Yahoo will close by August 19 its email service in China, according to an announcement made yesterday by the American company.
The email service users of Yahoo’s subsidiary in China must register with AliCloud, belonging to the Chinese company Alibaba, to prevent their accounts to be deleted. Yahoo officials announced that the company will provide its users a few options to make this transition as smooth as possible and Chinese Yahoo users will have four months to move their e-mail accounts.
The decision was made as the Yahoo Mail service share in China dropped in favor of local companies that provide e-mail services. Also, the news portal Yahoo China has powerful rivals much more popular, such as QQ, Sina and Sohu, according to South China Morning Post.
Yahoo group’s decision to close the e-mail service in China comes after, in September 2012, Alibaba Group China has completed the acquisition of half of the 40% stake held by Yahoo in the Chinese company. The deal, worth $7.6 billion, was part of an agreement that allowed the Chinese e-commerce giant to redeem the remaining shares held by Yahoo.
Yahoo received for the 20% stake transferred to Alibaba $6.3 billion and preferred stock of $800 million. This amount was added to another $550 million for changes in companies’ licensing agreement.
The Chinese company, which reached an agreement in May 2012 with Yahoo for the acquisition of shares, has de-listed, as a result of purchases of $3 billion in June 2012, the e-commerce platform Alibaba.com. Yahoo has taken the 40% stake in Alibaba in 2005 for $1 billion and the sale of Yahoo operations in China to Alibaba Group.
Chinese Billionaire Jack Ma and Alibaba have tried since 2010 to buy back its stake from Yahoo. The relationship between the two companies was strained due to several differences which started from Yahoo’s position to support Google in the dispute between online search giant and the Chinese government regarding the Internet censoring.
Yahoo’s management was criticized by shareholders in recent years for failing to take strong measures to revive the online advertising revenue decline after the rise of rivals Google and Facebook. In this regard, the majority of proceeds from the transaction with Jack Ma was supposed to benefit Yahoo shareholders.
Yahoo’s Asian assets – its stake in Alibaba and the 35% package 35% in Yahoo Japan controlled in partnership with the telecom group Softbank Corp – were considered by the specialists company’s most valuable holdings.
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