbacks

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) September 12, 2006 -- Yahoo! China has managed to double its staff in the past year, despite personnel changes, a challenging market environment and legal battles with its former general manager.

Jack Ma, CEO and general manager of Yahoo! China, said in an interview on Saturday that the Chinese operation of the US Internet giant added more than 400 employees in the past year to reach a total of 800 staff members.

The new employees were mainly taken on for development work, an area that boosted its numbers from 34 to almost 300.

"When we took over Yahoo! China, the company was in a very dangerous situation and many employees were leaving it," said Ma.

"Now we can say we have successfully survived the difficulties."

Last August, Yahoo! handed over the management of its China business to Ma, chairman and CEO of the Chinese e-commerce company Alibaba, and paid US$1 billion to Alibaba and its investors for a stake of about 40 per cent in the Hangzhou-based firm.

But former Yahoo! China President Zhou Hongyi and some of his team had already left the company. Some of them established another Web firm Qihoo, which later installed Zhou as its chairman.

Zhou became president of Yahoo! China in late 2003, when Yahoo! acquired his firm Beijing 3721, a real-name search service provider, for US$120 million. But dispute flared between the two sides over how to evaluate Zhou's performance. Zhou claimed Yahoo! did not give him the money as stated in the acquisition agreement.

Since 3721 accounted for about 70 per cent of Yahoo! China's revenue and a lot of employees were Zhou's colleagues at 3721, Yahoo! faced huge difficulties as employees, customers and technologies left the company.

Ma said Yahoo! China has turned to online advertising as its biggest source of revenue. Meanwhile its share is now minimal in the 3721 real-name service, which allows users to type a website name into a browser address bar and directs them to the site.

It is also beta-testing a new version of the search service, the result of Yahoo!'s global search expertise and the local development team's knowledge of the Chinese market.

Ma said the current priority is not to bring the Alibaba business to Yahoo! China to save the latter, but to achieve organic growth.

Alibaba was reported earlier to try to generate US$200 million in revenue this year, about double last year's figure.

He added Yahoo! China has yet to find its direction in the world's second-largest Internet market, as its two strong businesses in the global market online advertising and search both face severe challenges in the country.

In the online advertising business, Yahoo! is the sixth most popular website in China, far behind domestic firms Sina Corp and Baidu.com, while in web search it lags behind Baidu and Google, which have over 80 per cent of the market share together.

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