What does it take to become a global Internet giant?

According to the Computer Industry Almanac, the worldwide Internet population this year is 934 million. In 2007, the worldwide Internet population is projected to reach 1.35 billion. Companies that want to thrive need to adjust their strategies accordingly, perhaps by taking a page from Yahoo!'s playbook.

Yahoo! enjoys an enviable position in the Asia Pacific, the area of the world with the fastest growing online audience. Yahoo! is the premier portal in countries such as Japan, Hong Kong and Taiwan, and is a strong and definitely leading brand in Korea, China, Australia, and India.

Yahoo!’s strategy to penetrate the Asia Pacific has been specific to each country. In other words, local markets drive initiatives to address local markets. For example, all advertising campaigns from several global advertisers on the Yahoo! Network -- such as Sony, HP, GM and Pepsi -- are local market specific.

Aside from taking an individualized approach to each of its international businesses, Yahoo!’s success has succeeded because of it's partnerships with local firms for each of its Asian units. Examples include Yahoo! and Softbank’s collaborative effort to create Yahoo! Japan, its partnership with Singtel in Singapore (a mobile deal), and its acquisition of KIMO in Taiwan.

Let’s take an in-depth look at the following Yahoo! properties in the Asia Pacific that all have in-market operations supporting them as stand-alone businesses; all are managed by local staff:

Yahoo! Japan -- Yahoo! Japan is the exception in the Yahoo! international family. Whereas all of its other international properties are limited liabilities wholly-owned by Yahoo! Inc., Yahoo! Japan is a joint venture with Japan's Softbank, who is the majority shareholder. Softbank owns roughly about 52 percent, and Yahoo! Inc. somewhere around 48 percent. More importantly, Yahoo! Japan is separately listed on the Nikkei Exchange and discloses and reports its own separate earnings etc.

Yahoo! Japan essentially owns that market. In fact, they have a 98 percent share -- even in the auctions space, where global auctions site eBay actually withdrew its business and from the market entirely. Yahoo! has a successful broadband offering called Y! BB, as well as a suite of communications tools, search functionality, and other news, entertainment and sports content that other Yahoo! properties offer to their users.

Yahoo! China -- This is an emerging market growing at break-neck speed. Not only does the number of Internet users in China increase by 800,000 a week, but in July PricewaterhouseCoopers projected that China’s media sector would achieve a 25 percent growth in revenue through 2008 due to an increase in online advertising. Yahoo! China is emerging as a leading portal and the current marketplace still supports a multi-player competitive landscape without a clear leader in all vertical categories. Yahoo!’s businesses and current consumer and enterprise offerings look like this:

Yahoo! China exists as a traditional Yahoo! portal, giving Chinese Internet users a point of entry, providing communications tools such as Mail, Instant Messenger, Games, Groups, Photos and more.

In April of this year, Yahoo! China entered into the ecommerce space when it announced a joint venture with Chinese portal SINA.com to create an online auctions product called 1PAI (pronounced eee-pie) (the characters in Chinese mean "get a good deal"). This offering has a platform that can be used by individual buyers and sellers as well as SMEs. Additionally, in June, Yahoo! China launched a separate Chinese-specific search product called Yisou, a stand-alone URL that provides a clean, simple search box that Chinese users can use to find Chinese language specific data and information on the Web.

At the end of 2003, Yahoo! China announced the acquisition of a search-based company called 3721 Networks. Yahoo! China layered its employees and very sophisticated search platform over preexisting business operations and offerings to create an even more robust and compelling user experience.

Yahoo! Hong Kong -- Yahoo! is emerging as a leading portal as well as auctions site in this market. Yahoo! products are available in both English and Cantonese.

Yahoo! Taiwan -- After a very high profile acquisition of a company called KIMO in 1999, Yahoo!’s presence became known in this marketplace and has enjoyed this position since that time. Yahoo! also has had success in the auctions sector of this market.

Yahoo! Korea -- This is a unique market in Asia with tough local competition. Yahoo! recently was the first portal to launch a local search product called "GUGI" that helps online users search for and find listings for local businesses. Yahoo! also offers a popular Avatar client to Korean users.  With the world's highest broadband penetration, Korea is often a lead or test market for Yahoo! products that it develops for the broadband universe.

We can attribute Yahoo!’s success to the perfect synergy of taking an individualized approach to each market and creating partnerships in each country. Yahoo! has partnered with local companies in each global operation market to gain a better understanding of local customers' preferences, local customs and business practices, brands and fulfillment. Companies that want to stay ahead of their competitors and increase market share in global markets should carefully examine Yahoo!’s strategy in Asia Pacific and execute accordingly. 

Elizabeth M. Lloyd is the Director of Corporate Marketing for Netblue, Inc., an online direct marketing company based in Silicon Valley. Previously, Lloyd was the Director of Marketing for opt-in email provider, NetCreations, in New York City. Prior to NetCreations, Lloyd was responsible for the PR department of ValueClick, Inc.