Taiwanese Portals Plan IPOs, Eye Chinese Market

As Taiwan’s Internet market shows signs of maturing, Net firms on the island are considering stock exchange listings and setting their sights on rapidly-growing mainland Chinese market.

The PRC is estimated to have just four million Net users — a tiny proportion of the country’s vast population. However, the number of mainland Chinese connected to the Internet is expected to at least double over the next 12 months and continue rising until, by 2005, the U.S. will be the only country with more users.

The anticipated size of the Chinese market has made Chinese-language portals immensely attractive to investors. Stocks in China.com, floated on the NASDAQ in early July, have soared, despite the fact that the company has yet to make a profit and, according to a recent survey by the China Net Network Information Center (CNNIC), ranks only number 39 on a list of the most frequently visited portals in the PRC.

The success of China.com’s initial public offering has inspired two Taiwan-based portals — yam.com and Kimo.com — to draw up plans for stock offerings. According to Taiwan’s English-language China Post newspaper, both are “relatively certain” to go public abroad and most likely on the NASDAQ. No target dates have been announced so far.

According to Taiwan’s Commercial Times newspaper, yam.com is the most popular Internet portal on the island, with kimo.com being the second most frequently-visited. Both yam.com and kimo.com are currently expanding their presence in mainland China.

Kimo.com’s Chinese strategy revolves around an alliance with Hong Kong Telecom and Netease.com. The three companies call themselves the Greater China Portal Alliance and plan to share advertising and marketing resources.

Meanwhile, yam.com has prepared Web sites which use PRC-style simplified Chinese characters. Taiwan and most overseas Chinese communities use traditional characters.

Both companies have some way to go before they can overtake Sunnyvale, Calif.-based Sina.com, which according to CNNIC is currently the top Internet portal in mainland China. Sina.com has regional offices in Beijing, Taipei and Hong Kong.