Yahoo, former China head in brewing legal battle

A legal battle is brewing between Yahoo and the former head of its China operations, who filed a lawsuit against his ex-employer on Thursday as Yahoo prepared to answer with its own suit.

Zhou Hongyi took his legal action in Beijing alleging defamation by Yahoo--whose main China business now consists of a 40 percent stake in Alibaba.com that it bought last year for $1 billion--said a spokeswoman for Qihoo, another China search company that Zhou currently heads.

"Because Yahoo China has used numerous methods in the media to openly express incorrect facts about and verbally abuse Zhou Hongyi, Zhou Hongyi has taken Yahoo China to court," Qihoo said in a statement.