Semel Speaks Out on Yahoo's Alibaba Purchase

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Yahoo's CEO on Alibaba stake
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You've not been able to move for stories of Yahoo's 1bn buy into chinese ecom giant Alilbaba for a few days, but untill now, there (at least for me) just hasn't been that much of interest in it here. I think the interview Semel gave MarketWatch however is very good, and explains a lot about the deal that i'd been missing untill now.

Q. Why not buy Alibaba outright? Were there regulatory hurdles that made that type of deal prohibitive?

Semel: We structured it in a way that was consistent, in a funny way, [similar] to Japan. [The structure allowed] Alibaba's overall management to run the company, and it was a way for both sides to benefit going forward. We're pleased that way. We're thinking long-term thinking with a shared vision. We spent a lot of time thinking about where we think the world is going. Yahoo will continue to [focus] on commerce, search [where Yahoo is the No. 2 player in search -- based on number of queries -- behind Baidu, and you look at that and combine assets. Our technology and their management is a winning combination. We have a leg up on the fastest-growing market in the world and consistent with Asia. This gives us an opportunity to lead in China. We bet on the greatest growth of any company.

And asked why they weren't in the running for Baidu, here's what made the penny drop:

Semel: Baidu is doing a good job. Yahoo search is No. 2 -- let's not forget that. We're very excited about our search. Alibaba brought [commerce] to the equation. Yahoo's going to bring communication and search. Technology in search will be a big factor down the road for the new entity.

It's interesting to note the different approaches to China the two main players have taken. Google seems to be running a pure Search play, with some Adwords deals dealt in for the hell of it. Yahoo! makes an ecom/search play - using existing infrastructure and business to "make the whole".


Good move.

While many of us have probably been concentrating for years on search and whatever else we do, it pays to note that Yahoo's been in the portal business a good while, and it shows.

Looking at today, it's clear that this is one heck of a portal. You can check your email, read RSS feeds, comics and news, check stock prices, sports and local theatre listings, shop online, search travel dates (hotels, flights), listen to music (Create a Station ... hellooo, beautiful!), use Yahoo Messenger, set up a website, attend an online auction -- as well as use the search feature and a ton of other stuff that I haven't looked into.

In comparison, what does any other search company have? Free email and a toolbar?

Some search engines may be neat tools and have today's "sexy" cachet. Yahoo, on the other hand, is home.

Another thing ...

Another thought strikes me: it may be that Yahoo has a lesser share of the search market than Google.

However, either the Yahoo folk are completely out of their minds in spending what is clearly gazillions on developing a rather amazing array of features of interest, or people are actually using the portal. Heck, why search for anything when you can scan the various types of headlines, and get what you want from a reliable source? That would imply, you know, a trust factor among the public ... and even though Yahoo may be the distant relative that the SEO community doesn't worry so much about, my guess is that, if you want eyeballs, they're there.

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