• Before buying Alibaba, China’s largest e-commerce company,
  Yahoo! had purchased the Chinese 3721 search engine to increase its presence in China. This latest deal is set up as a joint venture with Yahoo! letting Alibaba take the lead on expanding Yahoo!’s brand in China.

• Baidu.com went public last week. Investors included U.S. venture capitalists Draper Fisher Jurvetson and IDG Ventures. Google bought a 2.5% stake (US$5M), fueling speculation that it might ultimately buy this Google-like site. Baidu had $13M revenue with $1.4M profit. With the IPO it is now valued at around $4B.

• eBay purchased an online company called Eachnet (already rebranded as eBay), for $180 million. eBay reportedly will spend about $100 million in the next few years to expand its Chinese presence.

What are eBay, Google, and Yahoo! doing in China? They are investing cash and future development efforts to ensure that they participate in the expanding Chinese economy. Rising internet populations, increasing affluence driving an expanded middle class, a floating currency, and its cornerstone presence in Asia all point to future revenue growth for these companies. All three companies are executing their standard plans to increase the drawing power of their sites in each market in which they participate — local content, local search, local products, and local staff. Unlike Chinese companies buying western brands for immediate credibility, these internet firms are combining local brand flavor with their already international presence. Expect them to leverage their established commerce, portal, and search technology infrastructures to improve their local properties — but with awareness a la Yahoo! that the local partner has lots to offer the partnership.