Sat, Aug 09, 2003 page11

• China's Internet survivors hit new highs

  • REUTERS
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  Daniel Chiang (姜豐年), a survivor of China's Internet bust, is no longer embarrassed to go out.

  In fact, the 45-year-old chairman of China's biggest listed Internet media firm, Sina.com Corp (新浪), says he quite enjoys meeting his investors now the company's share price has risen 19-fold over the last year.

  But the Taiwan-born basketball enthusiast says he used to feel uncomfortable, especially when Sina stock flirted with the US$1 level in 2001 after the tech bubble burst.

  "Sometimes they would say, `Oh Dan, I bought so many Sina shares,'" said Chiang, whose own shares are now worth about US$66 million compared with just US$3.5 million a year ago.

  "I felt embarrassed and bad because they all lost money back then," he said.

  Once dismissed as washed-up relics of the Internet boom, Sina and its US-listed Chinese rivals Sohu.com Inc (搜狐) and Net-Ease.com Inc (網易) have risen from the rubble of the tech bust by posting their first-ever profits over the last year.

  Shares have been among the best performers on the NASDAQ since beginning to take off last October.

  Much of their success has come on the back of triple-digit growth in online advertising and mobile text messaging revenue.

  The trio are now three of Asia's most valuable Internet firms behind Yahoo Japan Corp, with market capitalizations that now range from US$1.4 billion to US$1.7 billion -- a reminder of headier Web times.

  Shares of all three firms have risen as much as 25 times in the past year, making multimillionaires of a small group of entrepreneurs who kept faith even as their investors fled.

  Charles Zhang (張朝陽), Sohu's founder and chief executive, is now one of China's richest men. His eight million Sohu shares would give him a net worth of US$326 million, placing him in the top 10 of Forbes magazine's list last year of the richest Chinese.

  Other survivors include NetEase founder William Ding (丁磊), whose shares are worth more than US$700 million.

  Zhang, a slightly built 39-year-old who climbed Mount Everest in May, confessed he just bought a bigger apartment in Beijing after living in rentals for most of his last eight years in China.

  "It's a gradual realization," he said of his sudden wealth. "I think about it, and also in truth I've spent some time improving my quality of life. But mostly I'm still working."

  Zhang founded Sohu in 1996 when he was still a student at the Massachusetts Institute of Technology, cobbling together an investment of US$225,000 from two professors and another student.

  The company went through several rounds of private funding before a 2000 public offering that saw its market capitalization soar to US$400 million just after its IPO. But then the tech bubble burst and its value sank as low as US$18.5 million the following year when shares sank to an all-time low of US$0.52.

  "I was kind of depressed," Zhang said.

  "But I always compare it with 1997 and 1998 when the company was only a sketch. At that time I couldn't pay the credit card bills, and I was trying to persuade people to invest," he said.

  Hurst Lin (林欣禾), Sina's US-born chief operating officer who owns 517,000 shares according to a recent US filing, said his lifestyle had not changed at all.

  "I think I have a much more mature attitude about success these days," he said, leaning back on a padded chair at Sina's Beijing headquarters.

  "I learned my lesson in 2001. I thought I was doing really great, but then you can be a laughing stock," said the Brooklyn native who founded Sina's predecessor Sinanet.com.
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