Yahoo! Asia top exec calls it quits

Yahoo! Asia's top exec has resigned, raising concerns about the company's Asia strategy

By Kristie Lu Stout
CNN.com Writer

HONG KONG, China (CNN) - Yahoo! Asia managing director Savio Chow has resigned, raising concerns and industry rumblings about the company's Asia strategy.

The announcement comes just one day after the managing director of Yahoo! Europe , Fabiola Arrendondo, announced her resignation.

Dependence on online advertising as well as tough competition with homegrown portal players has beleaguered the Internet blue chip's Asian operations.

Some industry insiders attribute Chow's resignation to Yahoo!'s slumping stock price, others to his own dismal performance.

QUOTE "From an analyst perspective, I would have fired him a year ago." - Hong Kong-based Internet analyst

"From an analyst perspective, I would have fired him a year ago," says one Hong Kong-based Internet analyst.

More traffic from China

Past research from the China Network Information Center indicated that the Yahoo! U.S. Web site has continually posted more traffic from China than its localized versions yahoo.com.cn, yahoo.com.hk or yahoo.com.tw.

Beijing-based Sina.com and other homegrown portals such as Netease and Sohu.com have managed to keep a strong grip on the mainland market of 20 million surfers, a market that Yahoo! is still struggling to conquer.

Yahoo! ranked as the seventh most popular Web site in the NetValue survey, and sixth according to Iamasia.

However, the local Chinese sites are now accounting for an increasing proportion of Yahoo!'s traffic.

"In China, of the 2 million home users who went to a Yahoo! site in December, 1.3 million went to cn.yahoo.com. The share is almost 64%," says Steve Yap of the Internet measurement firm Iamasia.

Strong audience for local sites

"Most people who went to the localized sites also went to the main U.S. site. They have managed to build an audience for their local sites."

The acquisition of Kimo, Taiwan's leading portal, for $145 million in stock last November also helped to strengthen Yahoo!'s standing in the region.

U.S. Internet analyst for Merrill Lynch Henry Blodget said that the acquisition would bolster Yahoo!'s position in Taiwan, where it was ranked 5th or 6th, and ultimately, mainland China.

Though Yahoo! has been historically struggling in the Greater China market, the portal company has flourished in Japan.

Japan is Asia's only promising online ad market

Japan is the only promising online advertising market in Asia, representing $32 billion of the total $44 billion advertising pie in Asia for 1999.

"Basically Asia is just Japan. Take that out, you are left with $12 billion in eight to ten markets," says ABN Amro Internet analyst Jahanzeb Nasser.

Yahoo! Japan started operations in April 1997 and has been continually profitable since July 1997.

As the Managing Director of Yahoo! Asia, Savio Chow did not participate in the company's dealings in the Japan market.

Chow "unable to effectively leverage Yahoo!'s strengths"

Analysts say that Chow was not able to effectively leverage its parent's strengths in technology -- like Yahoo! Pager, Yahoo! Messenger, or Yahoo! Net Telephone -- for the local market.

Some even go so far to call Chow an opportunist who was "in the right place at the right time."

"He jumped in at an opportune time. He was hired for his resume, not his skills for a new media product," says one analyst.

Sina ranks as top China portal
February 1, 2001

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