Soon after reports came out that Yahoo was close to acquiring 3721, a company that sells Chinese-language Web addresses, Chinese websites are already reporting that a deal has been struck. This would mean that Yahoo has added a business for selling domain names in China, while also maintaining a beachhead in what's considered a rapidly growing market for Internet companies.

According to reports, Zhou Yiwei, president of 3721, will go to Hong Kong to sign a contract with Yahoo today. The deal is as follows – Yahoo will give 3721 US$120 million in both cash and stock to buy 3721's Hong Kong company. It is also rumored that Mr. Zhou will be the president of Yahoo's China office but this has received no confirmation. CNNIC, 3721's competitor, has suggested that the deal may not be true – just 'drum-beating' on both sides – as they believe Yahoo has overvalued 3721.

3721's sells Chinese-language keywords for Roman alphabet domain names, in the hopes of enabling local Internet users to find Web sites more easily, meaning that a Chinese company can maintain its brand when local Web users either search for the company or type in the company's Web address. Web users can download browser software to accept Chinese-language keyword inputs.

Chinese language Web portals also support 3721 keywords. 3721's income for 2003 is expected to reach CNY200 million.

The negotiations between Yahoo and 3721 come as the Internet Corporation for Assigned Names and Numbers, the Net's supervising body, is studying whether to add suffixes in non-Roman character sets to its domain name database. People can surf the Web using different languages, but site addresses must currently end in a Roman-language suffix such as .com or .org.