China is coming

"China is the fastest-growing Internet market in the world, and it will be the largest Internet market in the world in a couple of years," said Jerry Yang, a Yahoo! co-founder and current director who has played a leading role in the company's China strategy. "In Alibaba, we saw the chance to combine it with Yahoo! China and become the largest Internet company in China, period.

U.S. Internet companies have been tripping over themselves to rush into China's Internet market, which is expected to surpass the U.S. in overall users in the next few years. However, most Chinese Internet users have spent the bulk of their time on online video games first, ecommerce second and Internet searches last. That's contrary to U.S. and European behavior, in which search has dominated.