In October 2005, Yahoo! Inc. ("Yahoo") formed a venture with Alibaba Group Holding Limited ("Alibaba"), the country's largest e-commerce business. The firm invested US$1 billion in Alibaba for a 40% stake and transferred the ownership of Yahoo! China ("Yahoo China") to Alibaba. Nevertheless, some media outlets have described the two companies' relationship since 2005 as being everywhere from rugged to completely nasty. Yahoo's choice in mid-2009 to change to Microsoft's Bing search technology has really prompted Alibaba to embrace an internet search engine from Yahoo's local competitor Sohu.com.
Yahoo Relationship Crisis with Alibaba in China Case Solution
Yahoo and Yahoo! China for advertisers directly compete by soliciting firms in southern China to advertise on Yahoo's Hong Kong web site. Alibaba has been experiencing a loss in its operations ever since 2006, as well as the search sales share of Yahoo! China has fell from 27% in 2005 to an insignificant amount in 2010. But Yahoo! has turned down the offer to buy back its position of Alibaba because it'd like to wait for the IPOs of Alibaba's two leading subsidiary companies prior to exit. Envisaging an escalation in tension with Alibaba, Yahoo’s board want to review its approach to managing this venture and find out what should be done to mend the ties.
PUBLICATION DATE: June 12, 2012 PRODUCT #: HKU970-HCB-ENG
This is just an excerpt. This case is about COMMUNICATION
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