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Yahoo in Bid To Reacquire China Name

Screen Shot 2013-07-23 at 10.10.16 AMJust days after making its first acquisition in China under a new CEO, faded U.S. search giant Yahoo is reportedly in talks to reacquire the Chinese rights to its brand from former China partner Alibaba. The reports, if true, would be the latest signal that Yahoo is gearing up for a major new attempt to become a player in China’s huge Internet market, following two failed previous attempts. If such a new foray really comes, Yahoo would join other major US Internet giants such as eBay and Google, which also look set to make big new pushes into China following earlier failures.

The latest media reports are rather vague, citing unnamed industry insiders saying that Yahoo is now in talks with Alibaba to reacquire rights to the China Yahoo name.  It’s unclear what rights exactly Alibaba now holds for the Yahoo name in China as a result of the two companies’ strategic partnership, formed in 2005. At the time, Alibaba took over most of Yahoo’s China assets, including its China-based search business that has become a non-player in the market since then.

A quick look at www.yahoo.cn confirms that the site is still operated by Alibaba’s cloud-computing unit, Aliyun. But Alibaba has put big resources into developing other search sites, most notably its eTao site that specializes in e-commerce search. Earlier this year, Aliyun also launched its own search service at s.aliyun.com, with media reporting the site was designed to be a mainstream search engine that could compete with the yahoo.cn site.

I suspect the rights to the Yahoo search name for China could be the main focus of these latest talks, if such talks are happening. A spokesman for Alibaba declined to comment on the matter. Such talks would come just days after Yahoo announced its first China acquisition under Marissa Mayer, who became CEO a year ago with a mandate to turn around the company that pioneered the online search market but has struggled for much of the last decade.

Under the deal announced last week, Yahoo acquired a Beijing-based online R&D startup called Ztelic, headed by the former head of Yahoo’s R&D for China. Ztelic’s main product is software that helps users track traffic on social networking service (SNS) sites. I commented at the time that the deal represented a conflicting signal from Yahoo, which earlier this year shuttered its China-based email service in what looked like a prelude to a withdrawal from the market.

The latest reports say the talks to re-acquire rights to the Yahoo China name are part of a broader campaign by Yahoo to re-enter the market, with a major focus on the mobile Internet. Based on the Ztelic acquisition and now these latest reports, Yahoo’s potential new focuses could include SNS and search, with an emphasis on mobile services that are rapidly overtaking traditional desktop Internet services.

Yahoo, whose two previous China initiatives over the last decade both ended in disappointment, certainly wouldn’t be the first U.S. Internet company to reconsider China after its initial failures. Google withdrew from the China search market in 2010, but has aggressively promoted its Android mobile operating system since then and may be preparing to re-enter the China e-commerce market.

eBay also largely withdrew from the market years ago after a bruising fight with Alibaba, but has more recently returned through several new tie-ups, including reports it may be looking to partner with Internet giant Tencent. This latest Yahoo report, combined with the earlier acquisition, appears to indicate that Mayer intends to make a new play for China. That leads me to suspect we’ll see one or two major new moves by the company in the market over the next year.

Doug Young lives in Shanghai and writes opinion pieces about tech investment in China for Techonomy and at www.youngchinabiz.com. He is the author of a new book about the media in China, “The Party Line: How the Media Dictates Public Opinion in Modern China.

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