Chapter 5 Taking over Yahoo China made Jack Ma the most expensive mistake ever

But why is it said that Jack Ma has received a US$1 billion investment and a "dowry" like Yahoo China at the same time, but it will become the most expensive mistake Jack Ma has made? This is because in the few years after he took Yahoo China, not only did Yahoo China not get better, but it got worse, became less and less important, and became a weak point of Alibaba Group. When Ma Yun bought Yahoo China back then, he must have wanted to get something from Yahoo.So what does Yahoo have? Yahoo has many things. First, Yahoo has a very good portal experience; second, Yahoo started off with search; third, Yahoo’s mailbox is still very good; fourth, Yahoo launched an IM product that year, which is an instant messaging product. It was called "Yahoo Messenger", and it was also a top-ranking product in the United States at that time.

At that time, Ma Yun must have thought this way: "I am engaged in e-commerce, and e-commerce is just a platform, so where does my traffic come from? The traffic needs to be imported from the whole society other than the e-commerce platform. Then portals, search, mailboxes, IM, They are all good ways to import traffic, so my acquisition of Yahoo China is a particularly good business. Moreover, Yahoo China has a lot of experience in international operations. We can bring the experience of the United States and Japan to China, which can help Ali. Baba's growth helps China's e-commerce grow."

Why did Jack Ma's wishful thinking fail?What are the reasons for Jack Ma's failure to integrate Yahoo China?There are probably three reasons. First, business integration is out of focus.Yahoo has portals, search, mailboxes, and IM. When all these things come to Alibaba at once, "Alibaba" will ask: "Which one should I get first?" These businesses of Yahoo China need to be integrated with Alibaba.But in 2005, Alibaba already had its own email products, strategic search products, and its own IM system, all of which were available.So how to integrate these "natural sons" of Alibaba with the business from Yahoo China has become a very difficult problem.For a long time, the business integration between the Yahoo team and the Alibaba team has not been completed, and it can even be said that it has never found a focal point.

Second, Yahoo China's business is difficult to integrate with Alibaba's business.then what should we do?Can Yahoo China develop independently?For this reason, Alibaba sent many important executives for a while, and once even sent its "chief of staff", who is the most theoretical person among the executives of the entire Alibaba Group—Zeng Ming, to Being the president of Yahoo China doesn't work either.He presided over several transformations of Yahoo China, first positioning itself as a news portal, and later focusing on search.When the community consumption industry started, an individual within Ali went out to start a business and established Koubei. Jack Ma also acquired Koubei and bundled Koubei and Yahoo China together, hoping to form a business module, but later there was no such thing. success.Therefore, when the business modules of Yahoo and Alibaba could not be integrated, and Jack Ma hoped that Yahoo could develop independently, although he tried many transformations, he failed in the end.

Third, the team runs in.Yahoo is an international team. In 2003, Yahoo acquired Zhou Hongyi's "3721" and asked Zhou Hongyi to be the president of Yahoo China. However, Zhou was very uncomfortable and made a lot of noise for more than a year. Later, Alibaba acquired Yahoo China. The conflict was transferred to the Ali team and Zhou Hongyi's team.What's going on between them?It was so troublesome that Yahoo publicly condemned Zhou Hongyi, who had resigned, on the homepage.It can be seen that the running-in between the two teams was very difficult at that time. To give another example, when Alibaba just acquired Yahoo, it once took the entire Yahoo team and a few carloads of people to Hangzhou, hoping to instill Alibaba's corporate culture into these people.But what about the result?Also very failed.

This superficially glamorous merger and acquisition case produced two big bitter fruits in the end: The first bitter fruit is that since then, Ma Yun has lost control of Alibaba in the sense of equity, and 70% of the equity has been given to Masayoshi Son and Yahoo. The second bitter fruit is that Yahoo China, the dowry of the year, turned into a big chicken rib of Alibaba Group in the end. By 2012, Jack Ma wanted to regain Alibaba's dominance in capital - after gaining dominance, it could go public as a whole.In order to gain this dominance, a very big battle took place between Alibaba and Yahoo.In the end, Alibaba spent US$7.6 billion to get back 21% of Yahoo’s shares. At that time, it gave up 35% of the shares and raised US$1 billion. Now it spends US$7.6 billion, but only got back 21% of the shares.

So we say, this is a very expensive mistake made by Jack Ma. Jack Ma once said in September 2011, he said: "We did make a lot of mistakes on Yahoo China, but if we go back to the past, would we still buy 'Yahoo China'? Yes, we still Will buy! But will we do it this way? No, we won’t, we will use a smarter method. I don’t have any experience in mergers and acquisitions, especially mergers and acquisitions of Internet companies. I think Internet companies should think about it now , what can we learn from what happened at Yahoo. If we don’t learn from the mistakes of others, sooner or later we will be challenged in the same way.”

There are two meanings in this passage. The first meaning is that Ma Yun made many mistakes in the process of acquiring "Yahoo".The second meaning is, if you go back to the past, will Ma Yun buy Yahoo?He said that we would still buy Yahoo, but in a smarter way. In fact, there is a very good question that is worth thinking about, namely: If we go back to August 2005, is there really a smarter way for Alibaba and Jack Ma to buy Yahoo?Jack Ma's opponent, Jerry Yang of Yahoo, is also a Chinese entrepreneur with the highest IQ in the world, so Jack Ma is dealing with a smart person.When Ma Yun uses a smarter method, will the other party have a smarter countermeasure?

So, business is a very interesting game, you can never go back to the past.But one thing seems certain, that is: in the business world, the free lunch is often the most expensive!