Alibaba Moves Kaube to Taobao.com - From Yahoo China Brand to Taobao

HONG KONG - Alibaba.com Ltd.'s, one of the b2b marketplaces shares were higher in Hong Kong trade Monday 24,Aug 2009, after its parent group announced a restructuring of its China Yahoo business. China's Alibaba Group, which controls Yahoo China, dropped the Yahoo brand and integrated it with booming auction platform Taobao.com.

Alibaba has separated Koubei.com, a classified-listings Web site, from China Yahoo and would transfer the unit into its c2c Web site, Taobao.com. According to Alibaba strategy, it is all to strengthen the C2C website, Taobao.com and reduce the cost.

The Koubei listing service was already merged with China Yahoo in June 2008 as part of an effort to revamp the website.

According to Alibaba Group the asset transfer was intended to maximize its value within the group and was made with the interests of all stakeholders in mind.

"We believe that the Koubei is going to be an additional asset to our Taobao.com platform," said John Spelich, Alibaba Group's vice president of international corporate affairs.

According to The Wall Street Journal, the move has strained relations between Alibaba and U.S.-based Yahoo and has caused a potential setback for China Yahoo.

Carol Bartz, Chief Executive of Yahoo, reportedly told Alibaba executives earlier this year that she was disappointed with the way the group has handled the Yahoo brand in China, the Journal reported.

Since 2005 share value of China's Internet search market firm China Yahoo is in steadily decline. It was a time when Yahoo paid $1 billion for a 39% stake in Alibaba Group and handed over transferred control of China Yahoo.

But Spelich said Yahoo has been a beneficiary of Alibaba Group's rising fortunes, with its original investment now estimated to be worth $3.6 billion.

"What's good for Alibaba is good for Yahoo, because Yahoo is our largest minority shareholder," Spelich said, adding that the U.S. Internet giant would still benefit from Koubei in its new place within Taobao.

The listing function of Koubei will fit better as part of Taobao than as part of China Yahoo, the spokesman said. Taobao, which lets users sell items through online stores or auctions, reported a transaction volume of 80.9 billion yuan (US$11.8 billion) in the first half of 2009, nearly double the figure from one year earlier. Registered users on the Web site also doubled during that period.

In August 2009, Alibaba.com acquired Alisoft's business management software division from the parent company for CNY208m ($30.5m) and integrate it into its Information Technology Business division. The restructuring was part of Alibaba.com's drive to transform itself from 'Meet at Alibaba' to 'Work at Alibaba' to offer small businesses tools to manage operations online.