Yahoo’s exit from Chinese mainland is result of its own business failure: experts
Published: Nov 02, 2021 09:58 PM
A Yahoo billboard stands at a wealth-management exhibition in Shanghai. Yahoo realized $272 million in profit in the fourth quarter of 2012, down 8 percent year-on-year, while its revenue was up 2 percent  in the same period, reaching $1.35 billion, the company said Tuesday. Photo: CFP

A Yahoo billboard stands at a wealth-management exhibition in Shanghai. Photo: CFP

US web services provider Yahoo has terminated its services to users based in the Chinese mainland starting from Monday, in a move that experts say is driven by its own business failure and has nothing to do with China's business and legal environment. 

In a statement emailed to the Global Times, the company citied "the increasingly challenging business and legal environment in China" as its reason for exit. Yahoo's exit also prompted criticisms in some foreign media outlets about China's business and legal environment for foreign firms. 

However, such assertions are refuted by Chinese internet and legal experts, who attributed the US company's failure to its poor competitiveness in the Chinese market.

In the age before Google, Yahoo was the world's top search engine provider. It opened its Chinese website in 1999 and was acquired by Chinese e-commerce giant Alibaba in 2005.

Liu Dingding, a Beijing-based independent tech analyst, told the Global Times on Tuesday that Yahoo's influence and market share had been reduced to "negligible levels" even five years ago.

"Now, what happened to the internet services provider is no longer important," Liu said. 

Yahoo left China on the same day as a highly anticipated Personal Information Protection Law came into effect, as China beefs up a comprehensive legal framework on information protection, corporate data compliance and China's digital economy.

It also came less than one month after LinkedIn, a networking site owned by Microsoft, announced termination of a version of its app in China and instead said it would launch a new job board app called InJobs later this year.

Li Junhui, a professor at the China University of Political Science and Law, told the Global Times on Tuesday the more complete legal framework in China governing internet services will mean more stringent requirements for internet services providers, but Yahoo's demise in China "is more likely the natural consequence of its business failure."

The new law has a limited impact on internet news portals, so the timing of Yahoo's departure is probably pure coincidence, Li said.

According to industry website, the mainland search engine market is dominated by Baidu Inc, which has a share of 85.41 percent. 

Sogou ranked second with 5.19 percent and Microsoft's Bing had 3.35 percent. 

Liu said that when companies make plans for market expansion or withdrawal, they usually choose a calendar month.

China was the world's second-largest digital economy with a scale nearing $5.4 trillion in 2020, trailing the US, according to a white paper from a government-backed institution showed in August. But the lucrative market is also fiercely competitive.