Internet services giant AOL has ended its joint venture with Chinese PC maker Legend Holdings, saying the deal was not structured well in order to take advantage of market opportunities.
Legend bought AOL’s 49 percent share in the partnership, which was established in mid-2001 to sell Internet services on mainland China.
Legend’s ownership stake was 51 percent because of government rules restricting foreign ownership. At the time, each company pledged approximately $100 million each, although the unit was never fully funded.
Financial terms of the buyout were not disclosed.
AOL, the Dulles, Va., Internet property of Time Warner
, had hoped the effort would help it raise its profile in China specificially, and Asia-Pacific in general.
But by December 2002, the service was put on hold because of the emergence of broadband and growing competition. In the end, it never launched.
An AOL spokesman told internetnews.com that the decision was mutual and that the ISP still has a great respect for Legend.
AOL still has an interest in looking at the market, but the corporate structure of the joint venture, combined with a rapidly changing market made this effort unworkable, the spokesman said.
A Legend spokesperson could not be reached for comment.