(AFP/File) - A man navigates through the new iPad 2, April 2011. An enterprising Chinese man has come up with a solution for gadget-crazy people who desperately want Apple's popular iPad tablet computer but cannot afford it -- DIY.(AFP/File/Noel Celis)

The Yahoo! offices are pictured in Santa Monica, California April 18, 2011.

Credit: Reuters/Mario Anzuoni

SAN FRANCISCO (Reuters) - Greenlight Capital chief David Einhorn unloaded his stake in Yahoo Inc just months after building a sizable position, swallowing a "modest loss" after an ownership dispute tarnished the Internet company's prized Chinese assets.

Greenlight told investors saying it was exiting the investment after it emerged that China's Alibaba -- of which Yahoo owns about 40 percent -- had transferred its highly valued online-payments business to a separate company controlled by Alibaba founder Jack Ma.

That move marked the latest blow to Yahoo, which CEO Carol Bartz is struggling to get back on a growth track. Its Asian assets, including its slice of Alibaba, are deemed the most valuable portion of the company.

Yahoo shares were down 1.5 percent at $15.57 in afternoon trading Friday.

"The partnership bought Yahoo earlier this year based on a sum of the parts analysis which included putting substantial value on its Chinese assets," Einhorn wrote in a July 7 letter to investors obtained by Reuters on Friday.

"Shortly after the purchase, the value of the Chinese assets came into doubt as the CEO of the Chinese unit 'hived off' a valuable subsidiary into a corporation that he personally controls.

"From there the finger-pointing started going in every direction," the hedge fund manager wrote. "This wasn't what we signed up for. We exited with a modest loss."

FINGER-POINTING

Einhorn, head of the $7.8 billion hedge fund firm, told investors on April 29 that Greenlight had taken a "significant" long position in Yahoo stock at $16.93.

But on May 11, Yahoo said Alibaba Group had transferred ownership of its online payments business, Alipay, to a firm controlled by Jack Ma, Alibaba's chief executive. Yahoo shares tumbled more than 7 percent that day.

This year has been one of Einhorn's toughest, according to the investment results of Greenlight Capital Re Ltd, a reinsurer that invests its premiums with the hedge fund manager.

Einhorn was down 2.9 percent in June, leaving him 5.2 percent lower for the first half of 2011, Greenlight Capital Re disclosed recently on its website.

Last year, Einhorn generated 11 percent returns, Greenlight Capital Re data show.

Einhorn's sale of Yahoo stock was first reported by zerohedge.com.

(Reporting by Alistair Barr; Editing by Andre Grenon and Phil Berlowitz)

original content on reuters

Google's Chief Executive Officer Eric Schmidt poses during an interview with Reuters at Google's headquarters in Buenos Aires March 4, 2011.

Credit: Reuters/Enrique Marcarian

SUN VALLEY, Idaho, July 7 (Reuters) - Google Inc is leaving open the door to more co-operation with social-media giants Facebook and Twitter, and believes there is room for multiple social networks as it rolls out its own, executive chairman Eric Schmidt said.

He also said the company will cooperate fully with U.S. antitrust regulators but will not let the formal probe launched last month distract or disrupt its strategy. He was speaking to journalists at the Allen & Co. media conference in Sun Valley, Idaho.

Schmidt, who vacated his CEO seat to co-founder Larry Page in April and now oversees government affairs, said it was too early to say how its new social network, Google Plus, was faring -- but one key indication of success is the number of people clamoring to be part of the limited group currently using Plus, which launched in trial mode last week.

One of the more popular features on Plus, especially with younger users, was online video chat, he said.

Singling out two services where Google Plus can now be viewed as a competitor, Schmidt said he would "love to have deeper integration with Twitter and Facebook."

Google's search deal with Twitter recently expired, and despite "a substantive and lengthy discussion," the companies couldn't agree on terms, he said.

And Google's overtures to Facebook to discuss letting Plus users import Facebook friends also went nowhere, Schmidt said.

Schmidt laid out a future with multiple sources of online identity and multiple social networks, even as detractors say Facebook's service, with millions of users around the world, is too entrenched to allow for serious competition.

Schmidt also said Google executives -- though not he himself -- had discussed the recent hacking of email accounts with Chinese officials.

Google last month revealed a major hacker attack that it said originated within China. It said hackers tried to steal the passwords of hundreds of Google email account-holders, including those of senior government officials, Chinese activists and journalists.

"We tell the Chinese what we know ... and then they publicly deny their role. That's all I have to say about that," Schmidt said.

Closer to home, the U.S. Federal Trade Commission has started a formal review of Google's business, raising concerns among investors about a lengthy, distracting probe and potential legal action.

The FTC is expected to address complaints from Google's rivals that its search results favor the company's own services. Google, which runs an estimated 69 percent of Web searches worldwide, can make or break a company depending on its search ranking.

Some worry that Google's desire to stand firm against government intrusion -- as with its protests against Chinese censorship of search results -- will trigger a long battle that ultimately does more damage than a quick settlement.

"We've had some meetings internally, (but) we haven't changed anything," Schmidt said.

(Reporting by Sarah McBride; Editing by Gary Hill and Lincoln Feast)

original content on reuters

(AFP/File) - A man walks past the headquarters of Chinese web search giant Baidu in Beijing. Baidu says it has reached an agreement with Microsoft to provide English-language results generated by the US software giant's Bing search engine.(AFP/File/Simon Lim)

Baidu's website is seen on a laptop screen in this photo illustration taken in Shanghai December 15, 2010.

Credit: Reuters/Carlos Barria

SHANGHAI (Reuters) - Baidu, which has three-quarters of China's search market, signed a deal with Microsoft's Bing to offer English-language search to Baidu users, as it eyes an overseas expansion and Microsoft aims to increase its presence in the world's largest Internet market.

Baidu dominates China's search-engine market after Google Inc pulled out last year following a high-profile fallout with Beijing over censorship.

The partnership will allow English-language input into Baidu's search box to automatically activate Bing, whose search results will be delivered to Baidu's web pages, Baidu said in an emailed statement on Monday.

Analysts said the tie-up would help Bing to gain greater access to China's more than 450 million Internet users and further dent Google's business in the country.

"The cooperation between Baidu and Microsoft will further strengthen Baidu's dominance in China's search-engine market, and will also make Google's business in China more difficult," said Dong Xu, an analyst with Analysys International.

Baidu had 76 percent of the Chinese search market in the first quarter of 2011, according to Analysys International data.

Bing, which censors its contents in China to be able to operate in the country, has a negligible share of the market, while Google has nearly 20 percent counting visits to its offshore sites.

The new tie-up, due to be launched this year, builds on existing cooperation between Baidu and Bing on mobile platforms and page results, said Baidu spokesman Kaiser Kuo.

Kuo said Bing was not submitting to any further censorship or restrictions on its English search as a result of the deal "than they already do."

Microsoft was not available for comment.

With web penetration hovering around 30 percent and lack of sophisticated users outside the big cities in China, the potential for growth in the sector is huge, analysts say.

Some analysts were however skeptical of just how much demand there would be for English search on Baidu.

"It's a good thing, but I see very minimal impact for Baidu. I don't see a lot English keywords going through Baidu. It goes through Google," said Wallace Cheung, a Hong Kong-based analyst at Credit Suisse.

It is not Baidu's first time to enter the search market overseas. It has a Japanese search service that is loss-making.

Baidu has also been diversifying from its core search business to compete in the fast-growing segments of mobile and social networking.

Baidu has hinted it is developing a mobile device operating system and recently invested $306 million to take a majority stake in travel website Qunar, as it focuses more on e-commerce. The company also has a stake in online video firm Qiyi.com.

Shares in Baidu have risen more than 48 percent so far this year, even after falling in June, as concerns over fraud at some Chinese companies listed overseas hit market sentiment toward Chinese companies listed in New York more broadly.

(Additional reporting by Samuel Shen; Editing by Matt Driskill and Anshuman Daga)

original content on reuters