Yahoo! Finally Shuts Down China Services

Yahoo! has finally shut down and folded up its operations in China, in what is to be an expected scenario since the company began its gradual phase out beginning with the closure of its e-mail service in August.

A check on Yahoo! China's page would open up to a farewell post that would then be redirected to now.taobao.com. Taobao is a Web site run by the Alibaba Group, which has control over the Yahoo brand in the country.

The final transition reportedly took effect on Sept 1.

Yahoo! was able to penetrate the Chinese soil when it purchased a 40 per cent stake in Alibaba in 2005 for $1 billion. The infusion automatically gave it 35 per cent voting rights being Alibaba's largest strategic investor.

But disagreements with Alibaba over how to run the business in China eventually took its toil. In a final draw in 2012, Alibaba eventually bought back half of Yahoo's 40 per cent stake for $7.1 billion, including $800 million in preferred stock. The buy-back scheme also included a "transitional license" where Alibaba can continue operating the Yahoo! brand for up to four years.

But Alibaba obviously has other plans enough to totally wipe out Yahoo! China's presence in just a year. Prior to the August email service closure, Yahoo! China's music service shut down as early as December 2012.

Simply put, Alibaba shunned Yahoo! China because it no longer finds it useful and profitable.

"China Yahoo has been under Alibaba for many years. Its most valuable properties have been dismembered and used," Beijing analyst Li Zhi was quoted by TechWorld. After all, Alibaba allowed Yahoo! to acquire it in 2005 because it wanted access to the latter's search technologies. But when Yahoo decided to use Microsoft Bing in 2009 to power its searches, Alibaba thought it best to end the partnership.

"Alibaba already has no need for a China Yahoo that's been squeezed dry," Ms Li added.