Sharks Circle China's Alibaba.com

The buying and selling of shark fins on the partially Yahoo-controlled e-commerce site angers activists, who say the harvest is brutal

by Bruce Einhorn

For the past seven years, Patric Douglas has run a San Francisco company that gives people a very unusual vacation experience. His customers go out on a boat, get into cages, are submerged beneath the surface of the ocean, and watch as sharks swim by. It's called shark diving, and while hanging out underwater with a great white may not be your idea of fun, Douglas, 36, has found enough thrill-seekers that his company, Mega Outdoor Adventures, takes about 500 people a year to the waters off the coast of Baja California to see all sorts of sharks, including great whites, tiger sharks, and whale sharks. "There are some really funky diving opportunities," explains Douglas, who now has four vessels operating full-time.

Thanks to his shark-diving business, Douglas has also become an unlikely leader of a campaign targeting one of China's top e-commerce companies. Alibaba.com, a business-to-business marketplace that is 40% owned by U.S. Internet giant Yahoo! (YHOO), provides small and midsized companies in China the chance to find buyers and sellers overseas. And, among the thousands of products displayed on Alibaba's site, are numerous types of shark fins, prized by many Chinese as the vital ingredient in shark fin soup, a delicacy often found on the menus at high-end banquets in Hong Kong, Shanghai, and other Chinese cities.

Harvesting shark fins can be a brutal practice—with sharks often tossed back into the ocean to sink to the bottom and die—and Douglas and other activists say that shark populations worldwide are plummeting as a result of the growing demand for fins. "Something evil is going on here," he says. The shark fin trade "is decimating the oceans."

On Congress' Radar

That has turned Douglas and other divers into activists. Since starting last year, they have sent petitions with thousands of signatures to Alibaba demanding that Founder, Chairman, and Chief Executive Officer Jack Ma crack down on the shark fin merchants using its site. Alibaba, which has more than 180 companies engaged in buying or selling shark fins, is "the New York Stock Exchange of shark fins," says Douglas. Adds Wolfgang Leander, a 66-year-old diver and director of shark preservation at the Ocean Realm Society, a lobbying group based in Florida's New Smyrna Beach, "They are offering the shark fin traders a very convenient platform to do business."

For Yahoo, the campaign against Alibaba (widely rumored to be readying an initial public offering for later this year) by the world's shark activists is the latest in a string of China-related public relations challenges. Last year, at a congressional hearing on the role played by U.S. companies in censoring the Internet in China, Representative Tom Lantos (D-Calif.) condemned Yahoo and others for their "abhorrent" willingness to cooperate with the Chinese government. In May, Shi Tao, a journalist currently imprisoned in China—thanks in part to Yahoo's cooperation with local police—sued the company in the U.S.

The headaches haven't just been about free-speech issues. A Chinese court in April ruled against Yahoo China (owned by Alibaba) in a lawsuit brought by IFPI, the International Federation of the Phonographic Industry, alleging that the company facilitated digital music piracy. Alibaba is appealing. The likely Alibaba IPO should provide some welcome good news from China for new Yahoo CEO Jerry Yang, who was instrumental in negotiating the acquisition of the Alibaba stake in 2005. Probably the last thing Yang wants for Yahoo is another black mark against China.

Standing Behind Its Policies

Alibaba denies any wrongdoing regarding shark fins.