After years of losses, China's three biggest Internet portals are making a sharp turnaround, posting their first profits and turning into a rare bright spot on the slumping NASDAQ.
Investors can thank China's love affair with the mobile phone.
PHOTO AP
The services still have to contend with China's low incomes and slow adoption of online commerce. But the turning point came when China Mobile, its biggest mobile-phone company, introduced a system last year called "micropayment" that lets portals share in revenues for wireless Internet access.
Now NetEase.com Inc, Sina.com Inc and Sohu.com Inc can charge users who visit their Web sites via short message services, or SMS -- brief text messages sent on mobile phones. The portals get about 1.5 yuan (20 cents) each time a mobile user downloads information or games.
"These guys are getting fat off the crumbs off China Mobile's table," said Steven Schwankert, an industry expert in Beijing.
And analysts say that unlike Western markets, which are considered saturated, China still has plenty of room for more fast growth.
China had 200 million mobile phone subscribers by the end of December, and the number is rising by 4 million a month, the government says. China Mobile says users sent 80 billion SMS messages in 2002, up from 15.9 billion in 2001.
NetEase became the first to turn losses around, eking out a US$4,600 profit for the three months that ended in June.
Sohu said it made US$112,000 for the three months ending in September -- its first under US accounting standards. Sina says it expects to report a profit for the year.
Investors have responded by driving up the stock prices of the Chinese dot-coms.
NetEase was the tech-laden NASDAQ's biggest gainer last year as its share price skyrocketed 1,661.5 percent to US$11.45 -- far from its nadir of 69 cents in October 2001.
Sohu was the NASDAQ's fifth-biggest gainer, soaring 433.3 percent to US$6.40 a share. It had traded as low as 87 cents in April 2002. Sina leapt from a low of US$1.40 in April to US$8.43 by the middle of last week.
China's Internet start-ups listed on NASDAQ in mid-2000 at the height of the Internet boom, raising a huge pile of cash.
But all saw their share prices plummet as losses mounted. At one point, NetEase was threatened with removal from NASDAQ after it missed financial reporting deadlines.
Hu Xiaodong, manager of a Chinese investment fund, said he started to notice the turnaround last year, about the time China made its debut appearance in the soccer World Cup in South Korea. Soccer fans piled into sports sites to follow the team.
"There was a big jump in revenues, but it gained momentum and continued to climb after then," said Daniel Mao, chief executive at Sina.com.
Transmission speeds have been rising, from below 9.6kb per second in the summer to as high as 30kb per second by November. Mao said that, because the amount of data is necessarily smaller than that which would be received by a PC, Web surfing is fast enough to be "bearable."
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique