August 14, 2016
“ahoo’s early success in the United States and Jerry Yang’s ethnicity set up high expectations for the company in China. ”
August 14, 2016
“Born in Taiwan in 1968, Yang took the name Jerry after he moved to the United States in 1978 with his mother, Lily, and younger brother, Ken.”
August 14, 2016
“Jerry came to the United States with just one word of English—“shoe”: “We got made fun of a lot at first. I didn’t even know who the faces were on the paper money.”
August 14, 2016
“Yahoo began as a list of other sites that Jerry and David had bookmarked using Marc Andreessen’s recently launched Mosaic browser.”
August 14, 2016
“Registered as Yahoo.com in January 1995, the company was incorporated in March 1995, and the following month, Sequoia invested $2 million, taking a 25 percent share of the company. The two engineers never finished their Ph.D.s. Jerry recalled, “When I first told my mom what we were doing, the best way I could talk about it was like a librarian. And she said you know you went through nine years of school to become a librarian. She was kind of shocked to say the least.”
August 14, 2016
“The image of Jerry sitting on the Great Wall is an appropriate metaphor for Yahoo’s China dilemma. The market was growing rapidly, now home to millions and soon tens of millions of Internet users. Yahoo had already managed to become a dominant player in Japan, so why not in China, too? But China presented a quandary: how to deal with a government intent on control at all costs.
In 1996, speaking in Singapore, Jerry had shared his views: “Why the Internet has grown so fast is because it is not regulated.” There were limits to how much Jerry’s Chinese ethnicity would translate into an inside track for Yahoo in China: “The First Amendment safeguards freedom of speech. I’m more American in terms of my upbringing now.”
August 14, 2016
“Could Yahoo go it alone in China? Or would it be better to pick a local partner, perhaps buying out one of the portal pioneers, such as Charles Zhang’s Sohu, the original name of which, Sohoo, left no doubt as to its plans to become the “Yahoo of China”?
Build or buy? Either course had its complications. There were simply no precedents for Yahoo to look to. AOL opted in the summer of 1999 to invest in Hong Kong–based China.com.”
August 14, 2016
“Yahoo China’s content was boring, and Chinese Internet users noticed, being drawn instead to the more compelling offerings of Sina, NetEase, and Sohu. Yahoo was losing the battle to stay relevant in China just as the country’s Internet population was taking off.”
August 14, 2016
“Tencent harnessed two trends that would transform the Chinese Internet sector: content delivered to cell phones, and online games played on PCs. Founded a few months before Alibaba, Tencent (tengxun in Chinese) was launched in late 1998 by two twenty-seven-year-old computer scientists who had met at Shenzhen University. Pony Ma (Ma Huateng) later became chairman and CEO of the company and is today one of China’s richest men. Although no relation to Jack, Pony’s last name, Ma, is the same as Jack’s, his English name chosen as a joke since “Ma” means horse in Chinese.”
August 14, 2016
“Tencent’s breakthrough product was its OICQ instant messaging client, installed on desktop computers, which was essentially a clone of the ICQ (“I seek you”) product developed by Israeli company Mirabilis.7 Facing the threat of a lawsuit, Tencent rebranded its service as “QQ,” the letters chosen to approximate “cute” in Chinese. With a cuddly penguin in a red scarf for a mascot, the service became a big hit with young Chinese Internet users, initially on PCs, then on cell phones.”
August 14, 2016
“Baidu was founded in Beijing in 2000 by Robin Li (Li Yanhong) and his friend Dr. Eric Xu (Xu Yong). Born in November 1968, Robin was one of five children of factory workers in Shanxi, a gritty province in central China. His smarts won him entry to Peking University to study information science. After June 4, 1989, he was keen to head overseas: “China was a depressing place. . . . I thought there was no hope.”
August 14, 2016
“Robin then moved to California to work for the search company Infoseek, before raising $1.2 million in start-up funding and returning to China in January 2000 to found Baidu. ”
August 14, 2016
“Looking back, Li said, “Once you find out what you should do, then you need to stay focused. That’s what we did during the difficult times back in year 2000, 2001, 2002. Many people think search was a done deal. It’s boring. Everyone has figured that out in terms of technology and product, but we thought we could do a better job. ”
August 14, 2016
“Becoming increasingly desperate for a fix for its China business, in November 2003, Yahoo announced a deal it hoped would transform its fortunes, buying a company called 3721 Network Software.”
August 14, 2016
“The company 3721 allowed the millions of new users coming online in China to search using Chinese characters thanks to a special toolbar that would then link the Chinese characters input to the corresponding website. The software was downloaded, although not always with the user’s knowledge, and was hard to remove.”
August 14, 2016
“He relished the publicity of the lawsuits or public spats he engaged in with Jack, Robin Li, Pony Ma, William Ding, and Lei Jun (Kingsoft and Xiaomi), among others.”
August 14, 2016
“China was the least of Yahoo’s worries. In the United States, the company was being eclipsed by Google, whose algorithmic search engine was outgunning Yahoo’s directory-based design. Yahoo was slow to recognize the threat posed by Google, a company like Yahoo founded by two Stanford Ph.D. candidates. Yahoo had missed an opportunity in 1997 to buy Google from Larry Page and Sergey Brin, but its biggest mistake of all was the June 2000 decision to make Google its search partner. With Google’s logo featured on its home page, millions of customers discovered a superior search product and gateway to the broader Internet that made Yahoo increasingly irrelevant.14”
August 14, 2016
“It wasn’t long before Zhou took to the media to criticize Yahoo, telling journalists that selling 3721 to Yahoo was his biggest regret, that Yahoo’s corporate culture stifled innovation, and that the firm was poorly managed: “Yahoo’s leaders have unshakable responsibility for its decline. Whether it is spiritual leader Jerry Yang or former CEO [Terry] Semel, they are good people, but [they] are not geniuses. They lack true leadership qualities. When facing competition from Google and Microsoft, they didn’t know what to do, and had no sense of direction.”
August 14, 2016
“Yahoo had struck out twice in China: first Founder, then 3721. After years of frustration, Jerry Yang made a bold decision. He handed Jack $1 billion, and the keys to Yahoo China’s business, in exchange for a 40 percent stake in Alibaba.”
August 14, 2016
“The deal originated in a May 2005 meeting17 between Jack and Jerry at the Pebble Beach golf course in California. Before a steak-and-seafood dinner with other tech luminaries from the United States and China, the two founders, who had a common shareholder in Masayoshi Son, took a stroll18 outside. Jack recalled, “It was extremely cold that day, and after ten minutes I couldn’t bear it anymore. I ran back indoors. [But] in those ten minutes we exchanged some ideas. I told him clearly that I wanted to enter the search business, and my opinion was that search engines would play a very important role in e-commerce in the future.”
August 14, 2016
“Yet the logic of the combination was not immediately obvious. Yahoo, a consumer content company, was to hand over its China assets to a company that was essentially a B2B business information company with two newer businesses, Taobao and Alipay, tacked on”
August 14, 2016
“Jack’s charisma and vision for Alibaba also played an important role, as Jerry recalled, “It was probably in retrospect a big bet, but if you met Jack, and having got to know him and seeing what his vision was, you certainly thought it was worth it. And he really had an inside track on being a very dominant commerce platform in China, so that really gave us a lot of comfort.” ”
August 14, 2016
“Jack later emphasized that the impact of the transaction went beyond the funding and market recognition provided by Yahoo. Although Alibaba had demonstrated its ability to build start-ups—Alibaba.com, Taobao, and Alipay—the deal brought much-needed experience in mergers and acquisitions, something that would become increasingly important in the future.”
August 14, 2016
“Jack said he would do the Yahoo deal again but “in a better, smarter way,” adding, “Nobody knows the future. You can only create the future.”
The deal left Jack and Joe in charge of Alibaba, although the agreement also included a little-noticed clause that gave Yahoo the right, in October 2010, to appoint an additional board member. If that board member aligned with SoftBank, then Yahoo could then enjoy a majority and the ability, in theory, to take control of Alibaba.”
August 16, 2016
“Yet under Alibaba’s management the Yahoo brand would rapidly fade and indeed eventually disappear entirely from China. Within a year of the deal, local media started to refer to Yahoo China as the unwanted “orphaned child,” with Alibaba more focused on nurturing its own baby, Taobao. In May 2007, Alibaba changed the name of the business from Yahoo China to China Yahoo, an apt reflection of who was in charge.”
August 16, 2016
“The pressure was so great that in 2006 Jack made the decision to remodel Yahoo’s home page in the uncluttered, clean style popularized by Google, which Baidu had already mimicked. But Jerry Yang was very unhappy with the move and asked Jack to change the China Yahoo site back to its original portal look and feel, which he did. Not surprisingly, Yahoo’s users were confused by the changes, and the company’s market share slid further. ”
August 16, 2016
“On September 10, 2005, I attended Alibaba’s Alifest in Hangzhou. The partylike atmosphere was heightened that year by the newly minted $1 billion deal with Yahoo and the growing sense that Taobao would prevail over eBay. Jerry Yang was to appear onstage with Jack as part of the celebrations. The icing on the cake was Jack’s invited keynote speaker that year: former U.S. president Bill Clinton.”
August 17, 2016
“In March 2010, Google stopped censoring search results in China, rerouting traffic to its site in Hong Kong—the other side of the “Great Firewall of China”—and signaling its exit from the market.35
eBay, Yahoo, and Google had all recognized that China’s Internet market would become massive.”
August 17, 2016
“Western Internet companies trying to crack the China market came to experience firsthand the old adage that in China “it is better to be a merchant than a missionary.” And the biggest merchant of all was Alibaba.”
Notes From: Duncan Clark. “Alibaba: The House That Jack Ma Built.” iBooks.
