AOL gets interactive with China

 

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Posted on 12 Jun 2001 at 12:28

The spread of Internet-based services into China was strengthened yesterday by a deal between AOL and a major Chinese PC builder.

The joint venture between AOL and Legend Holdings will develop interactive consumer services for the Chinese market.

Capital of $200m is backing the new venture, with Legend holding 51 per cent of the equity and AOL 49 per cent. Basically, the deal brings American know-how and marketing skills for online services to a government-approved major player in the internal Chinese market.

AOL will be delighted with the pact, getting a foothold within the state-controlled arena. China, of course, has long been viewed in the west as a huge, under-developed market.

Gerald M. Levin, CEO of AOL Time Warner, said: "Our announcement today in China is a major step toward fulfilling the promise of the Internet around the world. Supporting China in achieving its aspirations to provide its people with the benefits of the online medium is an important part of realizing that promise."

The Chinese also welcomed the deal: "I am very pleased to see Legend joining forces with AOL, the world's leading interactive services provider, to promote the development of Internet applications in China," said Liu Chuanzhi, Chairman of Legend. "I believe this cooperation is a strategic move which will have a profound impact on the China Internet industry."

Since 1999, the Hong Kong Stock Exchange-listed Legend Holdings has been providing "one-touch-to-the-net" online services to Chinese home users, via China Telecom. As of May 2001, it officially has 1.7 million interactive services users and 2.9 million registered e-mail users.

Author: Alun Williams