Metromedia International Group Announces New China-Based Information Service Development Plans
NEW YORK--(BUSINESS WIRE)--September 6, 2000--Metromedia International Group, Inc. (AMEX:MMG), today outlined the direction for its majority-owned subsidiary Metromedia China Corporation ("MCC"). This follows MCC's liquidation of investments in China's telecom sector after 1999 changes in Chinese regulatory policy placed sharp limits on the degree of foreign participation permitted in the country's telephone industry. As of the end of August, the Company received $95 million for its investment in Chinese telephony properties and has commenced development of units that will operate inside China's rapidly developing information services sector.
The Company's MCC subsidiary will develop and manage a family of commercial information exchange and transaction processing business units, each targeting operation within a specific Chinese vertical industry sector. The units will focus on providing services to domestic Chinese enterprises and foreign-invested ventures operating inside China. Each will offer a combination of information content and transacting services in an Internet-accessible format and tailored to the trade conventions of its target vertical sector. MCC will also operate its own application software and systems integration unit. All MCC subsidiary units will operate inside China as licensed Chinese companies.
In introducing the Company's plans for continued development in China, Stuart Subotnick, MMG's President and CEO, said: "We learned a great deal during our four-year foray into China's telephony industry. Although that experience ended prematurely, it confirmed most of our views of the huge and challenging opportunity China presents for developing information industry lines of business inside the country."
In preparation for its planned information service undertakings, MCC has already set up two support units inside China. The first is Huaxia Metromedia Information Technology Company; a joint venture licensed to provide software and related support services. MCC is currently in the process of acquiring sole ownership of this company and will further develop it as the exclusive supplier of software to its other ventures and their clients. Huaxia has recruited an experienced Chinese application development team and is negotiating acquisition of various Chinese-developed software systems. MCC also acquired a controlling interest in Twin Poplars LLC; the US-based owner of a Chinese information content services joint venture operating in Beijing and Shanghai. With this acquisition, the Company obtained an experienced team of editors and a network of content sources throughout China. The joint venture is also licensed to conduct e-commerce operations and has launched Chinese and English language websites well-positioned to field trial online retailing and subscriber information management tools.
In summarizing the company's plans, Mark Hauf, MCC's President and CEO, said, "Although this plan presents some specific new business challenges for us, it draws heavily on what we've already developed in China. We've built a strong presence in China and good relationships with the Chinese government. We know how to start and manage business units in the country and how to navigate China's complex regulatory regime. We've managed a good blend of Chinese and US management practices well suited to a largely Chinese-recruited work force applying largely US business development practices." |
