Yahoo announces closure of Beijing Research Center to see Yahoo's decline

From Yahoo North Research center close look at the source of decline and foreign companies withdraw China

March 18, Yahoo officially announced that it will close more than 300 employees of the Yahoo Beijing Global Research and Development Center. According to people familiar with the matter, after the closure of the Yahoo Beijing Global Research and Development center, the departing staff will receive "n+4" compensation, and a small number of employees may be transferred to the United States headquarters to continue the research and development work.

Once the news, they quickly boarded the main media home. For Yahoo, the situation is a bit lonely. This once excelled portal giant, in recent years often appear in the public view is inseparable from the "Shutdown Service", "exit the regional market", "big layoffs" and other topics.

So the question is, how does Yahoo decline? Why is it so difficult to rebuild and revive? On the backdrop of the global technology giants withdrawing from China, Yahoo is still a tortuous Chinese practice, what can be used as a reference for later?

Yahoo's decline stems from failure to seize industry opportunities

Until today, Yahoo in people's impression is still a portal site. The company, founded in 1994 by Chinese Jerry Yang and his classmate David Fello at Stanford University, was once a pioneer in the era of portal. But now, more than 20 years later, Yahoo has not torn away the door tag, have to say is a failure.

If an enterprise wants to be evergreen, it must follow the needs of the times and discard the business in the fading period to find new growth points. Especially in the Internet this rapid industry, achievements and crises often depend on each other, only in their own field in the absolute monopoly of enterprises can temporarily escape competition.

Yahoo started on the portal, but was slow to respond when the search arose, giving Google a chance to catch up. While Yahoo made up in 2003, the acquisition of Inktomi became an important Google competitor in the search field. But the second spring is very remote, search has not become a new pillar of Yahoo.

After missing the search market boss, Yahoo in the electric business, video, social networking, games, micro-blogging and other times the rise of a few achievements, leading to its increasingly marginalized.

2012, the former vice president of Google Marissa arrived, as Yahoo CEO, so that the outside world to see a lot of hope, Yahoo also began a long "buy and buy" road.

Mayer's constant takeover strategy is right. She has always been very aware that Yahoo alone research and development products can not grasp the pulse of industrial change, for the elephant, the lack of funds at that time, the rapid distribution of new industries with capital is the most simple and effective way.

According to statistics, Mayer has acquired more than 50 companies after taking power, including more successful social networking sites Tumblr, as well as start-ups in areas such as light blogs, video, games, teleconferencing systems, etc. Many of them shut down business or fade away shortly after being acquired, and Yahoo is known as a "startup Killer".

Mayer repeatedly stressed, "Yahoo's future is to move, we will pursue the introduction of the product move first principle." ”

Yahoo, which spends a lot of money on both the mobile and social fronts, eventually found a mobile advertising business that could help it recover its earnings. Last year, Yahoo from the mobile end of the revenue of 1.26 billion U.S. dollars, accounting for about 27% of total revenue.

Now, video advertising and mobile advertising have become the core of Yahoo's transformational strategy. But in the eyes of the outside world, mobile advertising business is only for Yahoo "renewal." If Yahoo can't find a new growth engine in the future, the site will only shrink.

In recent years, Yahoo has been pulling out of regional markets, shutting down some services and slashing jobs. Starboard Value, an organization that buys a lot of Yahoo stocks for activist investors, has been urging Ms. Mayer to cut operating costs, and Ms. Mayer's continued concessions and cooperation show that the veteran Internet company is turning to a full-blown contraction strategy.

Today, Yahoo and the Chinese market completely said good-bye. Still unable to find the direction, rely on "buy buy" survival of Mayer can also lead Yahoo active how long, this is a problem.

Why international giants are withdrawing from China

The Yahoo China trip, on the backdrop of the international giants have withdrawn China, there is no meaning.

Yahoo China was founded in 1999, initially to provide mail, instant messaging and portal news services, but the pace of development lags far behind NetEase, Sina, Sohu, Tencent and other local competitors.

Yahoo's solution is to buy a Chinese company to help Yahoo do business. In November 2003, Yahoo spent 120 million dollars to buy 3721 of Zhou's founder. But later, Yahoo's managers and Zhou because of differences in control and management style, making Yahoo China's business into operational difficulties. After Zhou's departure, Yahoo began to look for new partners.

Jerry Yang and Ma Yun are destined. In August 2005, Yahoo invested $1 billion trillion, plus 70 million of billions of dollars in Yahoo Chinese assets, to acquire a 40% stake in Alibaba. Alibaba, of course, claims to have bought Yahoo China.

After Alibaba's listing last year, Yahoo's holdings of shares profited considerably. But Yahoo is the biggest shareholder in Alibaba's business operations, but has no control over it. After the Alipay incident, the differences between Yahoo and Alibaba surfaced.

It can be said that in the process of cooperation with 3721, Alibaba, Yahoo is completely failed, and the collapse, no longer try to plough deep into the Chinese market.

The Yahoo said goodbye to China completely, and then reminded the old topic: why do foreign companies frequently evacuate?

Like Yahoo, search boss Google also a few years ago because of the acclimatized grief and indignation. In addition, international companies such as Adobe, micro-strategy, red dot, Zynga, Nokia, Cisco and Compuware have all gone in recent years.

To comb the cause, first, China's labor costs are rising and hiring Chinese engineers is no longer attractive. Zynga left China to go to India because its labor costs are only half that of China, which is the same as manufacturing's withdrawal from China. So, in the foreseeable future, more and more technology giants will consider abandoning their factories, research and investment in China for the sake of cost.

Second, the foreign companies play is not suitable for China's national conditions. In China to do business with the government management frequently deal with, doing everything to talk about human feelings, talk about resources, climbing relations, which is far from the strength of foreign companies. Google Shing was the best example, and products such as Facebook, YouTube and Twitter were kept out of the wall. Yahoo China's early progress slow, Amazon today's tepid, ebay fail, are related to their foreign culture characteristics.

Third, foreign companies are not accustomed to Chinese-style competition. China has a large number of netizens and internet companies. A powerful army over the bridge, not only need good technology and good products, but also familiar with the market environment, master the competitive strategy, in operation with opponents. ebay lost to Taobao when it was not good enough to localize, strategic mistakes. It may not be possible for ebay to forgo commission in a smaller US market, but long-term greed is often more likely to be rewarded in a China market with an obvious scale effect. Foreign companies that do not provide free services are destined to be unpopular with Chinese.