Yahoo! Plans To Increase Investment In Chinese Web Commerce Giant Alibaba

Yahoo!, in an effort to establish a greater presence in the Chinese online market, is planning to purchase a 10-percent block of stock shares in China’s largest online commerce company, Alibaba, in a sale arranged by the Asian giant. The move is being viewed as something of a responsive measure made to counteract Google’s increased involvement in the Chinese market. In the past, Google created headlines worldwide as a result of its involvement with the reigning megalith of the continent, Baidu.

While it should be made known that Yahoo! currently has invested a 40 percent stake in Alibaba Group, the overseer of numerous operations, including Alibaba.com, the company’s stated intentions to increase its share shows its desire to stay above its American rival where Chinese commerce is concerned. (Google has already grabbed itself a greater slice of the search market in China than Yahoo! – 21% and 12.5%, respectively.)

Alibaba’s growth is strong, and with China’s Web-connected population expanding at a rapid rate year after year, there’s no deny the nation’s important position as a place for many tech giants originally based in the West to continue their upward trajectory.

Soon China will surpass the US and become the largest single population of Internet users in the world (though percentage-wise, the country is far behind most Western nations; roughly half of 300 million US citizens are connected, while China charts just north of 150 million total users among a total population of roughly 1.3 billion), and those users will be seen by many Web business big and small as the new land of moneymaking opportunity.

Yahoo! and Google - as well as Microsoft and many other stalwarts, veterans and upstarts – recognize the potential of the Chinese market, and are proceeding to make investments there to secure their interests. It only makes sense to do so. As China’s middle class expands – barring any radical shifts in policy and so forth – every entity invested in its online market is likely to benefit.

The moves by Yahoo! and Google in China as of late are strategic, plain and simple. Nothing more, nothing less.