With Netease's termination of all acquisition talks, Chinese dotcom companies are recognizing the importance of self-reliance.
William Ding, the Chinese Internet portal's founder and acting chief executive said yesterday in a statement, "Our Board of Directors has decided that it is in the best interests of the company and its shareholders that we stop acquisition talks."
Ding said that Netease.com will be best served by focusing on enhancing its management team and increasing the array of services offered to users of the Netease.com websites. The statement came after its potential buyer, Hong Kong-based I-Cable Communications Co Ltd, said it had ended acquisition talks with Netease.
Analysts believe that incorrect reporting of financial reports and disagreements from minority shareholders on the deal with I-Cable were the major reasons for the proposed acquisition.
After suffering negative impacts from radical changes of top executives, Chinese dotcoms are urged to concentrate on their own businesses rather than pursuing acquisitions blindly.
"It is right that the management of Netease quit their pursuit of short-term interests and develop their own businesses," said Lu Benfu, a senior industrial analyst in Beijing.
"They still have good resources and plenty of cash," Lu said. "If they sell their companies now, they may not get a favourable price."
Wang Yan, new president of Sina.com, another major Chinese portal, also expressed his determination to independently expand Sina's business on Monday. "We must make ourselves strong enough before any acquisition talks or mergers," Wang said.
The Web industry also believes that online advertising has much untapped potential and vows to gain market share by launching a classified advertisement service in Beijing, Shanghai, Guangzhou, and Jinan.
(China Daily 06/21/2001)
