Ma said he was prepared to spend top dollar to overtake China search leader Baidu, which commands a 37% market share, compared to Yahoo's 32%. Money aside, time is also of the essence: Ma gives Yahoo less than a year to become China's leading search engine; after that, it could be hard to dent Baidu's momentum and expansion plans, he said.
Yahoo continues to draw fire for cooperating with the police in providing information leading to the arrest of a journalist. A leading dissident, Liu Xiaobo, called Yahoo "shameless" and accused the portal of betraying its customers to support a dictatorship. Yahoo in September provided information on journalist Shi Tao to Chinese authorities, resulting in 10-year jail sentence for Shi, whose alleged crime was revealing details of an official media crackdown. When asked if he would turn in a customer again, Ma said, "I would do the same thing. I would let the government take him.'' His justification: "I'm a businessman."
Meanwhile, the honeymoon seems to be over for Baidu. In its first earnings report since its August public offering, Chinese Internet search engine Baidu.com reported a US$1.1 million third-quarter net profit on sales of US$11.1 million, an amount nearly triple that from the previous year, but investors responded by selling off Baidu shares in after-hours trading. Quarter-to-quarter comparisons did not fare as well, as profits were down 29% from the second quarter, reflecting higher employee stock-compensation costs, Baidu said. The company's NASDAQ-traded shares declined 15.5%, equivalent to US$12.55, on the report.
The other significant search player, Google, has meanwhile increased its focus on China by hiring a sales veteran to lead the US Internet search engine's marketing strategy in that country. The US Internet search engine lured away Johnny Chou from UT Starcom, where he was president of China operations for nine years.
UT Starcom signs Internet deal
UT Starcom, a US networking firm, said it has a deal with China Telecom to deliver Internet television (IPTV) starting with 5,000 subscribers in Shanghai in January 2006. Subscriber growth is expected to top 110 million by 2010, with Asia Pacific accounting for more than 50% of subscribers worldwide, according to a recent ABI Research report.
Lucent enters China's 3G market
Lucent Technologies said it was forming a partnership with Datang Telecom Technology of China as it targets a bigger share of Beijing's expenditure on 3G telecom networks. Lucent's new alliance will make it one of the last major Western telecommunications equipment makers to enter the TD-SCDMA market, China's homegrown 3G standard which is heavily promoted by Beijing.
HP to open China lab
Hewlett-Packard is to open a research laboratory in China later this year specializing in computer security and services, an HP Labs executive said in an interview with CNET's News.com. The company, which already has basic research facilities in Beijing, Shanghai, Guangdong, Shenzhen and Jiangsu, has yet to reveal details regarding the location and staffing levels of the new laboratory. Last year, HP announced plans for a US$23 million project in Beijing aimed at developing its Linux business in China.
Taobao commits to free services
Chinese online auction website Taobao will invest US$120 million to extend its free service commitment for another three years a bid to attract more users and undercut global operator eBay. Taobao, owned by Chinese e-commerce website Alibaba, has spent US$55 million ensuring free services since it opened in May 2003, while eBay charges users for listings and transactions. The Chinese group has 10 million users and boasts of 100 million page views a day.
Telecom leader Datang in fraud probe
Beijing's Datang Telecom Technology, believed to have invented China's high-speed mobile phone technology, is being investigated by the China Securities Regulatory Commission for fraud, involving allegations of failing to disclose information, reported The Hong Kong Standard. Datang was probed nearly a year ago on suspicion of failing to disclose required information.
Lenovo extends Asia-Pacific lead
Lenovo has widened its market lead in the Asia-Pacific region on the strength of its brand name in China and on its sales to the mainland education sector, the Standard of Hong Kong reported, citing a report by market research firm IDC. The company, which bought IBM's personal computer business earlier this year, shipped 20.4% of PCs and laptops sold in the region, excluding Japan, the third quarter, up from 12.8% a year ago. Separately, in a bid to enter the US computer retail market, Lenovo has reached deal to begin selling certain IBM ThinkPad models through the US retail chain Office Depot, reversing IBM's decision years ago to bypass US retail shelves.
Sony to rely on China
China's fast expanding market for both entertainment and electronics will be Sony's main source of growth in years to come despite political tensions between China and Japan, the company's chief executive Howard Stringer said at a news conference on Sony's China strategy. Stringer said China had plenty of room for growth, given that Sony products currently reach only 10% to 20% of the population. During anti-Japanese protests earlier in the year, the company's China Web page was attacked by hackers and there were also calls for a boycott of Japanese products. Sony, however, has said its sales were unaffected.
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