No market than China sees American Internet companies fail so terribly. Google was kicked out of China, part of it because it offended the Chinese government, part of it because it lost to its local competitor Baidu. eBay pulled out of the market voluntarily after realizing it was losing ground to Alibaba's Taobao. Yahoo!'s business barely took off in China after years of struggling and trying in China. Facebook or Twitter, even worse, never got a chance to try the market out. What's more, their domains are blocked in China.
Yahoo! struck a deal with Alibaba in 2005 to form a joint venture, in which Yahoo! invested $1 billion cash and Yahoo! China assets, which was valued $700 million, for a 40% stake. The whole joint venture deal was valued at $4 billion.
At Alibaba's coming IPO, analysts estimate it may be valuaed around $200 billion. Even though Yahoo! was forced to reduce its share at Alibaba to 23% in 2012, Yahoo! is still going to do extremely well.
Sue Decker, former Yahoo! president, looked back at what Yahoo! had done right and wrong in China in her" An Insider's Account of the Yahoo-Alibaba Deal" in Harvard Business Review Blog Network. One thing I agree with her, Yahoo! picked the right partner Jack Ma and let go its control, simply being a passive investor. If it had been trying to intervene by transplanting American practices of Internet to Alibaba, Yahoo! would have ended up as disappointed and frustrated as its peers such as Google. Yes, Google failed big time in China.
What works in the U.S. may not work in China. Sometimes being "lazy" and staying-out-of-the-way may be the best solution, esp. in China, on the condition that you find a partner who you can trust and will work hard.
This time Yahoo! can laugh.