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Technology Stocks : Jimbo's Playhouse/CPQ -- Ignore unavailable to you. Want to Upgrade?

To: Mao II who wrote (2662)	7/1/1999 5:13:00 PM
From: Kenya AA	Read Replies (1) \| Respond to of 12662

M2: I'd like a SUPER COLD COLD COLD glass of chardonnay, thank you! I thought that AOL would have gotten a lot more mileage out of the LEH thing. Verrry disappointing. BO is 115, IMO. It couldn't push through - volume sucked! I don't like it. What's your take?? K

To: Mao II who wrote (2662)	7/1/1999 11:33:00 PM
From: Kenya AA	Read Replies (1) \| Respond to of 12662

China.com Poised to Go Public By Philip Segal Special to TheStreet.com 7/1/99 8:47 PM ET Companies in China have had a hard enough time making money in ordinarily profitable industries. So what are investors to make of the initial public offering of a Chinese company laboring in a field -- the Internet -- famous for huge losses? The company in question is China.com, an Internet "portal" company which also runs the creatively named Hongkong.com and Taiwan.com sites. When China.com goes public on the Nasdaq (probably in mid-July), it will be the first Internet issue ever that concentrates its business on Greater China. The offering is expected to raise $68 million. Maybe more. Like many Internet companies, China.com lost a pile of money last year -- about $11 million. But as the Internet frenzy sweeps Asia, investors seem just as willing to dismiss this cumbersome concern as they were when American companies preceded them to cyberspace. "It's hard to see what it has apart from a name -- China -- and what's a name worth?" asks Simon Cartledge, director at Big Brains, a Hong Kong consultancy specializing in information technology and telecoms issues in China. That may be a little harsh. In addition to a name, China.com has a high-profile U.S. underwriter in Lehman Brothers. It also has partnerships with America Online (AOL:NYSE), which owns 10% of the company, and Hong Kong property group New World Group, which has laid claim to another 20%. It also has the de facto backing of the government: The country's official newswire, Xinhua News, owns a chunk of the company. Despite the hype and the connections, however, China.com hasn't got much of a profile. By China's official, if imperfect, count, China.com stands way down the list of portal popularity. The official China Internet Network Information Center puts China.com at No. 17. Yahoo! (YHOO:Nasdaq) is at the top, followed in fifth place by Sohoo.com, which is partly owned by Intel (INTC:Nasdaq). Also near the top is ChinaByte.com, a joint venture partly owned by another arm of China's propaganda machine, the official People's Daily Newspaper. Who has better connections in China, the People's Daily or Xinhua? That is something few foreign investors are likely to figure out. The turf wars and power struggles between different government bureaucracies make investing in China's state-backed assets somewhat of a crap shoot. Even if Xinhua is the more powerful, the future may not necessarily be bright for China.com. Xinhua is, after all, a propaganda department -- and a sclerotic, Leninist one at that. Will party apparatchiks really be the best owners of what is supposed to be a dynamic, fast-changing business catering to the tastes of regular people? That issue is already cropping up in many evaluations. Duncan Clark, a partner at Internet and telecoms consultancy BDA (China) in Shanghai, cautions that Chinese methodology for tracking site popularity isn't the most accurate. He uses an anecdotal method -- just observing how many emails come from each of the Chinese service providers -- and it's apparent that China.com is way down the list of Chinese portals. "Based on discussions with Internet service providers and content providers, China.com hasn't been a player, really, in the portal market," he says. "It just doesn't have a brand name in China." He says people are more likely to use Sohoo, Yahoo! and Sina, another Chinese portal. Analysts also caution that Internet advertising revenue, one of the drivers for portals, was a mere $3 million in China last year. And BDA's Clark says Net advertising will certainly grow in China, maybe to as high as $130 million over the next four years. But China.com is raising an awful lot of money to snag a portion of that. Perhaps the most troubling aspect of China.com's offering, however, is that it chose to list on the Nasdaq. That highlights one of the most serious issues facing Asian markets. Like China.com, they're not mature enough to attract the traffic.