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Business News/ Industry / Yahoo sees Asia growth, committed to Alibaba
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Yahoo sees Asia growth, committed to Alibaba

Yahoo sees Asia growth, committed to Alibaba

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Seoul: Yahoo Inc expects its business in Asia to grow in the coming year and to increase its market share if the overall economy continues to recover, a senior executive told Reuters on Wednesday.

The No. 2 US Web company expects its Web search partnership deal with Microsoft Corp to help it focus on investing for growth, Rose Tsou, managing director for Asia, said in an interview in Seoul.

“(The Microsoft deal) will free up lot of resources for Yahoo to invest in...areas from Web services to mobile experiences to display advertising."

In Asia, Yahoo posted “modest growth" in sales in recent quarters, helped by strength in areas such as sponsored search, Tsou said. By contrast, Yahoo’s overall business suffered a 13% revenue drop in the second quarter from a year earlier as advertisers remained tight-fisted.

“There is a fair chance that we will grow in the coming year or so if the economy doesn’t get worse," she said. “Given our strength, we really think Yahoo is well poised to take more share when the economy comes back."

Yahoo, which trails market leader Google Inc and also faces competition from social networking sites such as Facebook, is in the midst of a turnaround aimed at building a more consumer and advertising-focused brand.

On Tuesday, it said it would kick off a $100 million global branding campaign.

“After the (Microsoft) deal closes, our search backing infrastructure will be migrated to (Microsoft’s new search engine) Bing, but there are lots of search user experiences (where) Yahoo can continue to innovate," Tsou said.

She added that content services such as news, finance, sports and entertainment were “priorities."

Tsou said the company would “smartly invest in unique opportunities" in each market, taking the example of its robust e-commerce business in Taiwan. Yahoo expects 20-30% growth in the Taiwanese e-commerce sales this year, she said.

But Tsou said Yahoo had no current acquisition plans. “We don’t have any new shiny object that we are chasing."

Yahoo made an early foray into Asia to build a solid position and has 172 million unique users in Asia Pacific as of June along with dominance of the region’s online advertising market.

Online advertising, which accounts for only 10-15% of the overall advertising industry, has “huge room to grow" as people spend more time on the Internet, Tsou said.

Yahoo is the top player in Japan through its stake in Softbank-controlled Yahoo Japan Corp and also ranks No.1 in Taiwan and Hong Kong. But in other markets, Yahoo faces tough competition with home-grown rivals — Baidu Inc in China and NHN Corp in South Korea.

In China, the world’s biggest Internet market by users, Tsou said Yahoo remained committed to its existing partnership with Alibaba Group, after it sold a small stake in China’s top e-commerce company Alibaba.com earlier this month.

Yahoo still holds a 40% stake in the unlisted parent Alibaba Group, to which it handed over exclusive rights to the “Yahoo China" brand.

“Yahoo will not have a separate plan outside Alibaba in China," Tsou said.

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Published: 23 Sep 2009, 11:19 AM IST
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