Tom.com eyes Chinese computer weekly

Hong Kong billionaire Li Ka-shing's (李嘉誠) Tom.com Ltd may buy a weekly computer newspaper in China, as the company shifts to print media and advertising from its Internet origins.

The purchase of Computer Weekly will be large enough to require public disclosure when completed, Tom.com said in a statement to the Hong Kong stock exchange. The decade-old newspaper has about 700,000 subscribers and had sales of about 125 million yuan (US$15 million) last year.

Tom.com has turned its attention to China in the past two years, investing in outdoor advertising and sports management companies. The world's largest consumer market has been slow to open its media industry to overseas investors.

"It's not surprising that Tom.com wants to break into the China market, and that's why investors are buying the stock," said Alice Leung, deputy head of ICEA Securities Ltd. "It's easier to go into publications related to sports or technology -- things that are not as politically sensitive."

Li, Asia's richest man, took advantage of surging Internet valuations to sell shares in Tom.com in March 2000, prompting would-be investors in Hong Kong to line up for blocks. The company's Web expectations deflated with the Internet bubble.

Amid online losses, Tom.com resorted to buying traditional media and advertising businesses. Last year, Tom.com bought Taiwan's PC Home Publishing Group and is now one of the nation's biggest magazine publishers.

Second-quarter publishing and advertising sales rose 27 percent from the first quarter to HK$248 million (US$31.8 million).

Tom.com also said this week it is forming a venture with a mainland publisher to distribute books and magazines in China, in which it will own 49 percent. Tom.com, based in Hong Kong and incorporated in the Cayman Islands, can't control the venture because it's deemed a foreign company by China.

Tom.com shares closed 4.4 percent lower at HK$2.20 in Hong Kong. They have fallen 43 percent this year compared with a 34 percent drop in the Hong Kong Growth Enterprise Market index.