UPDATE 1-China’s Alibaba Group may rethink Yahoo ties

* Alibaba Group may review ties with Yahoo – spokesman

* Clash comes after Yahoo HK exec says may expand into China
(Adds details)

SHANGHAI, Sept 9 (BestGrowthStock) – China’s Alibaba Group said on
Thursday it may re-evaluate its relationship with its largest
stakeholder Yahoo Inc (YHOO.O: ), after a Yahoo Hong Kong executive
was quoted as saying the firm may compete in the mainland online
advertising market.

Alibaba Group, which is 40 percent owned by the U.S. giant,
owns China’s largest business-to-business e-commerce website
Alibaba.com (1688.HK: ) and its largest consumer e-commerce website
Taobao.

Yahoo has no direct presence in China and prefers to be
represented on the mainland by its Alibaba Group relationship.

But Yahoo does conduct its own direct business in Hong Kong
through its Hong Kong subsidary, Yahoo Hong Kong.

Yahoo Hong Kong’s Managing Director Alfred Tsoi Po-tak was
quoted by the South China Morning Post on Monday as saying the
firm was thinking of luring online advertisers from the mainland
to advertise on the site.

Tsoi said Yahoo HK would like to attract mainland small and
medium enterprises keen to advertise online.

Alibaba.com also considers small and medium enterprises as
its main customers.

Such a move could put Yahoo Hong Kong, the territory’s
leading portal, in direct competition with Alibaba Group’s
subsidiaries, such as Alibaba.com.

“If Yahoo begins to compete with Alibaba for customers in
China, we will have to re-evaluate our relationship with Yahoo
further in light of this activity and the intentions it implies,”
said Alibaba Group’s spokesman John Spelich.

This statement is the latest in a series of clashes between
the two firms. Earlier this year, Alibaba called Yahoo reckless
for the latter’s comments that it would stand by Google after
Google threatened to pull out of China. [ID:nTOE60F019]

Yahoo also sold its stake in Alibaba.com late last year,
surprising Alibaba executives near their 10-year anniversary.

Yahoo could not be reached for comment.

Yahoo folded its search business and invested $1 billion in
Alibaba Group in 2005 in exchange for the 40 percent stake. It is
believed that Alibaba wants Yahoo to sell its stake in the group,
but Yahoo has said publicly it views its now multi-billion dollar
stake in Alibaba as a key investment in China.
(Reporting by Doug Young and Melanie Lee; Editing by Jacqueline
Wong)

UPDATE 1-China’s Alibaba Group may rethink Yahoo ties