Alibaba shifts classifieds from Yahoo China to Taobao.com

According to Western reports , the restructure comes a little more than a year after Koubei merged with Yahoo China, which was part of Alibaba Group’s overall revamp of Yahoo’s operations in the market.

Reports note that Yahoo’s revamped image will include a larger focus on entertainment, moving itself away from its position as a one-stop portal.

Since 2005, Alibaba has been the controlling shareholder of Yahoo China. According to reports, Alibaba was to lend its profile to Yahoo and boost its popularity in the market, and Yahoo paid US$1 billion for a 39 per cent stake in Alibaba Group in exchange.

Parallel to the announcement is Alibaba’s ongoing efforts to strengthen Taobao, which recently included the strengthening of ties between the site and Alibaba.com to offer global vendors a wider range of distribution channels  and a partnership with video website Youku.com to provide a video gallery for digital retailers .

According to David Wolf, CEO of Wolf Group Asia, while Koubei’s shift from Yahoo to Alibaba indicates that Yahoo isn’t an especially strong performer in China’s digital scene, refocusing Yahoo’s assets to places where they would be more effective is a smart move.

“I think that, as a businessman, you always look to put your assets into a place where you will get your return. Taobao and Alibaba have a clear model of revenue and not so much with Yahoo,” Wolf said. “Yahoo may not have a long-term place in the market, but some of its assets will be able to find longevity in China.”

Representatives from Alibaba did not return calls by press time.