Heady times for China's Internet: Newcomer Etang.com raises $40 million
BEIJING: For a glimpse at how fast China's Internet market is growing and
how eager foreigners are for a piece of it, consider Etang.com Inc.
The company has raised dlrs 40 million in three months. Its chairman has a
vision and promises to make money but can't say exactly how.
Yet these are heady times for the Internet in China, and Etang.com is not to
be deterred. Founded by two China natives with Harvard MBAs six months ago,
Etang.com launched its portal site in November. Already, the company has 160
employees, 200,000 registered site users and plans to list this year on
NASDAQ, the U.S. stock exchange popular with new technology companies.
"This shows the level of investor interest in the Internet," said Ted Dean
with BDA China Ltd., a media and Internet consulting firm in Beijing. "We're
at the beginning of the Chinese Internet bubble."
In recent weeks, Internet heavyweights such as U.S.-based online auctioneer
eBay Inc. have announced China forays, joining Yahoo! Inc. and other more
established foreign hands.
Finance behemoth Citigroup and Japan's Softbank put dlrs 10 million into
MeetChina.com, an e-commerce venture. U.S.-based GWcom Inc. landed dlrs 56
million from Hong Kong for a portal site serving Chinese customers.
Etang's dlrs 40 million infusion in January came from a syndicate of
investment firms that one analyst described as newcomers to China.
The company is trying to bridge two worlds - the Internet community and
retailing. It has offices in Boston but most of its employees are in
Shanghai, Beijing and Guangzhou.
All of this interest is driven by soaring Internet use and comes despite a
pile of regulations that the communist government hopes will stem foreign
inroads and assert control over the fast-moving online world.
By official count, the number of registered users quadrupled last year to
nearly 9 million. But the true number of users is not known, because many
Chinese share accounts to defray high line fees and other costs.
China's top telecommunications regulator has said foreign stakes in Internet
firms will be limited, although how limited may not be clear until Beijing
joins the World Trade Organization, likely later this year.
China has prohibited Internet firms from posting information not cleared by
the government and has demanded that companies register software that
protects sensitive data transfers - a key tool in e-commerce.
"The Internet is still in its infancy, and everywhere there's big-time
ambiguity about how things are going to work," Dale LeFebvre, Etang.com's
chief financial officer, told reporters Tuesday. "There's enormous change
going on in China and that change
represents opportunity."
Etang.com has targeted China's growing Yuppie community, the group aged
18-35 that the company says is educated, practical and wants to be
sophisticated and international. Its portal site, www.etang.com, tries to
cater to that audience. The company calls them Generation Yellow, a phrase
that it has registered as a trademark.
In addition to the usual offerings of news and free e-mail, Etang offers
four sites on colleges, the job market, personal finance and entertainment.
It lists bars and health clubs in Beijing, Shanghai and Guangzhou.
Eventually, co-founder Haisong Tang hopes to link the Etang brand and its
signature yellow color to consumer products that will be either sold online
or through stores in what he called a "clicks-to-bricks" plan.
"We don't have a clear idea of what products we will offer," Tang told
reporters. When pressed, he added that there was an Etang watch in the
works.
For reprint rights: Times Syndication Service
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