) is set to shut its music service in China on Jan 20, 2013.
Therefore, Chinese customers will no longer avail the service in
the country. The company said that the move was designed to
streamline its operations.
Yahoo has been disposing off its assets in China. Chinese
e-commerce firm Alibaba Group Holding Ltd runs Yahoo China, and
the Sunnyvale-based company now owns a 23.0% stake in Alibaba.
Earlier, Yahoo sold part of its share in Alibaba for $7.6 billion
with the intention of using the proceeds to acquire new
Yahoo has been actively restructuring its operations over the
past year. Yahoo will close down its Korean offices by the end of
fiscal 2012. Since 1997, Yahoo has been doing business in Korea.
However, the Korean operation was facing incremental challenges
from local start-up Internet companies that were providing
services at cheaper rates.
) also appears to be withdrawing from China, as it has closed
down both its shopping search and Music Search services in the
country. Google has been battling against stringent Chinese
government's censorship laws. Thus, failing to find a favorable
platform in China, Google decided to transfer its resources to
other areas instead.
The Chinese online market is now dominated by local player
) which holds 73.0% market share followed by Qihoo that gets
10.0% of the traffic. Google holds the fourth place with 5.0%
traffic, while Yahoo has a paltry 0.25%. Thus, it makes sense for
Yahoo to leave the online music market in China.
In the third quarter of fiscal 2012, Yahoo reported revenue of
$1.20 billion, which was down 1.3% sequentially and 1.2% year
over year. TAC costs were down 17.7% sequentially and 22.2% from
last year. Excluding these costs in all periods, net revenue was
essentially flat on a sequential basis and up 1.6% from last
year, in line with the consensus estimate.
Yahoo, Baidu and Google all have a Zacks #3 Rank, which
implies a Hold rating in the near term.
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