Business

Yahoo shuts down its Chinese news & community site

Image Credit: ExactTarget

Yahoo China appears to be shutting down, and visitors are currently being rerouted to a different site.

Yahoo China’s brand is managed and operated by Chinese e-commerce behemoth, the Alibaba Group.

The site offered news and community services, which used to be an extremely popular resource, according to Global Times, the publication that first reported the news. Yahoo China’s popularity has gradually waned over the years, and its employee base has shrunk.

Yahoo and Alibaba have been in cahoots since 2005. Yahoo invested $1 billion in Alibaba, in exchange for a 40 percent stake in the company. At that time, Alibaba was just six years old, and had yet to truly establish itself as a market leader in China. Alibaba now operates about 20 popular shopping sites, including Taobao and Tmall.

However, the two companies had numerous disagreements over the years. So in 2012, Yahoo agreed to sell part of that stake back to the Chinese e-commerce company. The buy-back resulted in Yahoo giving Alibaba control of the brand for up to four years.

This news may not result in mass layoffs of Yahoo employees. The goodbye message on the Yahoo China site says that employees will be redirected to other positions within the Alibaba brand.

It’s likely that many employees will end up at Alibaba’s public welfare business, given that visitors to the Yahoo China site are now being redirected to that site.

It’s not clear whether Yahoo will pull out of China for good. It has been challenging for many U.S. companies to establish a presence in China, due to a confluence of factors, including censorship and the rise of native brands.

Yahoo still owns about a quarter of Alibaba, a Chinese company that is expected to go public in the next few years. Analysts are speculating that the IPO will value Alibaba at about $70 billion.


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