Imagine wanting to be the No.10 search engine in China, or at least something along those lines. Over the next couple of years, IAC/InterActiveCorp (NASDAQ: IACI) will spend $100 million [subscription required] to get more of the market in the world's most populated country.
The Wall Street Journal reports that though plans for the new venture aren't yet decided, Barry Diller said that "We've certainly got enough capital to do damage." IAC's new investment will be somewhat of a gamble.
The gamble part may be putting it lightly. Mr. Diller, the IACI CEO, will be up against established companies in the online travel, ticketing, and search business. Some of these companies are Chinese, but in the critical search market, Google (NASDAQ: GOOG) and Yahoo! (NASDAQ: YHOO) are throwing dollars and troops into battle against market leader Baidu.com (NASDAQ: BIDU).
For a large US online company to say it is moving into China is probably necessary to make shareholders think the firm is not overlooking one of the great expansion opportunities. For IACI, however, it is a little late and the dollar investment is a little light.
Douglas A. McIntyre is an editor at 247wallst.com.
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Reader Comments (Page 1 of 1)
11-24-2007 @ 7:05AM
Roy Graff said...
I don't think that this move is coming late. Compared to US or Europe, China's online economy is still in its infancy and the number of online users could double in 2-3 years only. Let's say that in 5 years' time there will be 400 million internet users in China. In 5 years' time, China will be deep into WTO and will have no choice but to let go of many regulations currently in place. If IAC play their cards right with marketing, branding and have the right local partners, they can win a good chunk of the market for search and other online services.
http://www.chinacontact.org