In a Dec. 13 press release announcing the takeover, Yahoo indicated that the transaction would be completed in the first quarter of 2007. Under the agreement, Yahoo--which launched its blog services in November 2005--would buy all of Wretch's shares, Yahoo PR Supevisor Ruu Wu confirmed Dec. 14. Citing her company's non-disclosure policy, however, Wu declined to confirm media reports that the transaction was worth US$22 million.
This is the U.S. Internet giant's third major investment in Taiwan, following its purchase in 1999 of a 10-percent stake in ChinaTimes.com, which is part of the China Times Group, and its acquisition of Kimo in 2000, the most popular Web portal in Taiwan at the time.
According to the results of a survey released Oct. 18 by the Taipei-based marketing researcher InsightXplorer, Wretch ranked No. 1 in Taiwan in terms of its annual reach, which was as high as 66.8 percent, meaning that 668 in every 1,000 domestic Web users surveyed had visited the site at least once during the year. Yahoo's blog hosting service was the second most popular, with an annual reach rate of 48.2 percent, the results of the survey showed. These figures indicate why many local pop and TV stars are turning more to Web sites for publicity, said Wu.
Wu said the details on how Yahoo would integrate its current blog services with the new venture would be announced after Yahoo officially took over and began operation of Wretch. The local Web site would maintain its name and its services, she added.
In the press release, Yahoo Taiwan General Manager Rose Tsou was quoted as saying that the acquisition of Wretch came amid a rising trend of user-created content such as personal blogs, photo albums and audio-video files. "Yahoo's wealth of Web-application technology and experience, along with Wretch's Web2.0 applications, will contribute to the mutual benefit of the two companies, and further project the concept of 'social media' as promoted by Yahoo," said Tsou.
By promoting the "social media" and "Web2.0" concepts, Wu explained, Yahoo aims to serve as a platform provider for users to create their own texts and images, to interact with other users and to form Internet communities. Yahoo's objective grew in response to the idea of a second-generation Internet, termed "Web2.0" by U.S.-based computer book publisher O'Reilly Media Inc. in 2003. This, Wu said, would expand the use of Internet, to which almost everyone has easy access, moving beyond first-generation Web services which fed information to users via Web portals.
Wretch co-founder Lin Hong-cyuan was quoted in the announcement as saying that the takeover would certainly mean good news for the site's current members and users as Yahoo's global resources would be incorporated into the service.
Wretch would continue to operate independently after the acquisition, said Wu.
In response to the news of Yahoo's acquisition, its main rival PChome told the Chinese-language China Times that it would keep an open mind and would not exclude the possibility of cooperating with other businesses in the future.