Yahoo pulled into China dispute

Alibaba Group, the Chinese e-commerce giant, condemns letter of support for Google following cyber attack claims.

A pedestrian walks outside Yahoo! Inc. headquarters in Sunnyvale, California, U.S., on Thursday, Jan. 14 , 2010. Yahoo! Inc., owner of the No. 2 search engine in the U.S., was targeted by a Chinese attack similar to the one that affected Google Inc., according to a person familiar with the matter. Photographer: Ryan Anson/Bloomberg *** Local Caption ***  618787.jpg *** Local Caption ***  618787.jpg

Yahoo has been pulled into the growing row between China and Google. Alibaba. Group, the Chinese e-commerce giant, condemned as "reckless" its partner Yahoo's support of Google, which has threatened to pull out of the country over censorship and cyber attacks.

A Google spokeswoman on Saturday denied Chinese online reports that the company had already decided to shut down its Google.cn site. Yahoo came under fire at the weekend for issuing a statement supporting Google. Meanwhile, a source familiar with situation revealed the search giant had stayed silent about cyber attacks. The US internet company knew it had been a target of sophisticated Chinese cyber attacks on US firms before Google alerted the company to them but remained silent while its bigger rival went public, the source added.

Alibaba Group, in which Yahoo owns a 40 per cent stake, nonetheless backed away from Yahoo's comment last week that it supported Google's positions. "Alibaba Group has communicated to Yahoo that [its] statement that it is 'aligned' with the position Google took last week was reckless given the lack of facts in evidence," the firm said in a statement on Saturday. Last week, Yahoo said it agreed with Google that attacks on company networks were deeply disturbing and that violation of internet user privacy should be opposed.

That was a day after Google announced it might quit the China market after suffering a sophisticated cyber attack on its network that resulted in the theft of intellectual property. Google said it was no longer willing to filter content on its Chinese-language Google.cn search engine and would try to negotiate a legal, unfiltered search engine or exit the market. Its spokeswoman said on Saturday that Chinese reports that it had already taken a decision were untrue, and denied that employees had been put on paid leave. "It's business as usual," she said.

She said she was "unaware" whether staff in China had been denied access to codes, as some bloggers said, but added that Google was still scanning its systems after the attack. Alibaba, which runs Taobao, China's largest online retailer, and Alibaba.com, the country's largest e-commerce website, has had a testy relationship with Yahoo since the Yahoo co-founder Jerry Yang stepped down from the post of chief executive in January last year.

Yahoo folded its search business and invested US$1 billion (Dh3.67bn) in Alibaba Group in 2005 in exchange for a 40 per cent stake. Yahoo sold its stake in Alibaba.com late last year, surprising Alibaba executives near their 10th anniversary. It is believed that Alibaba also wants Yahoo to sell its stake in the wider group, but Yahoo has said it viewed the now multibillion-dollar stake as a key investment in China. In China, companies tread carefully on topics sensitive to the government.

Firms such as Baidu, NetEase.com and Sina tend to censor themselves without much prodding from the government. * with Reuters @Email:business@thenational.ae

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