Virtual China: Information Technology

China.com in a Nutshell

China.com owns and operates an integrated network of portal sites: China.com, HongKong.com, Taiwan.com and China Wide Web. The company was recently spun off from Xinhua-owned China Internet Corporation (CIC), largely to distance the IPO vehicle from CIC's negative reputation in Greater China (for details see View from Greater China.) China.com has declined to release traffic figures for its portal sites but claims 400,000 registered users. The company also owns 24/7 Media Asia, an Internet advertising company and Web Connection, a web design and business development firm. CIC, now "sister company" of China.com, was founded in 1995 by James Chu, originally as a China-wide intranet service walled off from the rest of the net. Since the company's founding in 1995, CIC has formed largely unsuccessful joint ventures and business partnerships with companies including SGI, Sun, Bay Networks, Netscape, Pointcast, and AOL (for details on the current status of these deals, see CIC Business Deals, below).

IPO Info
Flash: Get the China.com prospectus here in PDF format, courtesy E-Trade.

Shares Filed: 4.2 M
Date Filed: 6/24/1999
Lead Underwriter: Lehman Brothers
File Price Range: $16.00 - $14.00
Proposed Ticker: Nasdaq: CHINA
Shares Outstanding: 17.78M
Revenue: (1998 claimed) $10 million
Major Shareholders: New World Infrastructure, Xinhua News Agency, America Online
Biggest assets: Domain names (china.com, hongkong.com, taiwan.com), subsidiaries (Web Connection and 24/7 Asia).
Greatest liability: Reputation. (see View from Greater China and CIC Business Deals)

The View from Greater China:

Hong Kong: China.com failed to attract interest from Asian VCs, including its home market of Hong Kong. In a recent interview with IT Daily, Hanson Cheah, head of AsiaTech Ventures, said investor interest was absent because of CIC's "poor track record; for what they have not done." In early May Outblaze, a Hong Kong-based web solutions provider, publicly disassociated itself from CIC, saying a perceived connection between the two companies "has hurt Outblaze undeservedly." CIC's connection with Xinhua is viewed negatively by the more liberal online community in Hong Kong, who associate Xinhua with the Communist party.

Taiwan: China.com owns Taiwan.com, a fact which upsets Taiwanese who believe Taiwan should be recognized as a separate country. China.com tried to distance itself from the controversy by leasing Taiwan.com to a Taiwanese company, CMC Magnetics (also Chunghuan Co.) last May. Taiwan lawmakers expressed outrage over the domain issue, called for investigations into CMC's funding and complained that Internet users would be led to believe Taiwan was governed by Beijing.

Mainland China: China.com attracts little attention in mainland China. In a recent, government-sponsored poll of Chinese Internet users, China.com came in 17th. SinaNet, Sohu, and Netease were all in the top five. CIC also fell out of favor with government censors recently and was temporarily added to China's list of blocked sites.

CIC Business Deals
Partner: Sun and Bay Networks
Announced Deal: Servers and networking hardware for China-wide commercial dial-up Intranet system.
Time: 1996, 1997
Status: No mainland POPs (Points of Presence) up as of June 1999.

Partner: PointCast
Time: 1996, 1997
Deal: Point Cast Asia.
Status: The joint venture was dissolved last year.

Partner: Netscape
Time: 1997 - present
Deal: Netscape Guide
Status: Outside of daily headline updates, Netscape Guide by China.com appears to be a largely static entity without outside advertising support.

Partner: America Online
Time: 2/98 - present
Announced Deal: AOL HK
Status: AOL HK deal announced February 1998. Opening dates have been continually pushed back, most recently from a June, 1999 launch to a September launch.