Yahoo Caught In Crossfire between Google And China (YHOO, GOOG, CSCO, MSFT, AAPL)

According to Reuters, Yahoo (NASDAQ: YHOO) has ruffled the feathers of its Chinese partner Alibaba, after Yahoo came out with a statement expressing solidarity with Google (NASDAQ: GOOG) in its row with Chinese censors.

Last week, Google had announced that it was not willing to subject itself to Chinese censorship laws. This came after a series of hacker attacks, which affected a host of US firms. Google claims these attacks were done with the tacit agreement of the Chinese government. The move raised eyebrows for being a rare instance where a leading business giant had locked horns with the Chinese government. Yahoo later came out in support of Google – however, it did have to face some fire from its own Chinese partner , e-commerce Alibaba Group. Yahoo owns 40% in Alibaba, yet that did not stop Alibaba from calling Yahoo’s statement reckless.

Alibaba, which runs Taobao, China's largest online retailer, as well as China's largest e-commerce website Alibaba.com, has had a testy relationship with Yahoo ever since the departure of Yahoo's former chief executive Jerry Yang. Most Chinese firms, like Alibaba, tend to toe around the government and have strong self censorship policies in place.

Not all American firms have necessarily aligned themselves with Google’s stance. Its greatest rival, Microsoft (NASDAQ: MSFT), has reiterated that it would not be moving out of China. Apple Inc. (NASDAQ: AAPL) too has not announced any intention of quitting China, and Cisco (NASDAQ: CSCO) has been muted about the entire controversy.