Yahoo China Stopping Email Services: Owner Alibaba Eager To Hand Operations Back To Yahoo, Offering Replacement With Its Own Aliyun Email

on April 18 2013 2:29 PM
Ma And Rosensweig
Happier times: Alibaba Chairman Jack Ma shakes hands with Yahoo COO Daniel Rosensweig in 2005 when the deal with Yahoo China was made. Reuters/Claro Cortes IV CC/TC

China's Alibaba, an e-commerce giant, is advising users of its troubled Yahoo China service that it will shut down in August and offer as a replacement its own email service called Aliyun. 

Alibaba on Wednesday advised users of Yahoo China, whose accounts have been hacked numerous times lately, that in preparation of the Aug. 19 shutdown of the service they should register for an email account with Aliyun, which is Alibaba's own email platform.

Alibaba also plans to return Yahoo China to its original American parent company, Yahoo Inc. (Nasdaq:YHOO), next month, according to Sina Tech.

The problems with hacking into Yahoo China accounts has continued despite Yahoo recently providing two independent patches for security breaches.

“We are working hard to protect our users and their data,” a Yahoo spokesperson said regarding the problem. “We hope our users can change their passwords frequently and use different passwords for each website.”

Alibaba acquired Yahoo China in August 2005 when Alibaba sold a 40 percent stake in itself to Yahoo, which in exchange for that stake gave Alibaba Yahoo China and $1 billion. At the time, the market thought it was Alibaba who had gotten the better bargain, according to dfdaily.com.

Alibaba's decision to return Yahoo China to its original American parent is but one more blow to add to Yahoo’s increasingly bleak outlook. In the five years leading up to the end of 2012, Yahoo’s share of the U.S. display-ad market fell from 18 percent to 9 percent, according to market research company eMarketer. It may continue to fall to 7.7 percent this year. During the same five-year period, Google’s share increased from 2.9 percent to 15 percent, while Facebook leaped from 0 percent to 14.6 percent.  

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