HONG KONG (04/07/2000) - The Greater China investment arm of Japan's Softbank Corp. today announced it will team up with Internet content and services provider China.com Corp. in a joint venture that will help Asian companies expand across the region through the Internet.
Also this week, China.com announced investments in several companies in China, the company said in a statement.
The 50/50 deal between Softbank Investment International (Strategic) Ltd. and China.com, both based in Hong Kong, will bring together two of Asia's biggest Internet conglomerates in a share swap deal that represents a total investment of approximately US$40 million, according to a Softbank statement. The companies will swap approximately $20 million of shares each.
The unnamed joint venture will provide technology and business consulting to Asian companies in which Softbank has invested, helping them to expand their operations Asia-wide through partnerships and joint ventures. It will also help companies in which China.com has invested to expand into the Japanese market, and provide consulting and outsourcing for other companies to move from offline business to online business, according to the statement.
The companies last month said that they were planning a joint venture in which each company eventually would invest $50 million. [See "Softbank, Chinadotcom in $100 Million Joint Venture," March 21.]The deal combines Softbank's international reach with China.com's experience in Greater China, Softbank Investment's statement said. China.com operates several general portals, including China.com and Hongkong.com, provides online advertising services through 24/7 Media Asia Ltd. and offers e-business consulting to companies through its Web Connection subsidiary.
One analyst said competition in the Greater China Internet market has grown so intense that foreign companies coming in will all need local expertise and connections as soon as they hit the shore.
"The level of entry has been raised to the point where local players are a necessity for foreign players coming in," said Matthew McGarvey, an analyst at International Data Corp. Asia-Pacific, in Hong Kong. "You can't go it alone," he added.
Softbank Investment was established this year after Softbank acquired the assets of Cheung Wah Development Co. Ltd., a dye and fabrics company listed on the Stock Exchange of Hong Kong. Cheung Wah last week officially became Softbank Investment. The company's aim is to expand Softbank-affiliated businesses into Greater China.
To bolster its presence in the China Web scene, China.com this week announced three major investments in mainland-based companies. The company will acquire 100 percent of Castnet, a Beijing-based software company that constructs and designs Web sites for companies. It also will purchase 35 percent of Stame.com, creator of a virtual community called Guigu that features stores, chat rooms, and online games. Stame.com will be available through the www.china.com portal.
The company also announced on Wednesday that its Web Connection unit will acquire WayX NetSolutions, a Beijing-based company offering domain name registration and Web site creation. WayX counts among its customers Ford Motor Co., Hewlett-Packard Co., Chinese PC giant Legend Computer Ltd. and Sun Microsystems Inc., according to a statement by China.com.
The investments reflect a growing emphasis on mainland China by China.com, the company said in a statement. Of the 10.2 million page views on China.com's Greater China portals in March, 50 percent came from China, reflecting a 700 percent increase in page views from China in the past three months, the statement said.
Softbank Investment is in Hong Kong and can be reached at +852-2406-8913.
China.com, also in Hong Kong, can be reached at +852-2893-8200 or online at http://www.corp.china.com/.