Austria-Hungary considered the Balkan Peninsula as its sphere of influence, but the countries on the Balkan Peninsula were predominantly Slavic, giving Russia the upper hand there.
Since Austria-Hungary was never a colonial power, losing the Balkans as a crucial market almost pushed Austria-Hungary to the brink of destruction. If Austria-Hungary declared war on Serbia, Russia, as a fellow Slavic nation, obviously could not stand idly by.
The Balkan Peninsula was nearly the only direction in which Austria-Hungary could expand and the only hope for Austria-Hungary to further increase its national power. Meanwhile, the Yugoslav nation that Serbia wanted to establish overlapped with Austria-Hungary's territory and could potentially split the Slavs within Austria-Hungary's borders. Thus, the conflict between Austria-Hungary and Serbia was nearly irreconcilable, unless Serbia abandoned its territorial ambitions in Austria-Hungary.
