Can Yahoo Be A Chinese Company?

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Alibaba, China's largest search engine, may be trying to stage a takeover of Yahoo. The prospect raises thorny issues — not only because of Yahoo's stormy relationship with its subsidiary — but because of China's checkered history using communications infrastructure for hacking, as well as monitoring the activities of its own citizens.

DAVID GREENE, Host:

And the future of Yahoo is still uncertain after its board dismissed CEO Carol Bartz last month. As we mentioned yesterday, a Chinese website called Alibaba is eyeing Yahoo. Yahoo actually owns more than 40 percent of Alibaba.

NPR's Yuki Noguchi reports on how the takeover talk is raising some red flags.

YUKI NOGUCHI: Can Yahoo be a Chinese company? The prospect raises thorny issues not only because of Yahoo's stormy relationship with its subsidiary, but because of China's own checkered history using communications infrastructure for hacking, as well as monitoring the activities of its own citizens.

CHRISTOPHER WALL: And that raises not only just privacy concerns, but also law enforcement concerns. It raises national security issues.

NOGUCHI: Christopher Wall is former assistant Commerce secretary under the second President Bush. In both the private and public sector, Wall has worked on foreign ownership deals. He says one key question is how much the Chinese government could control Alibaba, or whether it is really an independent company. These are big hurdles for any prospective deal, he says, but still ones that could be cleared.

Yuki Noguchi, NPR News, Washington.

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