INTERVIEW-GigaMedia CEO says has China launch pad
NEW YORK, Feb 18 (Reuters) - GigaMedia Ltd. (NASDAQ: GIGM) Chief Executive Raymond Chang said Friday in an interview that the newly-public Taiwanese broadband Internet access services provider has a great launch pad to take its business to China.
"We are operating in the best market in Greater China. Taiwan is the largest Internet market in Greater China and we believe with its media resources and its overall infrastructure, it is a great launch pad for us to take the business to other parts of China," Chang said in a phone interview after the company's stock debuted on Wall Street.
Its shares were up more than 200 percent at 81-1/4 in afternoon trading after its $27 a share initial public offering raised $238.4 million. The deal priced 8.83 million shares sharply above an expected price range of $13-15 through Goldman Sachs.
The company has a two-pronged business model: broadband access and broadband content. About 60 percent of the IPO's proceeds will go toward broadband content targeting the Chinese-speaking population around the world. The rest will go toward marketing, expanding transmission capabilities and research and development efforts, Chang said.
"The bulk of our focus is still in the access business. We are well-positioned to enable users at a much faster speed, so about 80 percent of our focus is with access. In about four years' time, we see access as a commodity and at that time we hope to see a 60-40 mix, with 40 percent (of our focus) going to content."
As a result of its strategic partnership with Microsoft Corp. (NASDAQ: MSFT), which owns a 10 percent stake in GigaMedia, it will work with the U.S. giant on a Web TV project that will give GigaMedia the ability to go after the television segment of the market, Chang added.
Recent confusion about China's policy on the Internet has made some longer-term investors hesitant about Chinese Internet-related issues, but Chang said the company is more focused on Taiwan at the moment.
"The focus of our company is to look at Taiwan specifically. They have a great market that could potentially serve mainland China once the confusion surrounding China evaporates. We want to build a showcase; then we can duplicate there," Chang said.
One of the challenges Chang sees going forward is one similar to many other Internet-related businesses: finding a talented workforce. |
