Moving to strengthen its presence in the Asian market, America Online announced Friday that it has acquired a 10 percent stake in Internet company China.com.
The agreement also gives AOL the right to exercise an option to acquire an additional 15 percent stake in the company in the future. China.com has filed a registration statement with the SEC to conduct an initial public offering and gain a listing on Nasdaq.
“Asia is a fast-growing market for the Internet and the Chinese language audience will be an important component of our future growth,” said American Online CEO, Bob Pittman. “This investment will provide yet another way that we will participate in the new market.”
In addition to its flagship site, China.com operates portals at hongkong.com and taiwan.com, all complete with e-commerce products, chat and message boards, search engines and directories and localized content.
In addition, the company operates Internet advertising services through an alliance with 24/7 Media, Inc., with a focus in China, Japan, Singapore, India, Southeast Asia and Australia. China.com also offers Web solutions to companies throughout Asia.
Shoring Up The Continent
Like many American and European corporations, AOL is obviously intrigued by the potential of the Asian market. It signed a deal last year with Hong Kong-based China Internet Corporation to launch an AOL Hong Kong service. The project was initially scheduled to begin earlier this year, but apparently has fallen behind schedule.
China Internet Corporation is the company responsible for the creation of the China Wide Web, a nationwide business information network that has strategic alliances with Dun & Bradstreet, Bloomberg, Reuters, Nikkei, the Financial Times and other noteworthy news and information services.
China is the enigma in the entire Asian Internet puzzle, the prized jewel that glitters beneath a sheen of ideological differences and bureaucratic struggles. The Chinese government has made some recent moves that signal they are warm to the idea of e-commerce.
Earlier this year they signed a deal with U.S. Business Network to open MeetChina.com, the officially sanctioned e-commerce portal of China. The operators say they expect to have links to over 15,000 Chinese companies by next month and plan to add over four million Chinese businesses by 2002.
While companies are making their grab for a slice of the pie, it’s still rather unclear just how large the pie is at present. Should the globalization of the Chinese economy continue, the pie will obviously grow larger. It’s estimated that there are two million Internet users in China, though U.S. Business Network’s co-founder claims that it isn’t unusual for several people – or entire companies – to share a single login.