US Internet giant Yahoo! Tuesday formed a partnership with 12 Chinese companies to provide e-mail and other services to them.

The move appears to contradict the firm's previous pledge that it would not enter the Internet portal market, and compete with NASDAQ-listed domestic rivals Sina Corp, Sohu.com Inc and Netease.com Inc.

Yahoo! China said Tuesday that it had formed an e-mail alliance with Chinese firms like NASDAQ-listed travel service company Ctrip, game websites including Haofang, e-commerce firm Dangdang, IT information portals Chinabyte, Enet and Donews, and software company Kingsoft.

The Chinese branch of the US Internet giant will first provide its free e-mail technology to the 12 companies and their users can register such accounts with a capacity of as much as one gigabyte.

Yahoo! China spokesman Tu Jianlu said that more than 50 percent of China's 80 million Internet users use the services of the 12 companies. These users are highly educated in terms of the Internet and are loyal, making them very valuable to his company.

He said the 12 companies will not pay Yahoo! China for e-mail services, but his company can easily win millions of high-quality Internet users and that will be very helpful for Yahoo! to develop online advertising and other forms of marketing.

Many companies such as HP advertise on the mail service web pages of Yahoo! China and the addition of millions of users could help it attract more online advertisement customers.

Yahoo! China will then offer its search engine and instant messaging services to the 12 companies.

Tu said Yahoo!'s instant messaging technology has been used by Haofang, which is partially owned by NASDAQ-listed Shanda Interactive Entertainment, and will be extended to other partners.

Yahoo! China's three major businesses are e-mail, search engine and instant messaging services.

The partnership with the 12 companies will aid Yahoo! China's ambitions in another business, Internet content with millions of high-quality loyal users.

Yahoo! made Internet content and related online advertising its core business in China, when it entered the nation, but due to the fast growth of Sina, Sohu and Netease, cultural differences and regulatory problems, it decided to shift its focus to e-mail, search engine and instant messaging.

The company once said it would not try to challenge the so-called "Big Three" Chinese Internet portals.

(China Daily October 20, 2004)