HONG KONG (01/25/2000) - U.S.-based Internet holding company CMGI Inc. will bring all the companies it owns to Asia through a joint venture with Hong Kong-based Pacific Century CyberWorks Ltd. (PCCW), the companies announced today.
The 50-50 joint venture, CMGI Asia, will extend to Asia all 18 companies in which CMGI has a majority stake, as well as all future CMGI acquisitions, officials of the companies said in a press conference at PCCW headquarters in Hong Kong.
The deal brings together one of the major Internet venture companies with arguably Hong Kong's most high-profile technology investment company, with the two staking a claim on a regional market that many observers say is heading for explosive growth. It will also bring to Asia a range of services that may help to kick-start development of electronic commerce in the region.
By leveraging CMGI's Internet expertise and PCCW's Asian connections and experience, the companies hope to bring a full set of Internet services to the region, including Japan.
"We will be capturing Asia's Internet market as it enters its take-off stage," said Richard Li, chairman of Pacific Century Group, PCCW's parent company.
CMGI's model of a one-stop shop for everything from generating Web traffic to fulfilling e-commerce orders and serving customers eventually will be available to companies throughout Asia over PCCW's Network of the World (NOW) satellite-based broadband service, Li said.
The companies will begin by expanding four prominent CMGI ventures to Asia: Web portal AltaVista Co., customer-profiling developer Engage Technologies Inc., personal Internet broadcasting company iCast , and 1ClickCharge, a service for easy Internet purchases. Deals with these four have already been inked, and work is in progress for the other 14 CMGI companies.
CMGI officials said they hope to capture a huge market opportunity emerging in the region.
"PCCW and CMGI have the opportunity to create one of the first truly global Internet companies," said Hans Hawryz , executive vice president of strategic planning at CMGI.
With the planned geographic reach of NOW stretching from Moscow to Australia, "the Asian companies can eventually grow to be bigger than the U.S. company," Hawryz said.
Executives of both companies emphasized they will localize the products and services developed in the U.S. to be culturally appropriate to the various countries in the region. Eventually, CMGI Asia could spawn new ventures of its own, they added.
CMGI Asia, in which CMGI and PCCW each will hold 50 percent of the shares, itself will form joint ventures with each of the U.S. companies to be brought to Asia. CMGI Asia will hold a 60 percent stake in each of those companies, officials said.
Asked how much CMGI and PCCW intend to invest in the joint venture, Li said a share placement made today, which raised approximately US$380 million, would be sufficient to fund the venture for a while. Further investments are possible, he said.
CMGI, in Andover, Massachusetts, can be reached at +1-978-684-3600, or on the Web at http://www.cmgi.com. PCCW, the flagship company of the Pacific Century Group in Hong Kong, is at http://www.pcg-group.com.