Interview - Jerry Yang Explains Yahoo's China Gambit

From Business Week: Inside Yahoo's China Gambit

"Q: Why did you choose to partner with Alibaba rather than build up the business in China on your own?

A: We've been doing a lot of everything in China. We've been building, partnering, and buying. We purchased a company a year and a half ago called 3721 that is the basis for our search business in China.

But this Alibaba arrangement is a unique model of partnership for us. We believe that to be successful in China, we absolutely have to have strong local management, and [Alibaba CEO] Jack Ma and his team are the best-of-breed Internet management team inside China.

[Alibaba and Yahoo China are] probably the most unique basket of assets assembled together. We are combining our strong No. 2 search and mail businesses with Alibaba's first-place consumer auction platform, their leading business-to-business franchise, and their AliPay, which is their payment platform.

It's the only company in China that has commerce, search, communications, and a very, very strong local management team. This is going to be a very valuable franchise going forward."