Bottom line: Yahoo’s closure of its Beijing R&D center marks its final withdrawal from China, in a shift mostly related to internal issues but also reflecting the difficulties foreign Internet firms face in the tightly controlled market.
Yahoo closes Beijing R&D center
Nearly 2 years after shuttering its Chinese email service, faded US search giant Yahoo (Nasdaq: YHOO) looks finally set to completely leave the China market, with word that it’s preparing to close up its sizable R&D shop in Beijing. I’m not intimately familiar with Yahoo’s current China assets, but it does appear that this move represents the shuttering of the company’s last major Chinese operation. The move also comes as Yahoo prepares to spin off its sizable stake in Chinese e-commerce giant Alibaba (NYSE: BABA) into a separate company, bringing an end to the company’s decade-long marriage with China. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 19. To view a full article or story, click on the link next to the headline.
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Yahoo (Nasdaq: YHOO) To Close Beijing R&D Center (Chinese article)
Bottom line: Beijing needs to roll out new rules allowing limited foreign investment in sensitive areas or risk seeing private companies like Ant Financial suffer from slower growth and artificially low valuations.
foreign investment bans need new approach
Alibaba-affiliated (NYSE: BABA) Ant Financial has been on a financial roller coaster ride over the past month, as it tries to raise billions of dollar to fund its growth en route to an IPO that will offer Chinese investors one of their first plays into the private banking sector. Some reports have said the new funding could value Ant, whose largest asset is the Alipay electronic payments service, at up to $50 billion. But others have put the figure as low as $30 billion, reflecting the intense negotiations taking place. Read Full Post…
Bottom line: NetEase’s new California R&D center could become an important hub for its future global growth, while Zynga’s China pull-out reflects the extreme difficulties foreign firms face in the local gaming market.
NetEase opens US R&D center
Just a day after I wrote that online gaming giant Tencent (HKEx: 700) may be planning a major new drive into the US, we’re hearing that its top rival NetEase (Nasdaq: NTES) is also moving into the neighborhood with plans for a new California R&D center. NetEase’s move comes after search leader Baidu (Nasdaq: BIDU) and Tencent both set up US offices last year, though only Baidu actually announced a major new product development center. (previous post) All of these moves represent the Chinese companies’ efforts to tap into the Silicon Valley ethos, which has far more of the skills they will need in their quest to enter global markets outside of China. Read Full Post…
Bottom line: Alibaba’s stock is likely to come under continued pressure over the next 6 months, as it grapples with overvaluation, piracy issues and a large volume of shares coming back into the market from Yahoo.
Yahoo to spin off Alibaba stake
E-commerce giant Alibaba (NYSE: BABA) is in a couple of major headlines today, raising questions about its future ownership and also its open platform business model. On the ownership side, US Internet giant Yahoo (Nasdaq: YHOO) has announced it will spin off its large stake in Alibaba into a separate company, and then distribute shares in that new firm to existing Yahoo shareholders. On the business model side, Alibaba has enlisted one of the thousands of merchants on its popular Taobao C2C marketplace to respond to a government audit that found nearly two-thirds of goods sold on Taobao were fakes. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 28. To view a full article or story, click on the link next to the headline.
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Yahoo to Spin Off Alibaba (NYSE: BABA) Stake Tax-Free As Public Company (English article)
Taobao Publishes Merchant Letter Questioning Accuracy Of Govt Piracy Audit (Chinese article)
JD.com (Nasdaq: JD) Launches Major Imported Foods Initiative (GlobeNewswire)
Apple (Nasdaq: AAPL) Ranked As Top China Smartphone Seller In Q4 – Report (Chinese article)
Huawei Eyes $16 Bln In 2015 Smartphone Sales With High-End, Export Push (Chinese article)
Bottom line: Alibaba could make a bid to buy Yahoo as part of a broader overhaul of the relationship between these 2 Internet companies, but personal and other issues could ultimately hamper such a deal.
Yahoo to sell remaining Alibaba stake?
Media have been focused these last 2 days on reports of a new mega purchase by Alibaba (NYSE: BABA) in the insurance space, but another report centers on a far more intriguing possible deal involving the e-commerce giant’s long relationship with faded US search giant Yahoo (Nasdaq: YHOO). That particular relationship has undergone huge changes since the pair first formed their partnership a decade ago, and could easily be the subject of a book. In the latest chapter to that story, a new report is speculating that Alibaba could make a bid for Yahoo in the next year as it seeks to go global following its blockbuster IPO in 2014. Read Full Post…
Bottom line: Unbecoming behavior by people like Alibaba’s Jack Ma and JD.com’s Richard Liu reflect poorly on China’s corporate sector, and reflects a lack of professional standards.
Alibaba’s Ma, JD’s Liu on bad behavior
Alibaba’s (NYSE: BABA) charismatic founder Jack Ma is known for speaking his mind, but he was on the defensive last week after inflammatory remarks he made about rival JD.com (Nasdaq: JD) were published in a book. JD.com graciously accepted Ma’s rare apology for the remarks, even as its founder Richard Liu was also in the Internet gossip columns for his own controversial behavior related to a rumored break-up with his longtime young girlfriend. Read Full Post…
Bottom line: Alibaba’s new mega bond will pressure it to find good uses for its huge cash pile, while Tencent’s Warner Music tie-up is part of a new wave of deals to monetize its SNS platforms.
Alibaba plans mega bond offer
Leading Internet companies Alibaba (NYSE: BABA) and Tencent (HKEx: 700) are both in the headlines today with major new deals, spotlighting their growing need to stay in the news to remind investors why they are valued so high. The larger of the 2 news bits has Alibaba planning to raise a hefty $8 billion through a bond offer, while the other has Tencent in a major new tie-up with Warner Music, one of the world’s top record labels.
I was mostly impressed by the sheer size of Alibaba’s bond offer plan, which is easily the largest I’ve seen by a Chinese Internet company. Tencent launched its own $5 billion bond program earlier this year, but has had to offer the notes in several tranches due to the huge size. (previous post) Baidu raised its own $1.5 billion in a bond offer 2 years ago, and in June announced plans for another major offering without specifying any specific fund-raising targets. (previous post) Read Full Post…
Bottom line: An anti-corruption crackdown at Baidu is in line with a national campaign, but is unlikely to allay suspicion that the company manipulates search results to benefit itself and advertisers.
Baidu campaign snares 5 for corruption
A new report on an anti-corruption operation that snared 5 workers at Internet search leader Baidu (Nasdaq: BIDU) caught my attention for a number of reasons. At the broadest level, this campaign casts a spotlight on the kind of corruption that is rampant at many Chinese companies, where employees often use their position to earn extra cash by accepting bribes from people they do business with.
The bust is also the latest sign that private companies are joining the growing national anti-corruption campaign led by President Xi Jinping. Last but certainly not least, this move casts a spotlight on some of the less-than-transparent things that Baidu does to earn money from advertisers, who are often eager to pay extra to see their names appear high on search result lists. Read Full Post…
The headlines are buzzing today with news about newly listed Alibaba (NYSE: BABA), led by word that the e-commerce giant may explore an electronic payments tie-up with global gadget leader Apple (Nasdaq: AAPL). I’ll be quite frank and say that such a tie-up would seem destined for disaster, based on the previous experience between Alibaba and Yahoo (Nasdaq: YHOO), its only other major partner in a similar past tie-up.
Meantime, Alibaba has also announced a spin-off of its fledgling online travel business, posing the interesting possibility of some major acquisitions as it tries to quickly expand the unit and also presenting a challenge to sector leaders Ctrip (Nasdaq: CTRP) and Qunar (Nasdaq: QUNR). Lastly there’s the largely technical news bit that Alibaba’s stock broke through the $100 mark for the first time in the latest trading session, putting it nearly 50 percent above its IPO price, as investors eagerly await the company’s maiden earnings report set for next Tuesday. (earnings calendar) Read Full Post…
