Chinese web portals face uncertain future
News of foreign companies' preparations to enter the Chinese Internet portal market is causing concern among mainland industry-watchers and domestic portals.
Both America Online and Microsoft are preparing to enter the Chinese Internet-portal market amid market reports that the number of Chinese using the Internet will be some fifty million people within the next two years. Additionally, Lee Ka-shing's Tom.com, based in Hong Kong, is also reportedly planning to move into the Chinese market in the near future.
China's Internet companies will find stiff competition in these capital- and technology-rich foreign entities. While many Chinese Internet portals are focused merely on market exposure, and some are copying content to get by, foreign portals are moving forward with plans to introduce such advanced technologies as broadband, interactive TV and multimedia applications.
Yahoo.com has already entered the Chinese market in a joint project with the Founder Group. Yahoo only provides the platform and cutting-edge technology. However, most analysts believe that Yahoo is far behind Chinese portals like Sina.com and Sohu.com.
It remains to be seen how new foreign competitors in the Internet market will try to seize market share away from established domestic portals, or how protective the government will be of domestic entities. However, one thing is sure: the battle over Internet users' affections has just begun.
(Source: Peoples' Daily International Edition)
China's network companies forbidden entry into the telecom market
The Ministry of Information Industries recently announced a ban on broadcast and television enterprises providing Internet services. The Ministry also said that even if the ban is lifted, broadcast and television companies will be required to separate their broadcasting and IT operations. The announcement was made in reaction to a recent dispute between Zibo Telecom and China Broadband Network.
Zibo Telecom started providing Internet services in 1997, and it has become the clear leader in the industry. However, China Broadband challenged Zibo's monopoly. China Broadband, a subsidiary of Zibo Radio, Film and Television, began providing access to the Internet in May of this year.
China Broadband caps fees at RMB 65 per month for individuals, and RMB 600 per month for internet cafes.
The directive by the Ministry seems to put an end to China Broadband's Internet business, and would appear to amount to nothing more than an administrative stifling of market competition. In this situation, it is likely that consumers are the real losers.
(Source: Hong Kong Information Daily)
Sohu's acquistion of Chinaren in jeopardy
Subsequent to its recent announcement of plans to acquire Chinaren.com, Sohu.com's share price fell dramatically on the Nasdaq over several days. On Friday, Sohu's share price dropped to US$ 4 per share, much lower than the US$ 7.6 share price when Sohu made the deal.
Last month, Sohu publicly announced that it expected to gobble up ChinaRen, the largest mainland portal among youth, by means of a 4.4 million share swap. The deal was valued at US$ 33.5 million. Sohu hope the deal would allow it to topple Sina.com from its place as the mainland's largest internet portal. The announcement spurred speculation that the move would set off a flurry of similar deals among other mainland dotcom entities.
Sohu insists that the acquisition plan is proceeding smoothly and attributed the fall in its share price to domestic policy changes in China. Last month, Beijing announced regulations setting strict rules on the operation of Internet content providers. However, analysts believe it will be difficult for Sohu to complete the acquisition while its share price is so low. Listed companies usually need to offer a 7 per cent discount to issue additional shares.
ChinaRen declined to comment on the viability of the acquisition.
(Source: South China Morning Press)
Rongshu.com wins copyright battle
In the first case in China of a Web site suing a publishing house for copyright infringement, Rongshu.com emerged victorious in its claim that that its copyright was infringed when the publishing house published five books in its Internet Life Collections that contained nine original articles carried on the Web site.
The Beijing First Intermediate People's Court ruled that the China Social Publishing House infringed the copyright of Rongshu.com by publishing the articles, originally created for the Web site.
The judge, Luo Dongchuan, ruled that the Web site possessed the right to publish the works since it had permission from the authors. The publishing house violated the copyright by publishing those works in its books without the permission of the Web site.
Rongshu.com demanded compensation of RMB 10,001 (US$ 1,208), of which RMB 10,000 (US$ 1,207.70) would go to the authors of the original works, and Rmb 1 (US$0.12) would be claimed by the Web site as symbolic compensation for the infringement of its copyright.
(Source: Beijing Youth Daily).
China Mobile (Shenzhen) receives US$ 1.5B in loans
China Mobile (Shenzhen) has signed a loan agreement worth 12.5 billion renminbi (US$1.5 billion) with a group of eight Chinese and foreign banks headed by the China Construction Bank and the Bank of China.
The money will make up part of the funding needed by China Mobile (Hong Kong) to purchase mobile communications assets from its parent company, China Mobile Communications Group. China Mobile (Shenzhen) is a subsidiary of China Mobile (Hong Kong).
China Mobile (Hong Kong) plans to spend a total of HK$ 256 billion (US$ 33 billion) to acquire mobile communications companies in Beijing, Shanghai, and other mainland cities. It plans to hold a special shareholder meeting to give shareholders the opportunity to approve the acquisition.
China Mobile currently provides mobile communications services in several mainland provinces, including Guangdong, Zhejiang, Jiangsu, and Fujian. It claims some 23.9 million users in these areas, which amounts to 34 percent of all mobile phone users in China.
(Source: China Online)
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