Shanda to Acquire Controlling Stake in Actoz

From ChinaTechNews.com: Shanda Acquires Stake in Online Game Company Actoz

"Shanda (SNDA) today announced that it has entered into an agreement to purchase approximately 29% of Korea's Actoz Soft Company, a developer, operator and publisher of online games. The all cash purchase transaction from shareholders of Actoz is worth approximately US$91.7 million."

"The transaction will solidify an alliance between one of the largest operators of online games in China and a leading supplier of online game content to the China market. Actoz owns 50% of the copyright for The Legend of Mir II, which is the most popular online game in China according to users surveyed in late 2003 by International Data Center." Read more

The9 commits $74m for WoW; World of Warcraft, The9, Vivendi Universal

From DMasia.com: The9 commits $74m for WoW

"Chinese online gaming company The9 has disclosed that it will commit $74.1m on Blizzard's 3D MMORPG World of Warcraft (WoW). The9 is understood to have paid an initial non-refundable licence fee of $3.0m to Blizzard's parent company Vivendi Universal in February this year. The9 has also guaranteed approximately $51.3m in royalties, consisting of quarterly payments from $1.6m to $3.7m over a four year period. The company has further promised to spend $13m for marketing and promotions of WoW, apart from $6.8m for certain events before the game's launch. Vivendi will receive 22 per cent of the face value of sold WoW pre-paid cards sold as royalties. "


WoW already a huge success in S Korea
From The Korea Times: Foreign Online Games Hit Korean Market Hard

"Blizzard Entertainment's Korean affiliate said Monday the World of Warcraft (WoW), its latest offspring, broke the user record in less than a month after its official beta services began Nov. 12.
The company said WoW eclipsed the concurrent user record in the massively multiplayer online role-playing game (MMORPG), but declined to specify the number.
Experts predict the figure of concurrent users would reach up to 160,000 in consideration of its 55 game servers, which outnumbers the most famous homegrown Lineage series." Read more


Comments from an industry insider (CEO, Red Mushroom, a Beijing-based online game studio) on the the9/WoW deal.

"The9's deal for World of Warcraft
They have to get the IPO off to pay Viverdi, otherwise they are going to have liquidity issues.
This is like the deals AOL cut in the late 90s with DrKoop.com and PurchasePro.
US3M upfront
US13M in marketing over the deal
US51.3m in guaranteed royalty payments
US6.8m linked to certain events, which have not yet occurred, prior to the commercial launch of WoW in China
At least US67m guaranteed, if not more!!" Read more

China's second biggest pure play online game operator The9 files IPO

From Pacific Epoch:

"China's second biggest pure play online game operator The9 filed an F-1 with the US SEC on Friday, declaring its plans to raise up to US$107,812,500 via the issue of 6,250,000 American Depository Shares. ... The9 has applied to trade under the Nasdaq ticker 'NCTY'. "

"The9 is expected to launch operations of Blizzard's World of Warcraft in the first quarter of 2005."


From CNNmoney:

"Assuming the offering prices at $14 per ADS, the mid-point of the expect range, the company would have an initial market capitalization of about $325.9 million, according to information available in the prospectus.
The company earned $1.6 million on revenue of $2.3 million for the first six month of 2004, according to the prospectus." Read more


(Older) article from Paul Waide (Pacific Epoch): Why you may want to look inside at The9.

"Korea's Webzen, Vivendi Universal's Blizzard, local portal Sohu—rumored to partnering with The9 on Blizzard's World of Warcraft—and even Intel might get a boost if The9 proves that its built-for-speed, operator-only model is superior to Shanda's "own the value chain" model."

"WoW could take The9's daily revenues from its current 2 million yuan ($240,000) to over 4 million yuan. ... The9 came out on top of a bidding war for WoW in late 2003 (the price it paid for the rights to operate WoW in China was not disclosed, but scuttlebutt has the number as high as $10 million). The massively multiplayer online version of gaming classic Warcraft, which had an estimated 9 million players in China, is expected to be a giant cash cow for the operating company."

"Today there are approximately 15 million broadband subscribers in China, and that figure should top 20 million by year-end. A dearth of affordable entertainment alternatives, the possibility of a revalued yuan, and a focus lacking at The9's major competitors could swing investor support in its favor." Read more

Internet Company Survey: Tencent takes first place; Sohu's Charles Zhang most well-known CEO

From Pacific Epoch:

"Ccidnet, Sina, Sohu, Netease, Tom Online and Tencent recently conducted a joint online survey of China Internet companies. Over 10,000 people participated in the survey to select the best Internet company. Tencent took first place as the company that created the most social value. Sina, Sohu and Netease followed behind Tencent. Tencent also ranked first in terms of social influence, economic value, stock value, and competence. Alibaba, Shanda, Ctrip, Baidu and 51job all ranked high in terms of economic value, but ranked much lower in the social influence category compared to portals. The exception among portals was Tom Online, which received only 1.33 percent of votes in the social influence category. In a ranking of Internet company CEOs, Sohu's Charles Zhang was the most well-known with 32.71 percent of votes."

About Tencent:
Tencent Technology operates the most popular Internet instant messaging service in China. Tencent develops its business in three strategic directions, consumer IM, enterprise IM and Infotainment. Company website

More on Charles Zhang, CEO Sohu:
Asia Inc.com: Who's hot in Asia/China
BusinessWeek Online: Charles Zhang, Sohu.com
China.org.cn: Charles Zhang a Confident Man of Action
Soho.com: Management Team: Dr. Charles Zhang CEO,Chairman of the Board

Can China innovate like Silicon Valley?

Michael Bazeley and Matt Marshall from SiliconBeat (VC Blog) talked with Ronald Chwang (Chairman and President of Acer Technology Ventures, America) about China's ability to innovate.


"... the trick so far has been to apply the innovations here (Silicon Valley) to the market back in China, tweaking products so they fit in with local usage habits, cultural preferences and so on.

But then Chwang says things have been shifting lately. In some areas where China's market size so exceeds the U.S., they're poised to sneak ahead with several technology innovations. Take the mobile phone usage, where China clearly exceeds the U.S. Chinese companies, he says, are developing new ring tone, music/picture/video messaging capabilities not yet seen here. "Just because of sheer population," he says. Short Messaging Service (SMS) is taking off faster in China because of the country's censorship of official newspapers and online news sites. "SMS is China's underground news media," he notes. He predicts new innovations sprouting from that usage. Another area is in DVD media. China already has a higher DVD standard, offering higher quality and more storage capability than the going US standard. And with broadband usage taking off in China, companies are moving aggressively to offer video-on-demand -- something slow to catch on here. So just as Japan forged a lead in consumer electronics, China has potential to lead in several of these new mobile/DVD/broadband areas, Chwang concludes. "

Auction website Eachnet (ebay) loses users to its competitors 1pai and Taobao

From ChinaTechNews:

"Specifically, college users are using the Eachnet site less, and instead they are opting for competitors' auction sites like Taobao.com and 1pai.com (Sina/Yahoo).
The primary cause of this shift in college student traffic appears to be eBay's decision to move their Internet servers from China to the US. According to Chinese government policies, college students are often charged extra fees for accessing offshore Internet websites. Because websites like Taobao.com and 1pai.com reside within China's borders, it is often cheaper for students to access these sites.
A secondary reason is that Eachnet has stopped providing many free services to users. Because college students often lack credit cards, it is easier for them to use the free services at other websites."

IPO China Netcom: China Netcom To List in the U.S. Tuesday

From Pacific Epoch:

"China Netcom will list on the New York Stock Exchange on Tuesday and the Hong Kong main board on Wednesday. China Netcom will announce stock allocation results Tuesday. China Netcom was 28 times oversubscribed by Hong Kong individual investors and 18 times oversubscribed globally. China Netcom set its IPO prices at HKD8.48 and US$21.82 last week. China Netcom may increase share issue by 15 percent one month after its IPO."


From ChinaTechNews: Why China Netcom Really Delayed Its IPO

"In the past weeks, China Netcom filed its prospectus for its long-awaited IPO. But we wondered why Netcom had been delaying its IPO, and now perhaps we have a disturbing reason why. "

"Now we come to the financials. Yes, there buried among all the nice data about growth and opportunities in the IPO prospectus is a rather disturbing bit of information. During the last year, as many investors waited for this IPO, the company delayed. You see, the company was really quite busy. The executives of China Netcom were busy draining the company of cash, so they could then do an IPO claiming China Netcom needs more cash. Buried in the notes to China Netcom's financials, we find that the company decided to make a dividend payment to its Chinese parent sometime last year, obviously before the IPO. And even in US dollar terms, this is serious money. It paid a whopping dividend of almost US$1 billion to its Chinese owners." Read More


More information from Pacific Epoch: China Netcom's Road To IPO

Electronic Arts joint venture with Optisp

Electronic Arts set up a joint venture with China's number three online game operator Optisp.
From Pacific Epoc:
"According to the employee, EA invested at least 500 million Yuan in the joint venture and is the majority shareholder. One Optisp executive said that the cooperation will soon be announced. However, Optisp president Yang Jing told press that no decision on the cooperation has been made yet. Optisp received the publishing rights to EA's FIFA 2005 earlier this year. "


From Pacific Epoch:
Online Game Operator Profile: Optisp
(free but registration needed)

"With millions of registered users and hundreds of thousands of concurrent players, as well as being a telecommunications network service provider approved by the Ministry of Information and invested by CITIC, Optisp is a major player in the high-tech market in China. However, Optisp is a less recognizable name than its competitors Shanda and Netease. This could be explained by the lack of high profile and well-publicized acquisitions and no rumors of an upcoming IPO. "

"Optisp was founded as a telecommunications company in Guangzhou in 1999. While the company is a licensed internet service provider and provides complete network services, the bulk of its revenues and the engine driving the growth of the company is its operation of online games. Optic Entertainment was set up in March 2003 in Shanghai and marked Optisp’s formal entry into the online gaming market. On March 29, 2003 Optisp gained exclusive rights to operate the Korean developed game Legend of Mir 3. This game has become immensely popular in China, reaching the number three spot among online games. Subsequently, Optisp has begun to shift away from its Internet service business to concentrate on online game development and operation."

"Recent Developments and Plans for the Future

Optisp is banking its business on the burgeoning online game industry. The company has plans to launch three new editions of Legend of Mir3 in the coming months. In addition to the commencement of internal testing of Mir3 G in July, Legend of Mir3 Q, and Legend of Mir3 D are also in the words. The G edition will target second and third tier cities. The Q edition is a Q-style version and is scheduled to begin testing before September. The D edition uses a 3D engine and will be available next year. Legend of Mir series developer Wemade will work together with OPTISP to develop all three local editions. Optisp is planning to work with the world's biggest gaming software company, Electronic Arts, in the coming year. At a conference for Mir 3 prepaid card distributors, Optisp general manager Yang Jing revealed that Optisp will choose to operate Sims Online, UO2, or Earth Beyond." Read More

China Auction Market News: Alibaba, Microsoft, EachNet, 1Pai, Taobao

From yahoo finance UK: Microsoft China in talks with Alibaba.com for MSN messenger online auctioning

"Microsoft China is in talks with Alibaba.com to add an online auctioning function to the software giant's increasingly popular instant messaging service, a public relations official at Alibaba.com told XFN-Asia. Both sides have been in talks for some time, although a final agreement is yet to be reached, Hu Yuanyuan from Alibaba.com said."

"Alibaba.com is a rapidly expanding online merchant serving small and medium-sized businesses in mainland China. Its consumer online auction unit, Taobao.com, is one of the most popular online auction sites in the country. "


From Pacific Epoc:

"Alibaba is in negotiations with Microsoft on cooperation in the online auction business, according to a Ccidnet report. Ccidnet is quoting Alibaba public relations department manager Hu Yuanyuan, who confirmed the rumor in a discussion with an unnamed media representative. Hu said that an agreement might be signed before year-end. Microsoft (China) spokesman Chen Ranfeng refused to comment on the issue. Earlier rumors specualted that Microsoft's instant messaging software MSN Messenger will partner with Alibaba's C2C subsidiary Taobao to jointly develop an online auction business."


From Pacific Epoc: eBayEachnet CEO Shao Yibo Resigns

"eBayEachnet chairman and CEO Shao Yibo has resigned as CEO, eBayEachnet announced this morning. Shao will keep his position as chairman. eBayEachnet CFO James Zheng will temporarily take charge of eBayEachnet's daily operations. eBayEachnet said that Shao's resignation will allow him to focus on eBay and eBayEachnet's long term development strategy. At the same time, Zheng was appointed eBayEachnet's COO. According to Sina, Zheng may become eBayEachnet's new CEO. eBay CEO Meg Whitman said that she was satisfied with Zheng's performance and that the management team will not be changed in the short term."


Good overview on the Chinese Auction Market in this Bloomberg article: Yahoo, Ahead in Most of Asia, Gains on EBay in China

"EBay became the first overseas auctioneer to tap China's market when it invested $30 million in closely held EachNet in March 2002. ... The value of merchandise sold on EachNet totaled $250 million on an annualized basis during the second quarter of 2004, according to EBay's earnings statement. A T-shirt sells every 10 seconds on EachNet and an MP3 music player every three minutes, EBay Chief Executive Meg Whitman said in an April presentation in Beijing."

"``We are really excited about the China opportunity,'' says Whitman, 48. ``If things go well, someday it will be our largest market.''

"To take on EBay in the world's most populous nation, Yahoo formed 1Pai.com in January with Shanghai-based Sina Corp., which operates China's biggest Internet portal."

"Yahoo isn't the only challenger to EBay in China, nor the largest. Taobao.com, an auction site founded 16 months ago, expects to handle transactions totaling more than $200 million this year, says Jack Ma, the chief executive of its owner, Hangzhou, China-based Alibaba.com. " Read More

NC-Sina's Lineage II now commercially online in China

From Pacific Epoc:

"NC-Sina's Lineage II began charging Wednesday and recorded over 100,000 concurrent players two hours after the commercial launch, reports Sina. Sina marketing manager Zhang Xin told press that Sina began selling prepaid cards on November 1, and sold 2.4 million Yuan worth of cards on the first day. By November 9, 800,000 prepaid cards worth 22 million Yuan had been sold."


More information on Lineage II:

From gamespot.com:

"However, there are plenty of online RPGs available now, including popular and established games like EverQuest, Dark Age of Camelot, and Ultima Online, and there are plenty more in development. But there's one that's apparently more popular and more successful than any other--Lineage." Read More

Q&A withAaron Rigby Lineage II, NCsoft Producer in North America, about the basic and extensive ideas behind the game.

Yahoo! seeks to expand in China

People's Daily Online on the expansion plans of yahoo! in china:

"US giant hopes to become the No 1 in China by buying up the competition.
This autumn 1,000 search-engine servers from the United States were installed on the 14th floor of an office tower in Beijing. They belong to Yahoo!, one of the world's two biggest search-engine companies.
The office also houses the servers of China's three biggest internet companies - Sohu.com, Sina.com and Netease - and Baidu.com, one of the leading search engines."

"Existing players are watching this invasion with unease. Cash-rich Yahoo! has a market capitalisation of US$46 billion, against about US$1 billion each for Nasdaq-listed Sohu, Sina and Netease.
Few sectors in the mainland are more open to foreign competition than the internet - with the critical exception of content. But the same censorship rules apply to all players, Chinese and foreign. This openness gives Yahoo!, with its billions, freedom to acquire its rivals to obtain a bigger market share. "

"The assault began in November last year, when Yahoo! spent US$120 million to buy 3721 Networld Software, which controls search-engine provider Beijing 3721. "

"In June, it launched the Chinese-language Yisou.com (meaning first search) - the first time it has registered a new website for its search-engine service in a country outside the US. "

"On October 19, Yahoo! announced that it had formed an alliance with 12 mainland companies - which account for more than 50 per cent of the country's internet users - to provide them with e-mail and other services. "

"China clearly is right at the top of the list of that next wave of countries that Yahoo! could and should be more aggressive about, do a better job in and provide better services in," chairman and chief executive Terry Semel said during a visit to Beijing earlier this year." Read More

Shanda overvalued? (Motley Fool, Lip-bu Tan; Walden International)

Good comment from Motley Fool's Tim Goh on the valuation of Shanda:

"During the conference call the company also emphasized that it would be targeting home users and families by focusing more on casual games in the future instead of massively multiplayer online games (MMOGs). Now this would be a fundamental shift in the company's core strategy thus far (MMOGs made up 76% of the company's third-quarter revenue).
The success of Sina's and NetEase's recent MMOG efforts have shown that there is still a huge market for such games, and Shanda's announcement yesterday seems almost as though it is preparing to concede some market share in its main revenue-driver. It's not like casual gaming is devoid of competition, either -- Sina and NetEase also have a presence here, and as established portals they will have an edge in bringing traffic to their game sites. Shanda's planned movement away from its traditional area of strength is a concern, as is the possibility that the competition is nibbling away at its virtual turf."

"Shanda's current market cap at market close yesterday was $2.35 billion. When a company is worth almost thrice that of its industry (IDC expects the gaming sector to be worth $823 million in 2008 ), that is one serious case of irrational exuberance." Read More


The same concerns were also expressed by Lip-bu Tan, chairman of Walden International (One of the first U.S.-based VCs to begin investing in China).

From The Mercury News: Silicon Valley's go-to man in China (free but need to sign up!)

"Tan agrees there's too much hype around China's Internet-related companies. Some shares are trading at 20 to 30 times revenue, ``crazy levels,'' he says. Online gaming company Shanda has an estimated market of $1 billion, but its stock-market valuation is $2.4 billion. ``You know something's wrong,'' Tan says." Read More

Shanda Reports Third Quarter 2004

From ChinaTechNews:

"Online games revenues for the third quarter of 2004 increased 118.0% year-over-year and 19.1% quarter-over-quarter to RMB 341.2 million (US$41.2 million), accounting for 91.8% of total revenues."

"Revenues for the third quarter of 2004 increased 133.0% year-over-year, and 23.0% quarter-over-quarter to RMB 371.7 million (US$44.9 million), and net revenues increased 133.7% year-over-year and 23.1% quarter-over-quarter to RMB 353.3 million (US$42.7 million). " Read More


From YahooFinance: Business Highlights

"In the third quarter of 2004, Shanda continued to develop and expand its business through strategic acquisitions and investments. During this quarter, Shanda completed acquisitions of Bianfeng, a developer and operator of chess and board online games, and Qidian, an interactive online literature portal. In addition, in October 2004, Shanda completed the acquisition of Digital Red, a developer of games for mobile phones, and the purchase of a minority interest in Haofang, operator of a network PC game platform. Shanda will also acquire a majority interest of Haofang in 2006, of which the purchase consideration is based on 2005 earnings." Read More

Rumor: Sina To Acquire Search Engine Zhongsou

From Pacific Epoch:

"A rumor surfaced today saying that Sina (SINA) will acquire Huicong's search engine Zhongsou.com. Sina and Huicong dropped 3.6 and 0.6 percent to close at US$32.94 and HKD1.78 last Friday."

From ChinaTechNews:

"Local technology media sources are reporting that Sina.com may be eyeing a takeover of search partner Zhongsou.com's specialized search activities. Sina's proprietary search directories and engine have been a weak spot for the company, and Sina has bolstered itself by partnering with various companies over the years." Read More


About Zhongsou.com: (from hcgroup.com)

" Since its entry into the Chinese search engine market in 2002, Zhongsou (the former HC Search) has made a lot of achievements. In over one year, it has become the largest Chinese search engine provider in the world, providing search engine services to the well-known websites such as Sina, Sohu, Netease, Tom and thousands of excellent Chinese websites in different areas and industries in China Search Alliance." Read More


Personal comment: As far as I know Sohu and Netease no longer are using Zhongsou as their search engine. (Sohu now uses its own search engine sogou.com and Netease has partnered with google)

Sina, Netease, Sohu: Comments on the earnings reports

The Motley Fool's Tim Goh wrote a trilogy on recent earnings reports from the three big China portals:

Game On for SINA

"...SINA (Nasdaq: SINA) had an excellent third quarter, reporting $52.5 million in revenue, which represented 65% year-over-year revenue growth. While advertising revenue was one of the highlights -- up 61.8% year over year -- mobile services still form the bulk of SINA's revenue, coming in at 60%."

"Mobile services may be SINA's sweet spot, but the company is looking beyond that. In the quarter, SINA launched the online gaming portal iGame, which has 3.6 million users to date despite debuting in July."

"SINA also managed to land prime property from Korean company NCSoft. Lineage 2 is the hottest massively multiplayer online game in the world right now, and Chinese gamers have latched onto the beta to the tune of 2 million subscribers and more than 100,000 concurrent users. The official launch scheduled for Nov. 11 should provide a new steady stream of revenue." Read More


Third Quarter a Breeze for NetEase

"Chinese Internet company NetEase (Nasdaq: NTES) sailed through its third quarter, reporting a revenue increase of 63% year-on-year and net income of $13.2 million, or 34 cents per share (excluding an insurance benefit of $2 million)."

"Like peers SINA and SOHU, NetEase has experienced a decrease from the second quarter in revenue from short message service (SMS)-related services. The company also had a sharp decline in gross margins for this sector -- down 69% to 53.2% from the second to the third quarters. However, the story this quarter for NetEase is the same as last year -- growth in online games and advertising more than offset the decline in wireless services."

"Unlike its fellow portals, NetEase already recognizes a large portion of its revenue -- two-thirds -- from online games. Its massively multiplayer online games (MMOGs) are mature, with one of them already into its fourth expansion pack. Subscriber numbers grew from 430,000 in the second quarter to 555,000 in the third, driving the 21.8% growth in gaming revenue."
Read More


SOHU So Hurt by Suspension

"While third-quarter profits tripled year over year to $0.21 per diluted share and were in line with expectations, fourth-quarter forecasts are for a sequential decline to $0.17 to $0.19, which would be significantly below expectations. This is largely due to leading mobile operator China Mobile's one-year suspension of SOHU's multimedia messaging services (MMS). The effect will be even more prominent in the fourth quarter, because there was only a month's worth of impact in the third."

"SOHU has strength in Web properties -- particularly in sports -- coming in first in traffic rankings for the first nine months of 2004, helped by partnerships with NBA.com and Formula One."

"Priced at 22 times trailing earnings, SOHU is clearly the ugly duckling compared with peers SINA and NetEase, both of which did not experience MMS suspensions. True, the suspension will take its toll, but as SOHU continues to diversify, it should emerge as a stronger, more balanced company. With both the lackluster fourth-quarter and rate-increase news likely to be priced in following this earnings release, now may be a good time to get into SOHU." Read More


Tim Goh's conclusion:

"Having examined these companies, I would recommend that those interested in China stocks buy a basket of all three. There is still plenty of room for growth, and buying all three at the current valuations would allow investors to capitalize on that, while hedging bets should any company underperform."

The Portal War: Sina vs. Sohu

Chinese site interfax reports that SINA has used Sohu's U.S. election slip up as weapon in increasingly competitive Internet market:

" NASDAQ-listed Sohu.com declared George W. Bush the winner of the U.S. presidential election on its website prematurely at 14:30 Beijing time (GMT 8:00), but then promptly retracted the page when it became clear that the vote tally in Ohio was too close to call and might be challenged. SINA, however, picked up on the slip by Sohu and posted a screen shot of Sohu's premature declaration on SINA's own portal. Along with the screen shot of Sohu's website, SINA also posted an article, quoting CCID.net as calling Sohu's early declaration a 'mistake.'"

"Moreover, the SINA article noted that Sohu had made the declaration even earlier than major U.S.-based media outlets." Read More

M&A Rumors II: Sina, Yahoo!, Netease, Shanda, Eachnet

From China Economic Net:

"A source with Yahoo China noted that acquiring Sina accords with Yahoo's logic. Yahoo likes to make up for its weakness through M&As."

"In November last year, Yahoo reviewed the China market, and acquired a Chinese website 3721with US$120 million. In April this year, its founder Jerry Yang noted in Beijing,"The game just got started in China". However, 3721's domain name service utterly does not meet Yahoo's impulse for portals. As a powerful media, Sina has broad business lines, and makes the best target of acquisition for Yahoo in its attempt to become the premier portal in China. In April this year, Sina and Yahoo set up a joint venture"1pai"."

They also assume that NetEase or Shanda could be interested in a merger with sina to keep a competitive position in the chinese market.

"By acquiring Sina, Yahoo will pose pressure to NetEase and other portals. Yahoo's search, email, instant communication technology and management expertise are precisely Sina's weaknesses. Once these combine with Sina's enormous traffic, it will generate huge power. The combination of Shanda and Sina will result in a giant that is an absolute leader in the fields of online games, wireless communication and content. That will put NetEase, which is weak in all of the three aspects, in an awkward position in competition."

"Whether Yahoo, NetEase or Shanda wins at last, the reshuffling of China's portal sector has inevitably started." Read More


From English.eastday: Eachnet denies Sina buy report

"Eachnet.com will not purchase the key rival Sina.com, its chief executive officer Sun Deli said yesterday as quoted by Eastday.com.Sun was clearing a recent message circulating on the market at a press conference when the company published its third quarter financial report for this year."It's totally a rumor", he said, adding that "Eachnet has not conducted any talks for merges or acquisitions with Sina"." Read More

Tom-Skype Partnership

Tom Online and Luxembourg-based Skype Technologies S.A. entered into an agreement to bring to Chinese Internet users a new communication tool and instant messaging service. Co-branded as Tom-Skype in China, the service was launched on October 25 solely through Tom Online.

From skype.com:

"Since its launch a little more than a year ago, Skype’s user base has grown rapidly to more than 13 million worldwide, with up to one million concurrent users."

"“As a pioneer of peer-to-peer technology, Skype is certainly living up to the hype. We are excited to partner with Skype to introduce such cutting-edged technology to Internet users in China.” said Wang Lei Lei, Chief Executive Officer and Executive Director of TOM Online. “Skype has revolutionized the instant messaging market in the world. I’m sure it would be as popular in China. "

M&A Rumors: Sina, Yahoo!, Netease, Shanda, Tencent

From Pacific Epoch:

"China Entrepreneur is keeping the rumor mills busy with its latest article. According to one insider quoted in the article, Yahoo!'s acquisition of Sina met policy obstacles. Sina's influence in China's online media is similar to that of CCTV, so the Chinese government could not allow Sina to come under foreign control. An unnamed source said that Sina has actively pursued merger negotiations with competitor Netease. Although Netease chief architect William Ding said privately that the negotiations have stopped, insiders said that the negotiations are ongoing. According to China Entrepreneur, even Shanda CEO Chen Tianqiao and Tencent CEO Pony Ma are considering the possibility of acquiring Sina."


From China Tech News: Chinese-American Technology Courtship Will Heat Up

"An American takeover of a large Chinese online company just hasn’t happened yet. But recent market conditions have surely increased the probability that there will be a mega-deal. The shares of American companies like Yahoo and eBay hover at 52-week highs, while the shares of Chinese online companies like Sina and Sohu hover not far from 52-week lows."

"You don’t need a crystal ball to forecast that if this situation persists, an enterprising banker will eventually convince an American executive to act. Then the time will arrive for the American to part with some over-valued stock in exchange for some Chinese company's not-as-overvalued stock. There are undoubtedly armies of interested bankers and libido-overloaded Internet executives who are trying their best to do just this. Throw in a dash of Mary Meeker mania and you have all the ingredients for a mile-wide China Internet bubble. "

"It’ll happen. " Read More

Google China's most popular queries 野风无限 教师节 天堂 (Lineage Lineage2)

China
Popular Queries (google) September 2004

1. 野风无限 (A student forum of Zhejiang Gardening Institute)
2. 教师节 (National Teacher's Day)
3. 天堂 (popular computer game Lineage Lineage2)
4. 大唐双龙传 (popular TV series)
5. 刘翔 (China's first male Olympic track and field gold medalist)
6. 国庆节 (National Day of China, October 1st)
7. 刀郎 (Name of a pop singer)
8. 中秋节 (Moon Festival, September 28th)
9. 中国式离婚 (new TV series)
10. 实习报告 (internship report)

source: Google Zeitgeist

The #3 position of 天堂 Lineage is a very positive sign for portal giant sina, as they expect to commence commercial operation of the online game in mid November. "In late August, SINA through its joint venture with NcSoft commenced the open beta test of Lineage 2 game. To date, Lineage 2 has been deployed in 12 regional telecom data centers to service game players throughout China. From October 1 through October 26, the daily average concurrent user count is roughly 120,000. Lineage 2 has entered into its final stage of open beta test and the Company expects to commence commercial operation in mid November. " source: yahoo.finance

21 games selected for the "China Online Game Project"

The game software industry has become one of the most important entertainment industries worldwiede and China has become the fastest-growing market in the global online game industry.
But as most online games played in China are from S.Korea or Japan, the chinese government is trying to suppoert the domestic game development industry.
21 Online Games Selected For Made In China Project"General Administration of Press & Publication (GAPP) released the names of 21 online games selected for the Made In China Online Game Project, reports HC360. The games include Shanda's The Age, OPTISP's Shuihu Online, Netease's Datang, Sohu's Blade Online, The9's Kuai Le Xi You, Kingsoft's The First Myth, Object Software's Aoshi Online and Woncore's House of Flying Daggers. According to GAPP, the games will receive support from related governmental bodies. The 21 games are the first group of 100 online games that the project will select in the next five years."


From Pacific Epoch: China Government To Invest 1B To 2B Yuan In Online Gaming

"According to the project plan, China will develop 100 domestically made online games from 2004 to 2008. Games included in the project will receive support in management, taxation, and capital. MII forecasts China's online gaming market will be worth 1.65 billion Yuan this year and over 6.7 billion Yuan in 2007. However, according to the article less than 10 percent of China's online games are developed in China at present."

China Cracking Down on Internet Cafes

China has closed 1,600 internet cafes and fined operators a total of $12 million for letting children play violent games and for other violations, the government said. Article from EcommerceTimes.com on the Impact on E-Commerce in China: "When you shut off access to that many people, it definitely slows down progress," Heather Dougherty, retail analyst with Nielsen/NetRatings, told the E-Commerce Times. "This could have a huge impact in terms of how China progresses in e-commerce. It's certainly another hurdle."
Of course, it's not only a hurdle for China, say analysts, but it is also a hurdle for those U.S. companies looking to expand into this foreign market. EBay and Yahoo (Nasdaq: YHOO) are two such companies.
EBay started its ingress into China two years ago with the incremental purchase of player EachNet. EBay invested $180 million in two bond transactions that left it with sole ownership of the site that has 6.9 million users who traded $63 million of goods in the second quarter. "

Chen Tianqiao (Shanda Interactive) - second in the 2004 China Rich List

Chen Tianqiao (32) founder, chairman and chief executive officer of Shanda Interactive Entertainment is now the second richest man in the 2004 China Rich List (Chen and his family hold more than US$1.1 billion (9 billion yuan) worth of Shanda shares). Shanda is less than five years old, but is already the world's highest valued online game operator.

Articles on Chen Tianqiao: "Chen makes it big time"
"Gaming Goliath"