Human-rights groups that once criticized Yahoo for complying with Chinese authorities' efforts to clamp down on political discourse are now praising its new, public stance on the issue.

Nevertheless, Yahoo's effort raises questions about its future in a country where companies are expected to avoid open conflict with government policies. Those questions also could conceivably apply to Microsoft Corp. in the future, should it succeed in acquiring Yahoo.

Harry Wu, a former political prisoner and human-rights advocate once deported by the Chinese government, has been charged with overseeing Yahoo's initiative. Wu said a board of roughly five members should be in place to start administering the fund by the end of this month.