IMOT having no potential doesn't equate with China having no potential.
China of course does have potential, but have you been reading the news. America is increasingly at odds with the Chinese government. They have all but banished and/or imprisoned all the entrepreneurs in the south of China (the former enterprise zone on the coast where such things as a profit motive were tolerated), and they are having absolutely incredible problems even feeding their population.
Bottom line IMOT is not, nor is it intended to be, a serious company worthy of foreign investment. The facts of their operation speak for themselves. Giving them money puts you at risk. The intelligence of doing so, IMO, really has to be questioned when there is no need for it.
The Chinese government has time and again proved that they are not ready to open up and in fact are cracking down again reversing many reforms. Expecting internet acess for their population without first having a revolution is simply dreaming. As a developing country can you seriously expect the internet (which scares the heck out of the communists) to even be on a secondary priorities list. When you are a totalitarian government and you can't even get adequate food, clothing and shelter to the majority of your population the last thing you want to allow is controlled massive communication.
Microsoft's investment is not even close to significant. Pennies at best to that company. Compaq opening an on line bookstore wouldn't cost much at all. This is not much of an investment by a company that size. Anything I could write a check for I don't think you can consider a significant investment in a country that size. For both of these companies it's more like going into a store and taking a number. It's also good press.
It seems to me that economics dictates that the computer revolution in China be placed on an extremely long time table before it gets close to the U.S., or even western Europe, model. It is really quite basic. People will first buy all the food they need, then clothing and improved shelter. Then items like furniture, indoor plumbing and other sanitation.
Then they will seek to get electricity on a more reliable basis, Maybe a few luxury items -- like a sceond bicycle. Later on they might even be able to get a car..
Then they will need to communicate a greater distance as people become more mobile and acquaintances spread out. The next necessity is a phone.
Computer is quite far down on the list. As you can see by the dismal results IMOT has been able to post when they say they already control 1/3 of their potential market.
There have been some really good articles lately in IVB, WSJ, NYT to name a few on China. Basically all indicate that success is hard to come by and conditions difficult and they are not improving.
So yes, I have been reading almost ALL of the major news stories on international business. And China is a problem that can universally be characterized as the prize that seems to confound everyone. All those people - many with educations - but a system so poor, repressive and backward that making money is so very difficult, and getting it out of the country even harder..
If I were to invest in China, or companies doing business in China I would look for distribution companies, infrastructure such as construction materials and engineering, and other such needs of a developing country. Those are the operations that are currently the business base of anyone seeking to do business there.
I'd say you gotta give it 20 years or more. IMOT sometime in the next year ought to be the bargain it should be (about .10 or less) and then load up on it and forget it. |
