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Chinadotcom Acquires Chinese Mobile Developer

Chinadotcom Corp. said it is acquiring Newpalm Information Technology Co., Ltd., a mobile software platform developer and application service provider.

Chinadotcom said it will make a payment of $14 million in cash, and then will pay "the rest on an earn-out basis over the next two years," it said in a press release. Newpalm has projected annual sales of $12 million for 2003.

Newpalm has entered the SMS business and built a customer base of 2.8 million subscribers in China, with a growth rate of over 40 percent per quarter. While Newpalm is a relatively small company, it has established itself as one of the leading mobile software and applications developers in China.

Newpalm's mobile applications and products are compatible with both GSM and CDMA wireless network standards. Newpalm's open-architecture technology also supports both SMS (Short Message Service) and MMS (Multi-Media Message Service).

Newpalm's wireless solution is network-independent and connects to both China Mobile Communications Corporation and China Unicom . China Unicom has been using the Newpalm's mobile application platform in Fujian. Newpalm has two major research and development centers in Beijing and Nanjing, with over 40 mobile application developers.

China's Ministry of Information Industry recently came out with a survey of the wireless market in China in 2002. China's MII said the number of mobile users has reached 200 million, and said the SMS market is growing quickly. Chinadotcom quotes a research report by Pyramid Research, which says that total SMS revenues in China in 2002 were close to $750 million, and will reach $16 billion in 2007.

In a related development, Seattle-based 4thpass Technology has been chosen by China Mobile to provide mobile content services. China Mobile is the world's largest mobile phone service provider with over 150 million subscribers, and will utilize 4thpass MAS technology.

4thpass's MAS technology is known as smart provisioning software that enables mobile operators to manage, market and deliver content, and the technology will be offered to its carrier subsidiaries throughout China. 4thpass is a wholly-owned subsidiary of Motorola and is already working with GMCC, Telefonica Moviles of Spain, LG Telecom in South Korea and Nextel .