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Spring for Chinese Dotcoms?
China's Internet industry seems to be in the doldrums at the moment, since its gateway websites are stranded in Nasdaq, while other domestic on-line firms find it hard to get a second batch of venture capital to finance themselves.
Without a definite timetable for a way out for these dotcom companies, IT experts still paint a prosperous future for the new economic sector.
"In the next two or three years, once they wipe out the bubbles, they will find their own positions in the market," said Yang Weidong, general secretary of the China E-Commerce Association.
The bubbles Yang mentioned refer to the lack of profitable operation mechanism Chinese dotcoms are faced with.
Since dotcoms emerged in China, only three years ago, most of them have merely spent venture capital to attract more pageview and then tried to attract more venture capital.
"They should learn that more pageview and subscribers don't necessarily lead to more advertisement and business," said Yang.
Experts diagnosing these companies suggest that they seek new, stable income resources.
The latest evidences show that China's dotcoms are making preliminary but tough strides. The 21CN, for instance, has officially charged for its newly-developed commercial e-mail service, which tends to be more convenient. Netease.com also announced that it is now charging for its individual homepage service.
Experts agree that combining with traditional industry will be a better way out. Haier Group, a traditional home appliances manufacturer, generated 17.1 billion yuan-worth of online orders last year.
Asiainfo, an IT company engaged in value-added online business for traditional industry, enjoys a double-digit price higher than that of Sohu, a leading Chinese gateway website, though they are both listed on the Nasdaq.
"The trouble of China's dotcoms has shown that the Internet industry can't be isolated from traditional business," said Sun Jian, a professor with the China University of Science and Technology.
Wang Zhidong, CEO of Sina.com, another leading Chinese gateway website listed on the Nasdaq, agreed that the entry of traditional industry into the Internet business will bring new opportunities for the latter.
Meanwhile, merger is also a good way out for money-losing dotcoms. According to well-informed circles, AOL and Yahoo, two leading American gateway websites, have shown interest in buying Netease.dom.
Chen Yin, a senior official with the Ministry of the Information Industry, said that the Internet industry, like any other new technological industry, will inevitably experience affliction during its development process. The Chinese government will help promote its growth through adopting rational and effective policies, he added.
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