30 March, 2006

pick on yahoo! day

There’s such a storm of bad publicity for Yahoo! across the net today that AsiaPundit is decreeing March 30th as official pick on Yahoo! day.

For starters, Rebecca has launched one of the most-biting attacks on the company and co-founder Jerry Yang that  I have yet read. Yahoo! Abomination:

Freechinesevistimsofyahoo2Yahoo! founder Jerry Yang continues to spew excrement, echoing his shoulder-shrugging of earlier this month, which essentially amounts to saying: So sorry we assisted in human rights violations, but there’s nothing we can do if we’re going to bring the Internet to the Chinese people. One recent quote:

"You have to balance the risk of not participating," he said. "And people don’t realize that being in the market every day there, and being on the ground, we are seeing changes, on the whole, for the positive."

Tell that to the family of Shi Tao who is in jail for 10 years.  Jerry Yang should meet with them and tell them to their faces just how sorry he is, but that Shi is being sacrificed for a noble cause. I’m sure they’ll understand…

Yahoo! executives keep framing this issue as black and white: Either you’re in there and do everything the Chinese authorities tell you without question, or you can’t do business in China at all. That is false. Companies can and do make choices. You can engage in China and choose not to do certain kinds of business. Yahoo! has placed user e-mail data within legal jurisdiction of the People’s Republic of China. Google and Microsoft have both chosen not to do so. Why did Yahoo! chose to do this?  Either they weren’t thinking through the consequences or they don’t care.

Meanwhile David Wolf at Silicon Hutong questions how well joint-venture partner Alibaba is doing with the management of Yahoo! China and what Jack Ma has done with the $1 billion the company had received from Yahoo!..:

Jack Ma told the Search Engine Strategies Conference in Nanjing last week that he has basically redefined the phrase "burn rate." Less than a year after Yahoo! handed over it’s China operations and a $1 billion check to Alibaba in return for 40% of the company’s stock, and he’s already spent $750 million of that.

Let’s call it 9 months since the deal was announced. That’s $250 million a quarter. $2.7 million a day, 7 days a week, for nine months. At this rate, the entire billion will be gone by the end of the summer.

Hey, Pizza and Jolt Cola are Expensive in China

Now granted, he says that it’s been spent on research and development and "other projects." But without casting any aspersions or making any accusations, nearly any CPA or tax lawyer you talk to will tell you that both of those categories can (in practice) be interpreted very broadly. And the company is looking at further investments.

The first question that leaps to the top of anyone’s mind is okay, where did the money go? I’m not sure the general public will ever get to know, that it is really any of our business, or that it really matters anyway. It is entirely likely that everything is above board, as we have been given no reason (except for a monstrous sucking sound) to think anything is amiss. Yahoo! and its shareholders are certainly satisfied that their money has been well spent. Because if they weren’t, they would be calling for a SWAT team of forensic accountants to drop in with their arsenal of tools and start following money trails. Frankly, as a minority shareholder, I’m not even sure what rights Yahoo! has to even do this much.

But again, this is a diversion (albeit a titillating one for corporate scandal fetishists) from the real question.

Some more details on the spending are available at China Stock Blog.

AsiaPundit enjoys Jack Ma’s media appearances, he is inclined to say provocative things and the local media treat him like a rockstar. But while AP thinks Ma has a strong chance of beating eBay with auctions, he is not so sure that he will be able to turn Yahoo! China’s fortunes around. Especially as competition may be getting a bit more heated - Shak points to a report suggesting that the rapid growth seen in China’s search engine market is slowing.:

"China’s search engine industry will face a sharp slowdown in the coming 18 months." said Edward Yu, CEO of Analysys International, at the Search Engine Symposium held in Nanjing, China, on March 17, 2006. "The actual performance of search engines is far from people’s high expectations. Poor user experience, unstable advertising effects, and some irregular channel operations make the small and midsize enterprise customers of search engines suspicious of this new kind of advertising, which will lead to a slowdown in the growth of the search engine industry." explained Yu.

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by @ 8:41 pm. Filed under China, Asia, East Asia, Northeast Asia, Censorship

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