Yahoo! in China: Local Problems for the Global Internet Giant

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:


Case Code : BSTR260 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Shipping & Handling Charges extra


Business Strategy | International Expansion Strategies
Case Length : 18 Pages
Period : 2000-07
Pub Date : 2007
Teaching Note : Not Available
Organization : Yahoo!
Industry : Internet and e-Commerce
Countries : China


This case is about the challenges faced by Yahoo! Inc. (Yahoo!), a leading international Internet portal, in the Chinese Internet market. Yahoo! was one among the first few international companies to enter the Chinese market.

Even though the company modeled its Chinese portal on the lines of its globally successful portal, it failed to attract the Chinese consumers.

Yahoo! also found itself in tough competition with local Internet firms like Sina Corporation (Sina), Inc. (Sohu),, etc. Yahoo! even lagged behind arch-rival Google Inc., in the online search market in China.

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The complexity of the Chinese language, the inability of foreign companies to understand local culture and preferences, and rigid government regulations were also other factors that affected Yahoo!'s performance in China. Recognizing the need for having a local player who was more attuned to the needs of the local customers, Yahoo! handed over the management of its Chinese operations to the Alibaba Group, in 2005. The case discusses the strategies adopted by Yahoo! China to increase its market share and the future challenges faced by the company in the highly competitive Chinese market.


  Understand the problems in the business model of Yahoo!

  Examine the strategies adopted by Yahoo! to improve its business operations in China

  Understand the business environment in China from the point of view of a foreign Internet company.


  Page No.
Introduction   1
Background Note   2
The Chinese Internet Market   3
Yahoo! in China   5
Yahoo!'s Problems in China   6
Future Outlook   8
Exhibits 10


Yahoo! Inc., China, Internet,,, Google Inc., Jack Ma, Alibaba Group, Online Search Market, Localization, business-oriented search engine, eBay Inc, China Internet Network Information Center, Music Download, Chinese Youth , e-commerce, Online auction, Government Regulation, Music recording industry, Terry Semel, Panama interface, Yahoo! Go.

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