This started out to be an East vs. West branding story. Could a dominant, high-powered US brand compete against a fast-growing, successful Chinese brand on its own turf?

Then the story really got interesting in the battle to win the hearts, minds and wallets of an estimated 200 million Chinese Internet users by 2007.

In 1999, former English schoolteacher Jack Ma launched Alibaba.com from an apartment in Hangzhou, China. Alibaba.com has since grown into three online marketplaces serving the B2B (alibaba.com), B2C (china.alibaba.com) and C2C (taobao.com) marketplaces. Essentially, Alibaba.com serves as an e-commerce aggregator, bringing together buyers and sellers. Forbes magazine has named the firm one of the "Best of the Web" for five years running.

Alibaba.com succeeded because it filled a void. There was a dearth of printed catalogues and other tools to help buyers and sellers find one another. It sits in the middle of the world's manufacturing belt, with hundreds of thousands of factories and suppliers nearby. And the home-grown company understands Chinese culture and business practices well.

Uniquely, Alibaba.com allows buyers and sellers to contact each other directly (a big eBay no-no), and the sites are largely free of charge. Revenue primarily comes from charging for premium content/positioning and from a secured payment service like PayPal.

Alibaba lorded over the Chinese market until 2003, when US firm eBay purchased EachNet, another Chinese e-commerce site, for $180 million. The stage was then set for a battle of the titans.

eBay is one of the world's premier brands, with 2004 revenues of $3.27 billion. CEO Meg Whitman told analysts that China was a "must win" and "likely to be the defining measure of business success." It has promised to spend $100 million this year in China promoting its site, an overwhelming number considering that Alibaba's gross revenues totaled only $68 million in 2004.

Who will come out on top? eBay is a classic customer-economy brand, having grown with minimal advertising and lots of word of mouth from passionate advocates. But recently, it has also attracted a lot of negative press by raising fees, placing the burden of fraud detection on its buyers and sellers, and abysmal customer support that amounted to little more than automated emails.

eBay has initially come on strong in China, capturing an estimated 61 million Chinese users and about 55%-65% of the market. But the ultimate outcome is still in doubt, despite Whitman's hope that China becomes eBay's biggest market in 5-10 years.

Elsewhere in Asia, eBay failed so miserably in Japan it was forced to exit the market in 2002. Its Malaysian site offers limited variety. (Its track record is much better in other international markets.) Another weakness in China is the need to adhere to eBay's global platform, which hinders customization. Finally, it lacks a Chinese online payment platform like PayPal.

But this is no longer a local David vs. international Goliath story. Now there are two compelling brand stories. In mid-August, Yahoo! paid $1 billion in cash for a 40% stake in Alibaba.com, raising the spectre of 1999 dotcom madness.

And the stage is set for a Yahoo! vs. eBay story while Google is stealthily moving into the markets of both. To make the story even more interesting, the new Yahoo!- Alibaba combination includes 3721.com, a Chinese-language search engine that Yahoo! acquired last year for $120 million. 3721.com competes with Baidu.com (yes, the one that went up 350% on its first day of trading on US markets), which is partly owned by Google.

Experts are split on who the ultimate online winner will be in China. Standard & Poor's downgraded eBay because of the threat, while the Economist magazine criticized Yahoo!'s long-term strategy. Yahoo! China's president even quit because he didn't think the Alibaba transaction would work.

Initially, both will do well in a market expected to grow 80% annually for the next three years. However, as much as we admire Meg Whitman and her savvy executive team, we're putting our long-term money on Yahoo!, despite the fact it overpaid for Alibaba.com.

Yahoo!'s corporate DNA is based on personal skills and relationships (Yahoo! started with human editors indexing the Internet), which will resonate in China much more than eBay's blind faith in computer technology and an efficient marketplace. Yahoo!'s combined capabilities will make it easier to find and buy products, a vital skill as China moves from communist to consumerist.

PR in Asia is generally abysmal, but Jack Ma understands how to use the press better than any other Asian executive I've seen. Listen to this soundbite at the press conference announcing the link with Yahoo!: "We're going after Baidu.com for the No. 1 spot in China. Google is history as far as I'm concerned."

Yahoo!, eBay and Google battling over what will be the world's largest online market: Who needs Desperate Housewives with drama like this?