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Yam and Google ink deal

Chen Cheng-jen, left, the chief executive of Yam.com, yesterday signed an alliance agreement with Google.com CEO and cofounder Larry Page. PHOTO: CHU PEI-HSIUNG, TAIPEI TIMES

Taiwan's second-largest Internet portal signed an alliance agreement with Google.com yesterday to provide technical support for further development of a Chinese-language search engine.

Yam.com signed the agreement yesterday with US search engine Google.com. After today, Google will provide its search engine services to Yam.com, and the two plan to work together in further developing the Chinese language aspects of the search engine.

"Google and other international companies realize the high value of integrating into Chinese-language portals," said Henry Su, multimedia and software analyst at Jih Sun Securities (日盛). "[But] it's too early to say whether this agreement signifies a revival in Internet interest."

Advertising revenues from the search engine will be shared between the two companies. Yam will find advertisers and collect fees in Taiwan, and pay out a lump sum to Google based on the two companies' agreement.

"This is our first agreement with a Taiwanese company and our first cooperation with a company [here] on the search engine," said Larry Page, CEO and co-founder of Google.

The agreement with Yam puts the Google search engine on Yam's portal site and into the hands of the firm's 1.3 million members. In return, Yam will help develop Google's Chinese-language search engine and implement its Chinese Web site filters -- the process by which a search engine lists the top results of a user's inquiry.

Google is the world's largest search engine, capturing 65 million page views per day on portals worldwide. The company's advertising revenues have increased quickly, according to company executives, because Google's software personalizes advertisements to the search, matching users' interests with specific products. It already operates in 25 different languages, including Chinese.

The dotcom alliance does not include any merger or other buyout possibilities such as were seen last month with the US$145 million deal between Yahoo and Kimo.

According to Hans Wachtel, president of Bertelsmann subsidiary Electronic Media Service, Yam has weathered the dotcom storm up to now by controlling costs and building revenues. Bertelsmann holds a 10 percent stake in Yam.

While Yam is preparing the paperwork for its public offering on the stock market, Wachtel said now is not the time for an IPO. Once investors return to dotcom stocks, then Yam will enter the market, he said.

"At the moment, [investors] are more careful than two years ago, more careful of what can happen in the dotcom industry," Wachtel said. "Valuations have come down to a very low level; some are too low at the moment. I hope we have seen the bottom."
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