Alibaba CEO and Yahoo China chief Jack Ma has said he will make Yahoo profitable by turning it into a business-oriented search engine.
In this way it can diversify its business away from that of Baidu, which is trouncing the foreign competition in China’s online search market.
"If Yahoo is going to win, it has to do so in a new way," Ma told AP in Shanghai.
Ma took over Yahoo’s beleagured China operations in October 2005. Since then, apart from some aesthetic changes to Yahoo’s portal in the country, it is unclear what has been achieved.
It certainly hasn’t been easy to turn things around. "I had a good life before the Yahoo deal," Ma told the South China Morning Post (subscription required) in June. "I planned everything my way, everything: the management, cash and business.
"I prepared three tables of food and I got two tables of people. But since I got Yahoo, I have had three tables of food and, like, five tables of people."
Given Ma’s success with business-to-business portal Alibaba, shouldn’t he have pursued this tried and tested business formula when he took over Yahoo?
Easy to say now, perhaps. The "tables of food" metaphor was indeed revealing.
Yahoo was prepared to give Ma US$1 billion in exchange for 40% of Alibaba and the Yahoo China operation because they thought he could work some of the magic that saw Taobao muscle eBay out of the internet auction market.
He hasn’t yet – but is this high-end, business-centered approach the answer? Who knows?
What we do know is that Baidu has retained its stranglehold on the search market by uniting a strong Chinese language search engine with a vast marketing network.
What Ma has, through the sales team that built his Alibaba network as well as the network itself, is a means of selling his services to business.
Combine this with the online payment system Alipay and the recently launched web-based business software company Alisoft, and you have a formula that may yet rescue Yahoo from the depths.
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