Consolidation of the mainland's Internet industry will probably see larger firms acquiring smaller ones, rather than mergers between the top players, according to Sina.com's chief operating officer.
Daniel Mao's comments yesterday were in response to an Internet analyst's suggestion that the top three mainland players - Sina.com, Sohu.com and Netease.com - would enjoy more efficiency gains by merging. These top mainland portals listed on Nasdaq this year.
Mr Mao said there would be more synergies for larger players to acquire smaller ones than there would be in the case of a merger between the bigger firms. He cited a consolidation trend in the United States that has seen Internet portal giants such as Yahoo!, Excite@Home and Lycos remain independent amid continuing industry consolidation.
While Sina.com was in talks to acquire interests in a number of companies, Mr Mao said it was not in a hurry to merge as the process tended to have substantial integration costs.
He pointed out that it had taken between nine months to a year to integrate US-based Sinanet.com and Beijing-based Stone Rich Sight Information Technology - an amalgamation which formed Sina.com in March last year.
He had heard nothing about merger discussions among the three portals, Sina.com, Sohu.com and Netease.com, he said, but did not rule out possible involvements. The other companies were in acquisition talks of their own, he said.
'I would say never say 'never',' he said of merger possibilities. 'Anything is possible after AOL [America Online] bought Time Warner and Pacific Century CyberWorks bought HKT [Cable & Wireless HKT].'
