Pacific Century CyberWorks, CMGI to form Internet venture
HONG KONG, Jan. 25 Kyodo
Hong Kong’s Pacific Century CyberWorks Ltd. (PCCW) and U.S. Internet conglomerate CMGI Inc. said Tuesday they have formed a 50-50 joint venture for Internet-related business in Asia.
The new company, to be named CMGI Asia and headquartered in Hong Kong, will in turn set up joint ventures with 18 CMGI majority-owned operating companies that would have the world’s third largest market reach following American Online Inc. and Microsoft Corp., PCCW and CMGI officials said.
The first four ventures to be formed will involve Alta Vista, a major media and commerce network, Engage Technologies, a leading provider of profile-driven Internet marketing solutions, iCAST, a multimedia online entertainment company, and 1ClickCharge, a single-click Internet payment service.
CMGI Asia will hold at least 60% of the shares of each new joint venture while the remaining 40% will be acquired by the individual CMGI subsidiary.
PCCW and CMGI made no mention about the money value of their joint venture.
To fund the new businesses, Pacific Century CyberWorks, the largest Internet company in Asia outside Japan, raised 380 million U.S. dollars Tuesday by a placement of 188 million shares at 15.80 H.K. dollars (about 2 U.S. dollars) apiece.
PCCW anticipates the new ventures will help kick off its fully converged broadband service to be launched later this year in three languages — English, Japanese and Chinese — and targeted initially at the Asia-Pacific region.
It is also expected CMGI Asia can provide one-stop shopping services for clients who want to form on-line companies or shift toward electronic commerce.
“We would expand all these companies into all of Asia, including the market of Japan,” PCCW Chairman and Chief Executive Richard Li told a press conference.
CMGI Executive Vice President Hans Hawrysz said the growing Asian market is a “very critical priority” for business expansion. The partnership between CMGI and PCCW will have a good opportunity to build the first true global Internet powerhouse and the largest Internet service in the world, Hawrysz said.
But Li denied that PCCW’s latest deal with CMGI is a conflict of interest with its earlier alliance with Hikari Tsushin Inc., one of Japan’s leading Internet and mobile phone companies.
He said Hikari Tsushin has a different type of setup and serves mainly as a distributor.
“We see the two ventures as actually complementary,” Li said. In December, PCCW agreed to acquire 20% of Golden Power
International Holdings Ltd. which is to become the listed vehicle of Hikari Tsushin in Hong Kong and the holding company for future investments of Hikari Tsushin in the Asia-Pacific region, excluding Japan.
PCCW and CMGI had a 350 million U.S. dollar equity swap on Sept. 23 last year.
CMGI, listed on the U.S. Nasdaq market, has a market capitalization of more than 20 billion U.S. dollars, while PCCW’s market capitalization stood at 19.4 billion U.S. dollars on Monday.
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