BEIJING - Nearly 100 Beijing-based employees of China Yahoo have reportedly resigned after Alibaba Group, the company's primary shareholder, demanded that they transfer to the group's Hangzhou headquarters or face redundancy.
The event comes one day after news broke of Alibaba’s intentions to shift Koubei.com, a classified listings site, from Yahoo China to auction site Taobao.com.
According to local reports, employees working in China Yahoo’s content department made their decision after the Group began a restructure of its operations, putting emphasis on its Hangzhou headquarters.
John Spelich, vice-president of Alibaba Group’s international corporate affairs, could not confirm the rumours of the employee departures.
"This is typical of the dislocation that occurs when companies undergo reorganisations like this. We do try to make it so that all of those affected have the opportunity to take another job in the company, and unfortunately that might mean a relocation,” said Spelich.
Spelich additionally discussed the company’s decision to transfer Koubei’s operations into Taobao.
"Taobao had been rapidly growing and when you look at what’s happening, it’s strategically fitting that we elect to inject Koubei into Taobao,” he said. "We have something called the "Big Taobao Strategy" where we look at how to take an e-commerce platform and inject it with added capabilities. Earlier this year we launched a social networking component called Tao Jiang Hu that has been compared to Facebook. Like this, Koubei has a long-run strategic benefit for customers and shareholders.”
Alibaba purchaed Koubei.com a year ago. "We said, ‘Let’s see what happens if we pair this with China Yahoo’, and we gave that a run for about a year,” Spelich continued. "And the fact of the matter is that Koubei is much better suited to be within Taobao.”
Yet others in the market suggest the transfer of staff and subsidiaries from China Yahoo indicate the portal’s weakness in the market.
Spelich added that Alibaba is focusing on avenues that will differentiate Yahoo China from its competitors and will allow it to boost its profile in the market, namely through a focus on entertainment.
"We’ve hit upon a strategy to help China Yahoo differentiate itself from others and standout in a toughening sea of competitors," he said. "China Yahoo is going to remain what it started as without Koubei, which is a portal with email and search. We’re also looking to offer enhanced entertainment content to help China Yahoo differentiate itself outside of competition from search and other areas."
But Miranda Chen, senior analyst at Maverick China Research, said: "Chinese often refer to China Yahoo as ‘jilei’ (‘chicken ribs’), which describes something that has no real purpose of value. Alibaba acquired China Yahoo primarily for its search technology and not as a general portal - Sina, Sohu and others were already too strong. But Alibaba never gave the company a clear purpose."
She added: "The decision to combine Yahoo China and Koubei, and now to move Koubei into Taobao, is more evidence that Alibaba still hasn't figured out what to do with the company."
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