, Electric Power
 , Alcohol Industry
 , Supermarket Industry
 , Catering Industry
 , Steel Industry
 , Aircraft Industry
 , Bus Industry
 , Economical Hotel Industry
 , Garment Industry
 , Laser Industry
 , Electric Bicycle Industry
 , Home Appliances Chain
 , E-Payment Industry
 , Ship-building Industry
 , Service Providers
 , Excavator Industry
 , Solar Cell Industry
 , Aviation Transportation
 , Cosmetic Industry
 , Express Industry
 , Logistics Industry
 , Packaging Equipment
 , Publications Industry
 , Real Estate Industry
 , Web Portals Industry
 , Pharmaceutical Industry
 , Automotive Components
 , China¨s Banking Industry
 , China¨s Oil Industry
 

M&A Analysis and Research Report on Web Portals of China

Abstract:

1. The status quo of web portals in China

There has been a leapfrogging development in Internet with more winning formula and ads on the scene. The number of netizens is on the crescendo by 20% to 30%, which was above population of 0.1billion in 2005 following America as second. It is expected the number will up to 0.15 billion in 2006.

The opportunity and challenge are going parallel as fast development and revamping in this industry. The future web portals looks up for that:

First, Large room for net ads

There is great potential within the Internet market. The market scale of net ads in 2004 was RMB 1.9billion, which is supposed to be RMB 2.7 billion and RMB 4 billion in 2005 and 2006 respectively while growth rate in 2004 was 75.9% compared with 2003. The analysis material identified by us . shows that with the resuscitation in Internet, the net ads has been moving into next stage. The China 's net ads merely shares 1.5% in ads industry lowering counterparts in other nations. That is shares 5-7% in America and Europe and 4% in Japan and Korea . With expanding of web industry and population in users, China 's Internet will keep abreast with foreign counterparts as marshal the potential in this market.

Market scale of China 's internet ad

Second. Promising market in Internet games

Internet games have been in China for six years and there was an unbelievable growth rate at embryonic stage. In 2001, the growth was exceeding 700%. The growth rate remained steady over the course of the past several years. The market scale was RMB 2.7 billion in 2004 growing 51.5% over the past year. it has been moving at 50.6% in 2005 with RMB 4.07 billion in market scale.

The survivability of net game manufacturers is not optimistic though great potential waiting to be harnessed. So far, there were 15% of manufacturers won out while 85% were no sign of growth or losing. Internet industry is facing M&A with the loser being boxed out of the market.

As Internet has been made more accessible to the general public along with improved livelihood if the mass, more people will view net games as their recreational activity. Since the demand is tangible, the high growth rate will stood stubbornly still luring in more private venture capital.

Market scale of China 's online game

Third, Competition in web portals grow ferocious

For a long time, the market was shared by Sina, SoHu and Neteasy. The fierce competition has been coming by with TOM, Tencent, and MSN in Chiese version and Yahoo 3721 coupled with foreign websites stepped in. Therefore, number of websites has been seeking novel ideas while put more portfolio on the market.

Forth, Vying for diversified products

On April, 2005, SoHu has adopted a transformed model into content buit-up from targeting market of Sina. In early 2004, Neteasy upgrated its home page. Year after that, the changes in phases swept through all of its programs with content built-ups went hand in hand with marketing promotion.

Sina news stayed focused on providing maximum new volume in real time while Neteasy inclined to make news deep and novel in analysis. Sohu had shown the savvies by its own as possessed large chunk of Internet asset. Chinaren, Go2map, 17173, Focus, Goodfeel, Sogou and SuHu have been harnessing the synergies from each other which is supposed to be meaningless in dog fight during M&A. Tencent having managed to put real time communication, net games and web portals on the website after purchased number of stock of Shenzhan Domain Network became the superstar in web portals. The demand from customers has been striving factor for the development of Internet. At the beginning, more information was needed to be put together and then accuracy was the goal in gigantic flow of information which gives the birth of searching engine. IM was on the scene to meet the needs of the users.

Therefore, based on us ., the companies can make progress as standing on leading position by keeping its own characters and virtues when facing ferocious competition.

2. The character and motives behind M&A in web portals

M&A is cutshort to stake out territory, which was self-justified in this sector. From sell phone message, net ads, net games to searching engine have been widely accepted. At present, the market is immature. The value of web portals has never gone beyond as tool from long run. M&A is intended to make website more competitive. We believed that as Internet brings home the essential to the general public and sector competition trickles down, the kaleidoscopic array of website, idiosyncratic content and competition in multidimensional levels will make it different upon M&A from deep- held value. On the other hand, the boring website will be knocked out of the market or acquired by big companies. The survivors will be diversified in their function and structure. All of this can be seen in big companies. We ha ve identified number of reasons behind M&A:

First, the shifting strategy is driving force behind M&A. The transformed model and trimming down cost come at critical juncture when the content and major scope of business is not cut clear. By doing so, the intensified effort can be put on products on which their advantages and blockbusters are reflected. Through asset reshuffle, the upgraded medal and leading position are come by.

Second, to meet the demand of low-budget expanding. Though some companies have forerun in certain areas, they felt uncomfortable when dabbling at new territory they're unfamiliar with or cost them a lot under the circumstance of short life circle of a new product in the age of changing. Through M&A and reorganization, the framework of new business for expanding at low cost and injected resources as impetus beyond industry will come true. The shining example is provided by the marriage of AOL with Time Warner. As biggest web portal, AOL acquired American media tycoon as amplified its on-line business. With that, AOL saved USD 1 billion. One year after take-over, capital flow has climbed 30%. Bob Pittman, the president of AOL, offered that integration is our tactic and artery as well which will drive up profit return for new business.

Third, the maximum number of web portals in one Asian nation is 3 to 5 while in Korea , Taiwan and Australia 1 to 2 is the maximum. Under this backdrop, for those less competent ones, being acquired is their way out. China has stepped in the age of M&A. From April 2000, M&A has been occurred hundred times, in which tumultuous cases coupled with resources reshuffle among specialized website were never seen to stop. One thing is certain that M&A has been playing to its peak in China . Sina, SoHu and Neteasy have been concerning M&A either for the purpose of stock market operation or self performance since number of website companies on the NASDAQ was hammered out. M&A grows common in modern economy that has stepped in globalization worldwide. The transaction is above USD 0.34 billion growing 3.5% over last year. In the Internet era, market development is never absent with M&A. YAHOO, LYCOS, MSN and AOL have became the major players on the market. In Japan , market share of YAHOO has forerun the second player more than doubled; in Korea , YAHOO and LYCOS are the two biggest companies in parallel. In that sense, M&A can be viewed as a new strategy to compete rather than the make-shift under the pressure from capital.

Last, M&A among big companies for combining advantages. This type of M&A happened to harness the synergies form each other as to slim production cost, expand production scale and sharpen the edge to compete based on shared information, technology, capital and market. Take combination of Terra with ISP and Lycos ICP for instance, the large registered customer basis will boost web traffic to Lycos that became the biggest web portal in Latin America and profit-oriented Terra will offer steady stream of capital to Lycos that is leading life on ads income. In turn, Lycos as the third searching engine company, will help Terra move in America as to enhancing its influence.

List of M&A case among web portals

Case

Time

Case in brief

China.com purchasing newpalm

2003

In case of China.com purchasing newpalm, a top 10 service provider for message, the take-over was hammered out in cash worth of USD 14 million equivenlant to RMB 0.116 billion.

SoHu purchasing Focus

2003

The position of SoHu has been elevated in Internet community with acquisitions over17173.com, the biggest net games and ChinaRen, a biggest alumni record in net community.

Mop purchasing Donews

2005

The agreement has been reached between Mop affiliated to ChinaInterActiveCorp and Donews, famous IT community. It is said that Mop will bring Donews under its umbrella through 100% of convertible.

Qi Hu Network purchasing etang.com

2006

After acquisition, the domestic business of etang will be incorporated into Qi Hu Network. Etang

3. M&A trend on web portals

The backdrop of M&A in China is widely apart from industrialized nations, which sets the parameter to acquisition behavior. There were number of cases in 2005 when Sina and SoHu have been sweeping the sector. However, the M&A was lack of strategic willingness, novel idea and failed of translating influence into profit.

Multinational M&A will be the trend in the future. Win-win game has been on the headline in M&A among other industries. This type of M&A can effectively boost domestic companies to compete as being bound with multinational that have power several times, dozen even hundreds time larger than its own. It's self justified that the Chinese companies that have stood on inferior position will gain win-win situation when acquired by Internet gurus. This is not necessarily mean win for all per se, but for common goal. In other words, the wining position is not come by at the expense of vested interest or survivability of the other side.

There will be more cases of M&A among big companies which is evidenced with preponderant cases committed by gurus engaged in. The scale M&A not only help bring profit, trim down cost and sharpen edge but exert great influence upon market where the combination among the big ones will augment their reputation within the community. The noticeable difference with industrialized nations is that the companies that participated into property transfer are small companies. The only way for website to succeed is to showcase their strong points in budget and idiosyncrasy. Low tangible cost is unique advantage of websites over traditional ones. We believed that cost advantage will not make the company forerun over its rivalries in that any profitable way for business will spread out and lose its attraction over time, which is not deemed as long term strategy of a company. Regurgitation over managerial technique, brand new know-how and way of communication with customers. Therefore, companies will seek for novel savvies and leading position in pursuing value. Idiosyncrasy, on the other hand, is reflected in portfolio of products. Only by taking the leading position can a website successfully transform the technology into competitiveness. The case of Yahoo purchasing Overture is to seek savvies of the other; SoHu purchasing Go2map indicates the importance of map searching technology in 3 Generation. We believed that competition based on the capability of implementation capacity from which the idiosyncrasy manifested. Sina purchasing Xunlon and Wangxing is intended to make leading position in wireless business; SoHu acquired 17173 and Focus can viewed as push operation into next stage through scale economy.

Inter-regional M&A. the M&A among domestic firms will experience metamorphoses from regional take-over for group, merger within inter-economic zones for conglomerates and multi-nationals by moving out of the country. As for status quo in websites, China has gone through from first phase to second one while foreign companies took precedence over Chinese counterparts in trans-national M&A. If China 's companies fail to make difference, it is possible for debacle in this sector as no bargaining position at all in this area.

Entrepreneurial culture has been more concerned than before. Whether integration is successful or not at cultural level is inextricably linked with the further development in this community. From relevant statistical numbers, the successful rate of asset reshuffle is 43% while in 80% of those failed cases; abortion of cultural integration took toll. In order to set high expectation and spirits among staffs, transform business model, scale new height for the company and shape the company in a new face without more tangible input or less, M&A should put corporate philosophy and management know-how on the same page with acquisition. Idiosyncrasy will form competitive advantage through creating favor in price, service and blockbuster for customers. However, this advantage proves ephemeras with the same reason in fierce low-cost competition leading to bankruptcy under rampant initiation aiming adversaries. For long-term competitiveness, websites should take root in core value as to gain permanent momentum. M&A is the beginning with deep innovation followed up.

By look at M&A in Internet horizontally, there were few cases where the value of post-M&A is larger than the pre-M&A phase. The web portals after acquisition encompassed spotlights cross e-commerce, web portals, searching engines, e-mail and real-time communication. Ar the same time, the snagging problem plagued this sector, among others, different managerial savvies, individualized background and incompatibility among businesses. Without successfully deal with this problem, more value is hard to obtain.

For the sake of M&A with gigantic monster resulted from this procedure, acquisition in Internet community is meaningless without changing the status quo.

The M&A at embryonic stage is not the best option for this community which is supposed not to make this sector immunized from another around of tumultuous take-over. High-tech and innovation are the impetus behind M&A rather than blindly seeking for scale and proliferating array of business as to make product mix meaningful.

Content: 
Chapter 1 Overview of research
Section 1   Background of the research
Section 2   Contents of the research
Section 3   Method over the research
Section 4   Team for the research
Section 5   Conclusion for research
Chapter 2 The Status Quo of Web Portals Overseas
Section 1 The Charater of foreign web portals
Section 2 The Competition among foreign web portals
1. America
2. Britain
3. Germany
4. France
5. Japan
6. Korea
Chapter 3 The Status Quo of China¨s Web Portals
Section 1 the Profile of China¨s Internet
Section 2 the Investment of China¨s Internet between 2006 and 2007
1. Market scale of web portals 
2. Targeted investment in China¨s web portals
3. Profitability of China¨s web portals
Section 3 Performance of China¨s web portals
1. Wireless service
2. Hotline service
3. Corporate service
4. e-commerce
5. Net ads
6. Net games
Chapter 4 Investment Policy Environment in China¨s Web Portals
Section 1 Macro-economic policy upon web portals
Section2 Industrial policy on this sector
Section 3 Deep analysis on Internet in China
Chapter 5 Major Factors Exerting Influence on Web Portals
Section 1 Risk in development in web portals
1. Competition in web portals
2. Entering barrier into web portals market 
3. Circumventing barrier in web portals market
Section 2 The existing problem in China¨s web portals
Chapter 6 M&A in China¨s Web Portals 
Section 1 The Background of China¨s web portals
Section2 M&A trend of China¨s web portals
1. Web portals with Comprehensive contents
2. Professional web portals
3. Specialized web portals
Section 3 the Stumbling stone on M&A in China¨s web portals 
1. Policy
2. Organizational structure
3. Capital
4. Engineering side
Chapter 7 Case study in Foreign Web Portals
Section 1 Daum, the top one in Korea purchasing Lycos
1. The Background and motives of M&A
2. M&A procedure
3. Solution and lessons from M&A cases
4. Strategic analysis of M&A
Section 2 NHN, the second one in Korea purchasing Unionmore
1. the Background and motives of M&A
2. M&A procedure
3. Solution and lessons from M&A cases
4. Strategic analysis of M&A
Section 3 RAKUTEN, Japan e-commerce purchasing LinkShare, American counterpart
1. The Background and motives of M&A
2. M&A procedure
3. Solution and lessons from M&A cases
4. Strategic analysis of M&A
Section 4 Murdoch purchasing MySpace.com, a fashion web portal
1. The Background and motives of M&A
2. M&A procedure
3. Solution and lessons from M&A cases
4. Strategic analysis of M&A
Section 5 AOL purchasing Lightningcast
1. The Background and motives of M&A
2. M&A procedure
3. Solution and lessons from M&A cases
4. Strategic analysis of M&A
Sectoin 6 meetic purchasing Yeeyoo with USD 20 million
1. The Background and motives of M&A
2. M&A procedure
3. Solution and lessons from M&A cases
4. Strategic analysis of M&A
Chapter 8 M&A Trend of Foreign Web Portals Upon China¨s Counterparts
Section 1 The Development of web portals home and broad 
1. Investment character
2. Targeted investment areas
3. Marketing performance
4. Investment product mix 
5. Investment trend
Section 2 M&A and investment of Yahoo in China 
1. Investment of Yahoo in China
2. Core competitiveness
3. Investment and M&A trend of Yahoo
Section 3 M&A and investment of eBay in China 
1. Investment of eBay in China
2. Core competitiveness
3. Investment and M&A trend of Yahoo
Section 3 M&A and investment of Google in China
1. Investment of Google in China
2. Core competitiveness
3. Investment and M&A trend of Google
Section 5 M&A and investment of Microsoft in China
1. Investment of Microsoft in China
2. Core competitiveness
3. Investment and M&A trend of Microsoft
Section 6 M&A and investment of AOL in China
1. Investment of AOL in China
2. Core competitiveness
3. Investment and M&A trend of AOL
Section 7 M&A and investment of NHN in China 
1. Investment of AOL in China
2. Core competitiveness
3. Investment and M&A trend of NHN
Chapter 9 Foreign Company Waiting for Coming in
Section 1 TimeWarner 
1. Corporate performance
2. Core competitiveness 
3. The Background and motives of corporate 
4. Investment trend and M&A feasibility of company 
Section 2 Altavista
1. Corporate performance
2. Core competitiveness
3. The Background and motives of corporate
4. Investment trend and M&A feasibility of company
Section 3 ZDNet
1. Corporate performance
2. Core competitiveness
3. The Background and motives of corporate
4. Investment trend and M&A feasibility of company
Section 4 Excite
1. Corporate performance
2. Core competitiveness
3. The Background and motives of corporate
4. Investment trend and M&A feasibility of company
Section 5 Goo
1. Corporate performance
2. Core competitiveness
3. The Background and motives of corporate
4. Investment trend and M&A feasibility of company
Chapter 10 M&A Case for Major Web Portals  
Section 1 Qi Hu Network purchasing etang 
1. The Background and and motives 
2. M&A procedure
3. Solution and lesson of M&A 
4. Strategic integration analysis 
Section 2 China.com purchasing newpalm
1. The Backgroud and motives
2. M&A procedure
3. Solution and lesson of M&A
4. Strategic integration analysis
Section 3 SoHu purchasing Focus
1. The Backgroud and motives
2. M&A procedure
3. Solution and lesson of M&A
4. Strategic integration analysis
Section 4 Sina purchasing UC real time communication platform
1. The Backgroud and motives
2. M&A procedure
3. Solution and lesson of M&A
4. Strategic integration analysis
Section 5 Sina purchasing Plenus
1. The Backgroud and motives
2. M&A procedure
3. Solution and lesson of M&A
4. Strategic integration analysis
Section 6 Oak Pacific Interactive purchasing Mop and Donews
1. The Backgroud and motives
2. M&A procedure
3. Solution and lesson of M&A
4. Strategic integration analysis
Section 7 edeng purchasing 365ju
1. The Backgroud and motives
2. M&A procedure
3. Solution and lesson of M&A
4. Strategic integration analysis
Section 8 Quickseeks purchasing 8848, domestic e-commerce website
1. The Backgroud and motives
2. M&A procedure
3. Solution and lesson of M&A
4. Strategic integration analysis
Chapter 11 Major Player of M&A in China¨s Web Portals  
Section 1 Sina
1. Corporate profit model
2. Corporate performance 
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility 
Section 2 Neteasy 
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 3 SoHu 
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 4 TOM 
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 5 Baidu
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 6 Shanda.com 
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 7 China.com 
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 8 eNet 
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 9 QQ 
1. Corporate profit model
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 10 21CN
1. Corporate profit mode
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 11 Alibaba
1. Corporate profit mode
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Section 12 Joyo
1. Corporate profit mode
2. Corporate performance
3. Competition in IT
4. Market competitiveness
5. Major customers
6. Strategic development of the company
7. M&A trend and feasibility
Chapter 12 Industry Chain & M&A in China¨s Web Portals 
Section 1 M&A possibility between web portals and IT manufacturers
Section2 M&A possibility between web portals and net terminal market
Section 3 M&A possibility between web portals and ads companies
Chapter 13 Possibility of M&A in China¨s Web Portals
Section 1 M&A in big network 
1. Sina
1.1 Corporate strategy
1.1 Bottleneck for development 
1.1 Possibility of M&A
1、TOM
2. TOM
2.1 Corporate strategy
2.1Bottleneck for development
2.1Possibility of M&A
3. Neteasy 
3.1 Corporate strategy
3.1 Bottleneck for development
3.1 Possibility of M&A
4. SoHu 
4.1 Corporate strategy
4.1 Bottleneck for development
4.1 Possibility of M&A
5. Shanda 
5.1 Corporate strategy
5.1 Bottleneck for development
5.1 Possibility of M&A
6. Baidu 
6.1 Corporate strategy
6.1 Bottleneck for development
6.1 Possibility of M&A
Section 2 M&A in small and msdium companies
1. Ccidnet.
1.1 Possibility of M&A 
1.1 The Value of M&A
2. eNet 
2.1 Possibility of M&A
2.1 the Value of M&A
3. Alibaba 
3.1 Possibility of M&A
3.1 The Value of M&A
4. Joyo
4.1 Possibility of M&A
4.1 The Value of M&A
2、21cn 
5. 21 cn
5.1 Possibility of M&A
5.1 The Value of M&A
Chapter 14 Possibility of M&A by Chinese Firms in Overseas
Section 1 The Goal 
Section 2 Marketing model
Section 3 Value
Section 4 Stumbling block on the road
Chapter 15 Competition in M&A of China¨s Web Portals 
Section 1 Exceptional virtues 
Section 2 Cost advantages 
Section 3 Market density 
Chapter 16 Risk in M&A of China¨s Web Portals 
Section 1 Asset reshuffle analysis 
Section 2 Change in personnel 
Section 3 Corporate management 
Section 4 Entrepreneurial culture
Section 5 Strategic analysis for company 
Chapter 17 Recommendation for M&A in China¨s Web Portals

Contact Us:

EMAIL: bd#acunion.net acunion#sina.com
Tel : 8610-65958131 / 65853379 -801   
Fax : 8610-65855276

 


Copyright©2004-2012 Asia Consulting Alliance All Rights Reserved
井猖嗤 巖男JW 
奨ICPC050764