This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Tao of Yahoo!

U.S. Internet companies have been tripping over themselves to rush into China's Internet market, which is expected to surpass the U.S. in overall users in the next few years. However, most Chinese Internet users have spent the bulk of their time on online video games first, ecommerce second and Internet searches last. That's contrary to U.S. and European behavior, in which search has dominated.

Still, in the mad scramble of non-Chinese Internet companies to push into China, anything goes. So Yahoo!, which has shown a focus on Internet media (such as music, videos and financial data) as well as search, has abandoned that approach in favor of placing bets in China on a business that more closely resembles that of eBay's.

And eBay may, in the long run, prove most vulnerable to this deal. Depending on the data used, Alibaba's online-auction unit is either about to surpass or has already surpassed eBay's own consumer-to-consumer auction operations -- eBay's CEO Meg Whitman's multiple trips to China notwithstanding. eBay vowed to spend $300 million this year, largely on China and eBay's PayPal online payment subsidiary, to shore up its future business.

Alibaba also drew attention in the U.S. during eBay's vaunted seller jamboree, eBay Live, when the Chinese upstart set up a display in a nearby hotel and handed out free goodies to lure eBay sellers to its Chinese auction and online payment rivals. Yang downplayed the potential rivalry, but Alibaba CFO Joseph Tsai said had probably pushed past eBay in China.

"In the second quarter, Taobao had $200 million of gross merchandise value," Tsai said. "We think eBay's well below $200 million in gross merchandise value in the second quarter and that we're now over 50% and we've overtaken eBay in that market."

Tsai and Alibaba founder Jack Ma will be expected to fill the shoes of Zhou Hongyi, the founder of Chinese search site 3721, which Yahoo! bought in 2003. Under Yahoo!'s aegis, Hongyi quickly built his five-year-old search startup into China's second-largest search engine, after (BIDU - Get Report), which is minority owned by Yahoo!'s U.S. rival Google.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BIDU $152.73 0.00%
EBAY $22.49 0.00%
GOOG $682.40 0.00%
YHOO $27.04 0.00%
AAPL $93.99 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs