Internet bellwether Yahoo Inc. announced Friday the completion of its acquisition of Kimo.com Corp., Taiwan’s leading Web portal.
Yahoo will now start integrating its own Taiwan portal with Kimo.com into a combined operation to be known as Yahoo Kimo. The two sites are expected to be integrated by the second half of this year, the Santa Clara, California-based company said in a statement.
The combined company will employ about 180 staff and be located at Kimo’s headquarters in Taipei, Yahoo said. Until the integration process is completed, Yahoo Taiwan and Kimo will continue to operate as two separate Web sites, although they will provide direct links to each other’s services.
David Lu, the chief executive officer of Kimo, will oversee Yahoo’s operations in Taiwan and China, though not Hong Kong operations, as Yahoo’s general manager for Greater China, “on a consulting basis,” Yahoo Asia spokeswoman Pauline Wong, told IDG News Service on Monday.
When the stock-swap deal was first announced in November last year, Yahoo agreed to exchange 2.25 million newly issued shares for all outstanding shares, options and warrants of privately held Kimo. At the time, the transaction was valued at US$146 million, with Kimo’s shareholders also entitled to additional cash payments of approximately $50 million if undisclosed performance targets were met in the next year.
Yahoo’s (YHOO) share price has since dropped from $65 to $25.44 at the end of regular trading on the Nasdaq exchange last Friday, bringing down the value of the Yahoo shares issued to Kimo’s shareholders to $57.2 million. Kimo’s major shareholder was Sysware Corp., a unit of Taiwan-based systems integrator Systex Corp., which held about 85 percent of the company’s shares.
The successful completion of the Kimo acquisition may give some much-needed relief to Yahoo’s operations in Asia. Yahoo has in recent weeks seen the resignations of a string of high-level executives, including Yahoo Asia Managing Director Savio Chow and Dennis Zhang, who headed Yahoo’s China operation.
Yahoo has a shortlist of suitable candidates for Zhang’s position, and Lu will oversee his replacement, Wong said.
Yahoo Korea Corp. CEO Jin Youm is also set to resign at the end of April, although he will remain on the board of directors and as an advisor to the company, a company spokeswoman confirmed last week.