With China’s netizens preferring other services for their music needs, Yahoo! China has decided to pull the plug on its own musical search offering. The decision makers have come to the conclusion that competing in an industry that is largely supported by piracy is not profitable.
As People’s Daily Online reports, Yahoo! China has been fighting losing battles on various fronts over the past few years. It has seen its search engine market share fall further behind Baidu as smaller competitors open up. Not only that, but its strength as a news portal has been lessened as users choose to visit competitors such as Sina instead.
According to the analyst You Tianyu, music service providers struggle to “balance income with expenditure”, even for QQ Music, one of the more popular services. You goes on to explain Yahoo! China’s plight by saying, “the online music service brings high costs with relatively low returns under current business conditions in China.”
With so much evidence laid out bare, it’s something of a no-brainer decision. The question for Yahoo! China and its owner Alibaba, is how to win back the market share in both search engine and news portal markets.