Yahoo in China to promote search engine
(AP)
Updated: 2005-11-09 00:35

The entrepreneur who runs Yahoo Inc.'s China-based Web portal has announced a new strategy based on promoting the site as a search engine, saying he's ready to spend heavily in a battle with Chinese-language search leader Baidu.com.

Wednesday's announcement by Jack Ma, chief executive officer of Alibaba.com, highlighted the intense rivalry in China's market of more than 100 million Internet users.

Alibaba took control of Yahoo's China sites in a deal in August, in which Yahoo bought 40 percent of the Chinese company.

Alibaba unveiled a redesigned, simplified Chinese-language Yahoo site that focuses on a search box and drops entertainment listings and other features of the earlier site.

"What we are doing is sending out a strong signal to China, to the Yahoo team: 'We are focused and we are coming,'" Ma told a group of reporters.

He said Alibaba would cooperate with the authorities if they sought information on "politically sensitive information" sent by a Yahoo e-mail customer.

"I'm not a political group," Ma said. "I'm a businessman." China's Internet market has attracted investment from major players, including search giant Google Inc.

Daily searches by Chinese Internet users are expected to jump from 360 million this year to 816 million in 2007, according to investment bank Piper Jaffray. It expects annual revenues from advertising on search sites to reach US$1 billion (euro700 million) by 2010, up from US$134 million (euro100 million) now.

Ma, a wiry, boyish former English teacher, is one of China's best-known Internet entrepreneurs.

Alibaba.com, based in Hangzhou city southwest of Shanghai, runs online commerce sites that link foreign buyers with Chinese wholesalers. Its popular consumer auction site Taobao.com competes with the Chinese arm of eBay Inc., the world's top online auction company.

Ma said Alibaba hopes to use Yahoo's search engine to direct customers to its commerce sites.

Alibaba received US$250 million (euro190 million) in cash from Yahoo and is ready to spend much of it to develop search engine software and compete with Baidu, he said.

"I think (in) search, we have a chance to win," Ma said. However, he said, "When we took (over) Yahoo search, it was not good, and it is not good today either. We are here to make it better."

Chinese-language search engines face unusually daunting linguistic challenges.

Chinese is written in thousands of ideograms without spaces between them, making it hard to tell where one word or phrase ends and the next begins.

Baidu, regarded as the most effective Chinese-language search site so far, shot to prominence in August with a U.S. stock market listing that brought in cash for the company to expand.

Alibaba says its sites, combined with Yahoo's, have a total of 32 percent of the Chinese search market, compared with 37 percent for Baidu.

Ma said he believed Yahoo has less than a year to make itself China's leading search engine. After that, he said, Baidu's expansion will be compete and the company will be harder to dislodge.

"If we don't move fast, within eight to 10 months, we don't have a chance," he said.