There seems to be increasing competition for shareholders attention and money coming from all directions. Here is more on the CMGI and PCCLF joint venture:
HK's Pacific Century CyberWorks, CMGI In Internet JV
Tuesday, January 25, 2000 06:34 AM
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HONG KONG (Dow Jones)--Hong Kong's Pacific Century CyberWorks Ltd. (H.PCW, news, msgs) has confirmed Tuesday it will form a joint venture with U.S. Internet holding company CMGI Inc. (CMGI, news, msgs) that will create and operate Internet-related businesses in the Asia-Pacific region.
The new company, called CMGI Asia, will serve as a holding and management company that will establish Asian operations for CMGI's 18 majority-owned operations, including popular media and commerce network, AltaVista.
CMGI Asia will set up joint ventures with each of the 18 individual CMGI companies in which the PCCW/CMGI venture will hold at least 60% while the individual CMGI companies will own the rest.
The companies didn't reveal how much they will be investing into the venture, but Pacific Century CyberWorks said it has raised around US$380 million via a share placement that will be sufficient to get the venture started. The company said it had completed a placement of 188 million shares at HK$15.80 apiece.
The two companies hope to combine CMGI's strong brand names and vast Internet reach with Pacific Century CyberWork's in-depth knowledge of the Asian market, its soon-to-be launched broadband Internet platform and its management expertise, they said at a press briefing.
Richard Li, chairman of Pacific Century CyberWorks, compared the deal with CMGI to the one set up by Yahoo! Inc. (YHOO, news, msgs) and Japan's Softbank Corp. (J.SFT, news, msgs) to launch Yahoo! Japan. The idea of taking an existing service and making a different version to fit into another geographical region is similar, he said.
"This is a similar set-up, although rather than just target one country, we will target all of Asia including Japan and instead of just taking one brand name (to a new region), we will take four," he said, referring to the four companies out of the 18 that will first be brought to Asia to kick off the venture.
He also noted, as a reference, that Yahoo! Japan has already reached a market capitalization of US$28 billion, compared with US$80 billion of parent Yahoo!. CMGI currently has a market capitalization of more than US$20 billion, he said, suggesting that the gains could be substantial if the joint ventures eventually obtain listings of their own.
"In a year or two we will have at least one of them, or two, listed as appropriate," Li said.
Alexander Arena, managing director of PCCW, added that the Asian version of the companies can grow to become bigger than the U.S. parent companies simply because the customer base is growing at a faster rate.
The first four companies that will be brought to Asia under the joint venture are AltaVista Co., Engage Technologies Inc. (ENGA, news, msgs), a provider of profile-driven Internet marketing solutions, online entertainment company iCast, and 1ClickCharge, which is soon to launch a web payment service.
They were chosen to kick off the new venture as they have the most relevance to the Internet platform that will be launched by Pacific Century CyberWorks later this year, said George Chan, an executive vice president of the company.
Apart from the 18 companies included under Tuesday's deal, companies that joins the CMGI network at a later stage, through incubation or acquisition, will also have an opportunity to expand their operations under similar terms.
"We will be doing whatever we can to keep up with CMGI's pace of acquisitions," Li said.
¸ 2000 Dow Jones & Company, Inc. All Rights Reserved.
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