In 2007, Yahoo agreed to pay millions of dollars to set up a foundation to aid Chinese political dissidents, after the company was accused of turning over information to the Chinese government. A lawsuit filed on Tuesday claims most of the money is gone, and little went to help imprisoned activists.
Yahoo! made billions on its Alibaba investment, and for many years could credit the Alibaba shares in its vaults for much of its market cap. For that reason, a lot of us would mark Yahoo’s efforts in China as a success.
It is probably too early to make that call. The full story of the company’s China experience has yet to be told, and now that Yahoo no longer exists as an independent entity, it will either be told now or buried for a long time.
But some things won’t die, and if this most recent lawsuit actually makes it to a courtroom, we may get to see the details of how successive generations of leaders at Yahoo used China to burn cash, divert the attention of company leadership, and destroy shareholder value.
Sadly, I’m betting this case will settle. Verizon doesn’t need the headache, and it really wants to get focused on turning its collection of Yahoo and AOL leftovers into something profitable. It is a shame: buried in Yahoo’s vaults lies the raw material of a China business “how-not-to” textbook.