US Internet giant Yahoo is expected to lead the rush of companies seeking greater profits and market share.

"China has much strategic importance to Yahoo following Beijing's successful bid to host the 2008 Olympics and the country's accession to the WTO," said David Lu, a senior director with Yahoo's North Asia operation.

"We believe there will be lots of opportunities for us in the coming years."

Yahoo decided to move its e-mail system servers to Chinese users to Beijing to provide faster and more reliable services and attract more users.

The move enabled Yahoo China's servers to grow from some 12 units in September 1999 to more than 100 this year.

"We have always increased investment in our Chinese operations and we have allocated much money and our workforce to increasing servers since the end of last year," said Lu.

The Internet giant would also introduce its Corporate Yahoo, which aims to help businesses build an internal information exchange platform and will form a backbone revenue pool for Yahoo China.

"We are the first in China to provide such a service and since it is a software-related product, the prospect of profits from Corporate Yahoo will be a big help to our operations here," Lu said.

He believed the demand from local big companies for Corporate Yahoo would rise as they seek to enhance the communications within their businesses.

Yahoo China will strengthen ties with businesses in the country to incorporate the Internet advantages with the marketing strategies of traditional companies.

The service, called Fusion Marketing Online (FMO), has not only attracted interests from international businesses like Dove chocolate and Hall mints, but also China's electronics giant Haier.

Yahoo is not the only enthusiastic firm about the Chinese market. Microsoft also said it would launch the Chinese version of its instant messaging software and search engine MSN Explorer soon. Experts predict the US business, the only one of the top three Internet businesses in the world not to run a website in China, will get a foothold.

With international giants now focusing on China more than ever, local Internet businesses have started to consolidate to strengthen themselves.

Sina.com, China's biggest Internet portal, formally announced it had acquired a 29 per cent stake in the Hong Kong-listed Sun TV Cybernetworks Holding Ltd, a satellite TV broadcaster and programme maker, which covers 70 million users in the Chinese mainland, Taiwan, Hong Kong, and Macao.

The two companies have vowed to become the largest broadband content provider in the country and may set up a joint venture.

"Pressures from international giants like AOL-Time Warner, Yahoo and Lycos may explain why Sina purchased Sun TV's shares," said Xu Yunkai, a NASDAQ market analyst with the Shanghai-based Guotai-Jun'an Securities Co Ltd.

Meanwhile, China's leading e-commerce solutions provider 8848.com also purchased shares in Intelligent Data in September, aiming to strengthen themselves to meet challenges from domestic and overseas rivals.

"With China's entry into the WTO, consolidation among Chinese Internet businesses is far from ending," said Xu.

(China Daily 10/08/2001)