A week in tech, May 15-19

China
Internet
• Baidu.com reported first quarter net income rising to Rmb35.2 million ($4.3 million) from Rmb2.5 million ($312,000). The company ascribed the good performance to a rise in advertising sales, with observers noting that the present results helped in closing the gap on those of Sina Corp. Baidu’s advertising revenue tripled to about $16.5 million. At the end of last year, Baidu registered a 56.6-percent share of the Chinese search market at the end of 2005, according to IResearch. Google, the world's most widely used search engine, had a 32.8 per cent share. Yahoo was the third most-used search site with a 5 per cent share. Google owns a 2 per cent stake in Baidu.com. In a separate development, Baidu announced it’s launching of an online encyclopedia modeled on the US-based website Wikipedia. Called Baidupedia, entries to this new service are said to be censored by the Chinese government while Wikepedia is reportedly blocked by the government.
• Sina Corp announced the appointment of a new CEO. The company announced the resignation of Wang Yan from the post of CEO and his moving to the vice-chairman position. Completing the change was Charles Cao, Sina’s former president and CFO, who was appointed CEO.
• With its first-quarter profit posting a 51-percent rise on the same period in 2005, China.com is reportedly seeking advice from investment bankers about switching to the main board or listing outside Hong Kong. The company reported for the first quarter profit of HK$8.5 million ($1 million) as its revenues climbed 72 percent to HK$130 million ($16.7 million). The report said that even as the company’s strong balance sheet showed more than HK$925 million ($119.3 million) in net cash, the board of China.com did not recommend an interim dividend for the quarter. This decision was explained by an official who said that the company is reserving cash for future mergers and acquisitions in China. The company said it will focus on its online games business this year following its acquisition of the remaining 52-percent stake of 17 Game and transforming it into a wholly owned subsidiary in March. The company said it will increase its investment in Internet content production this quarter in order to draw in more users to its China.com portal.
• 51job Inc. reported 188.8-percent growth in its first-quarter net income to $3.3 million, with the company attributing the growth to an increase in online recruitment advertising. 51job said its revenue went up by 21 percent to $21.5 million.
• Tom Online Inc. announced its financial results for the first quarter ended Mar. 31, posting 32.5-percent increase in its net income to $12.1 million, from the same period last year but down by 4.6 percent from the last quarter. Tom Online’s wireless Internet revenues rose by 36 percent to $45.4 million, over the same period last year and a 2-percent rise over the previous quarter. The company said wireless Internet revenues accounted for 93.6 percent of the company's total quarterly revenues. The company enumerated accomplishments during the quarter: it developed an Internet relationship with CCTV-5 for this year's World Cup tournament, signed a strategic cooperation agreement with Titan Sports, the country's top-selling sports newspaper, to provide joint coverage on this year's FIFA World Cup in addition to a range of other long-term initiatives. The company looks to mobile music as an important driver of growth for its business in 2006.
• Alibaba.com Corp. announced the launching of its business-to-consumer (B2C) services on its Taobao.com online consumer marketplace. Under the offering, Taobao.com is seen as expanding its e-commerce model to include products and services provided by major manufacturers and retailers. Taobao.com said it has signed up manufacturers and retailers including Motorola, Nokia, Haier, Aigo, Lining, Adidas, Giordano, and UT Starcom. Alibaba.com said that currently, more than 10 million small- and medium-sized businesses use Alibaba.com online marketplaces for B2B marketing and sales. Taobao.com said it expects to see a large number of Alibaba.com members joining its new program along with leading international companies. Citing the China Internet Network Information Center, Taobao stated that its web site has about 67.3-percent market share in Beijing, Shanghai and Guangzhou, versus eBay China's 29.1 percent. It added that the Chinese Academy of Social Sciences has found Taobao.com to be the clear market leader in China, with 72.2-percent market share. Currently, Taobao.com now has more than 26 million product listings, nearly 20 million registered users, and over 100 million page views per day. In 2005, Taobao's transaction volume, or Gross Merchandise Volume (GMV), hit $1 billion, which stands for a 700-percent growth from 2004.
Mobile/Wireless
• Research In Motion Ltd. (RIM), a maker of BlackBerry handsets, announced its closing of a deal with China Mobile Communications Corp. With the agreement, RIM said it aims to launch soon a service to be priced between $15 and $20, an amount the company said is less than half of what BlackBerry users in the US pay. RIM has already set up services in Hong Kong. The introduction of the mainland China service is seen as lowering costs for existing BlackBerry users who previously had to pay roaming charges to Hong Kong. The company said the deal will be focused first on servicing foreign business travelers and multinational organizations already using their own BlackBerry devices. In a separate development, China Mobile is expected to launch its own version of the service next week called LeadTone, which is said to be cheaper than RIM’s service.
Media, Entertainment and Gaming
• China Digital Media Corp. announced that it is starting shipment of the new version of its IP-based Set-Top-Box (STB) to be used for the migration of cable TV subscribers from analog to digital system in the city of Nanhai in Guangdong province. The company is one of the first digital TV operators in China to deploy the full functions IP-based STB to the digital TV subscribers. The new IP-based STB is built around the IBM Power PC architecture and equipped with Java platform, Ethernet port for Internet connection and XML-based information browser. These features are expected to become standard in all STB models for migration and sales. IP-based STB is capable of providing interactive services to end-users; such as targeted advertising, interactive TV programs, online games and interactive education services.
• Hangzhou, capital of east China's Zhejiang Province, announced its plans to build a major animation industrial park. Hangzhou identified the 600 hectare-park in the Binjiang high-tech zone, where 40 such companies are already based. The area is expected to accommodate some 100 animation companies. A top official said the park is part of Hangzhou's plan to become the country's capital of cartoons and animation. Hangzhou’s animation industry currently employs 2,000 skilled workers and has produced 8,580 minutes of cartoons and animated TV programs and films in 2005.
Hardware
• Haier announced that the company‘s net profit posted a 35.2 percent decline to Rmb239 million ($29.8 million) in 2005, compared with two other electronics makers Midea and Gree in China. Gree reported a 21.1 percent rise in net profits to Rmb510 million yuan ($63.6 million) in 2005, while Midea reported an 11-percent rise in its net profit to Rmb382 million ($47.7 million), according to a report published by the 21st Century Business Herald. Officials from Haier Electronics Group Co. attributed the results to the rising cost of raw materials and intense market competition. An analyst with Orient Securities indicated that Haier must increase investment to win the competition. Haier’s overseas sales income grew 51 percent last year, accounting for 31 percent of the company’s total. Haier, however, had to invest some Rmb150 million ($18.7 million) to improve products according to European technical standards and another Rmb80 million ($10 million) to build research and development centres in the United States and Europe in 2006.

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