RealTime IT News

AOL Buys Stake In IPO-Bound China.com

America Online Inc. (AOL) has acquired a 10 percent stake in Hong Kong portal operator China.com Corp., according to sources and press reports.

AOL already has an agreement with China.com's sister company, China Internet Corp., to jointly launch the AOL Hong Kong Internet service later this year.

Industry observers see the move as attempt to boost China.com's image ahead of it's upcoming $50 million IPO on NASDAQ.

China.com representatives refused to comment on AOL's investment.

China's government news agency, Xinhua, has a majority stake in CIC and an undisclosed stake in China.com -- a fact that hasn't always been popular in Hong Kong and Taiwan.

Pundits therefore see AOL's investment as a move to legitimize China.com as a player in Greater China in the eyes of investors.

This is further supported by last weeks move by Hong Kong property giant and telecom provider New World Infrastructure (NWI) to increase its equity in China.com Corp. to over 20 percent. Upon completion of the deal, NWI will be the largest shareholder of China.com, according to company representatives.

China.com's Internet properties include China.com, China Wide Web, Hongkong.com and Taiwan.com. It also operates 24/7 Asia, a partnership with U.S. ad network 24/7 Media, and the Web Connection, a regional e-business solution's provider.

Ellen O'Gorman, China.com's spokesperson, said that the aggregated amount of registered users on its sites was over 400,000.

According to several sources, China.com Corp is also working on a new project -- a Chinese and English Geocities-type Web community called Cosmozone.com.

Targeting the global Chinese community, the virtual community will possibly provide services like free server space, additional space leasing, chat rooms, free e-mail, classifieds, auctions, online shopping, and directories.

China.com officially declined to comment on the project.

Currently, Renren.com is the only Geocities-category site that focuses on users in Greater China.