Metromedia International Group's China Operations Invest in Rapidly Developing Information Services
NEW YORK--(BUSINESS WIRE)--May 27, 1999--
Metromedia China Corporation Forms New E-Commerce
Joint Venture in China
Metromedia International Group, Inc. (MMG:AMEX) today announced that its majority-owned subsidiary, Metromedia China Corporation, formed a new joint venture in China to develop and operate electronic commerce ("e-commerce") systems that will enable the Chinese to participate in the exponential growth of worldwide Internet commerce. Services are planned to commence in the second half of this year.
Huaxia Metromedia Information Technology Limited (HMIT) is an equity joint venture between Metromedia China Corporation (MCC) and China Products Firm (CPF), a Chinese company sponsored by several ministries of the Chinese government to enable the country's thousands of state-owned companies to electronically advertise and auction goods within China and internationally via the Internet. The joint venture will process all of the CPF trading network's transactions and will derive its revenue from transaction fees. CPF distinguishes itself by arranging, supervising and providing credit services to the electronic trade operation.
Stuart Subotnick, Metromedia International Group's President and Chief Executive Officer said, "With this new joint venture, we will extend our participation in China into the rapidly developing areas of information service and electronic commerce. This new joint venture will complement our existing investments in China's telecom industry in line with our strategy of building long-term partnerships with Chinese firms engaged across the full range of China's rapidly expanding information industry."
Mark Hauf, President of Metromedia China Corporation added, "Our new joint venture will focus its initial efforts on the development of the CPF trading network. We anticipate later expanding the venture's scope of business by using software and operating resources developed to secure outsourcing contracts for similar lines of e-commerce business being pursued by other Chinese companies. In addition, we expect to capitalize on the databases of information derived from the CPF network and advertising relationships to form independent trading information content services."
Concurrent with its formation, the new joint venture entered into a long-term service contract with CPF through which all of CPF's present and future e-commerce systems and network management activities will be outsourced on an exclusive basis to HMIT. The joint venture will develop and operate the advertising, trading, accounting and network management systems underlying CPF's trading network. In addition, HMIT will arrange and support Internet access services for the network's member companies on behalf of CPF. The joint venture will directly own all of the operating centers and systems developed in conjunction with CPF's trading network and will have rights to use these assets in other independent business developments. As stated above, services for the CPF trading network are planned to commence in the second half of 1999. |
