Doug Young
NEW YORK: Just months after pulling out of its high-profile
$200 million joint venture in China, Time Warner Inc.'s America Online
unit said that it is in talks to re-enter the world's most populous
market.
"It's a different business
model.". "We're in some talks for something in China," said
Jonathan Miller, CEO, AOL.
However, he was not more specific about the nature of the new model
except to say that AOL would invest far less than it did in its previous China
joint venture with the nation's No. 1 PC maker Legend Group Ltd.
"We're not going to take major financial risks in Asia right
now," he said. "We need low risk ways to operate so we can see
how the market develops," he added. Miller hoped to fix the deal within a
year, but didn't specify on the nature of his firm's potential partner.
Likely candidates could include China's mobile phone duopoly of China
Mobile (Hong Kong) Ltd and China Unicom Ltd; and its top two fixed line
carriers, China Telecom and China Netcom, which have both spent millions
of dollars over the last two years to build out their high-speed Internet
networks.
Other partners could include China-based online media firms like
Sina.com, Sohu.com and NetEase.com which have all become profitable in the
last two years and were some of the best performers on the Nasdaq in 2003.
All have relied on a combination of paid services, most notably
short-text messaging to mobile phones and online games, to boost their
non-advertising businesses that now account for more than half of total
revenue.
America Online's return to China would come as a quick about-face for
the firm, following Legend's disclosure last month that it bought out
AOL's stake in the stalled project. The pair formed the venture with much fanfare nearly three years ago,
but it never began commercial operations due to what Legend said were
rapid changes in China's Internet market.
Last month, Legend also unveiled a partnership with China Telecom to
promote broadband Internet access on the mainland, a market that analysts
say enjoyed triple-digit growth in 2003.
© Reuters