Yahoo may have hoped that Google had turned itself into the target of the Chinese government, allowing other US companies to thrive unhindered, but it does not look like it.
By expressing its support for Google’s stand against Chinese censorship, and cyber-attacks, Yahoo has now been drawn into a dispute with Alibaba, the Chinese company to which it in effect outsourced its business there in 2005.
As the FT reports, this incident is part of a pattern of worsening relations between the two:
Yahoo and Jack Ma, Alibaba’s founder, have clashed repeatedly, with Yahoo upset that Alibaba has allowed Yahoo China to play a smaller part inside the group while its share of the Chinese search engine market dwindles. Alibaba has moved its online classified business from Yahoo China to Taobao, a rival internal property.
The dispute over freedom of speech is turning a standard set of tensions between a US company and its partner in China into something deeper and more intractable.
Yahoo was brave to take a stand with Google at a time when other US companies were doing their best not to be noticed, as the FT noted last week:
“I worked in China for four years, and everything gets stolen. God bless Google,” an employee at one of the Valley’s biggest companies said, but added: “We’re not going to say anything, because China is special to us.”
However, if Alibaba aligns itself so aggressively with the Chinese government, it raises the question of how long Yahoo can carry on operating through a hostile partner in which it holds a 40 per cent stake.
