While Google V/S China is the big fight that has the entire internet world riveted, there is an interesting side story that could be developing.
Yahoo and AliBaba on the rocks?
Following cyberattacks aimed at accessing accounts of Chinese Human Rights Activists, Google announced on its blog that it would stop filtering its search results in China. Keeping the big picture in mind and perhaps in the hopes of winning some good will in the West, Yahoo stated that it was ‘aligned’ with Google. It went on to echo the sentiment that the attacks were ‘deeply disturbing’.
These words, however were not received too kindly by AliBaba, Yahoo’s partner in China. The AliBaba Group, which holds a majority in Yahoo China, issued a statement saying “Yahoo’s statement that it is ‘aligned’ with the position Google took last week was reckless, given the lack of facts in evidence”. Perhaps they assumed that Yahoo also endorsed the insinuation that the Chinese Government may be involved. Yahoo, though, clarified that their statement was targeted at the cyber attacks. Since then both companies have been silent on the issue.
Some have implied that Google’s decision to pull out from China may also have a fair bit to do with economics given that it has roughly 30% of the search market share in China. Between filtering results for China, facing heavy criticism back home and fighting an uphill battle to gain market share, American companies have always had to face a difficult time in China. A situation that Yahoo had recognized as early as 2005. This resulted in a deal that saw Yahoo handover all its Internet operations in the country to AliBaba in exchange for a 40% stake in the company.
Relations between the two companies have been on the decline as Yahoo China’s search market revenue has steadily declined from 21% in 2005 to less than 1% in the final quarter of 2009. Yahoo CEO, Carol Bartz even expressed her disappointment at the way the Yahoo brand was handled by AliBaba.
While this ‘side story’ is unlikely to spiral out of control and have an immediate effect on the partnership, it could certainly affect their long term relationship!
Yahoo was attacked too!
In it’s reaction to the Data Theft in China Google had mentioned that 20 other companies were targets of these cyber attacks too. One of these companies was Yahoo! A source, demanding his/her identity to be kept secret, revealed that Yahoo was aware of these attacks even before Google approached them to discuss the matter. Unlike Google, however, Yahoo has decided to maintain its silence on the issue.
It is unclear what the nature of the attack on Yahoo was. Some suspect that the yahoo mail servers were a target. No luck confirming anything from Yahoo though. They just released a statement saying – ‘Yahoo does not generally disclose that type of information, but we take security very seriously and we take appropriate action in the event of any kind of breach’
The interesting thing to note here that none of targeted companies other than Google, have threatened to shut shop in China. Perhaps it is just too big (or going to be) to ignore! No one can predict for sure how this saga will unfold, but one thing is for sure -Google or not, The Great FireWall of China is not going anywhere!!
Yahoo is just mad anybody would try to bypass their pay-for-data system already in place. Maybe if Yahoo said they would also remove themselves from the China market, these official statements from them could be taken seriously. As it is now, their 40% investment in Alibaba is probably making out very well from this Google fiasco, despite the tensions their “me too” claims have caused. Also, it was proven that no “court order” was sent to Yahoo to provoke them into turning in dissidents in China. It was a simple letter of request by that communist government. The same technique can be used to gather the info Yahoo collects on all of us, given authorities are willing to pay the prices Yahoo charges for that kind of service. One day, the truth may come out about how Yahoo has been providing the FBI and others with user info, like the phone companies have illegally (and for a fee) over the past several years now. Maybe then people will realize how little Yahoo really cares about security or privacy, just like those overly trusting chinese dissidents they handed over to Beijing at the drop of a hat.
“A source, demanding his/her identity to be kept secret, revealed that Yahoo was aware of these attacks even before Google approached them to discuss the matter.”
A source that has claimed this directly to you or to someone else who you are referring to?