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Here Be Dragons: Internet Perils Grow More Daunting
Here are two facts most wouldn't have expected back in the heady days of
the winter of 1999, when the Internet industry was only the stuff dreams
were made of: the three most popular domestic web sites all successfully
listed on the Nasdaq, and are now all losing money at a furious rate. Top
portal Sina lost $6.9 million on revenues of $5.8 million during the second
quarter. Number two Sohu lost $5.5 million on revenues of a mere $1.3
million and number three Netease lost $3.3 million on revenues of $1.7
million. Their stock prices have all dropped by at least half since initial
public offers of just a few short weeks ago. Forecasters can talk
incessantly about growth projections but there is nothing to the sector now
and there won't be for years.
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Another unsettling note: Guowang – the leader in registering as domain
names Chinese translations of Western brands – took out full-page ads in
several newspapers this week. The ads compare recent court decisions over
the rights to these names against Guowang and in favor of firms such as
Proctor & Gamble as comparable to Western imperialism in the 19th century.
They call upon China to defend its "cyber-territory." Patriotism: last
refuge of the unprofitable.
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China
E-Bytes
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| Pharmaceuticals are being opened to foreign investment. Five domestic
companies have letters of intent for joint venture chain stores, including
one with Wal-Mart. Medical treatment services and the import of premium
medical equipment are also being liberalized. |
| Shanghai Auto, which has billion-dollar ventures with Volkswagen and
General Motors, enjoyed a 17 percent increase in profits to $53 million in
the first half of the year. |
| The state media reports problems with establishing a high-tech board in
Shenzhen by 2001. This is the most over-reported story in the Western press,
as the board will either be delayed significantly or flounder or both. |
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| Keep
up with the fast changing business environment in
China, the world's biggest and fastest-growing emerging
economy. Sinomania! recommends Orbis
Publications, Experts in Emerging Markets, for
a full range of in-depth coverage on China including
daily/weekly/monthly reports and more. |
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