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Peggy Sito

Hong Kong's Internet industry is in a process of consolidation with more mergers and acquisitions in the pipeline, according to Lycos Asia's senior executive.

Edward Lau, director of business development for Lycos Asia (Hong Kong), said more small Internet companies would die out quietly in the coming months amid fierce competition in the industry.

On Tuesday, entertainment news and gossip Web site show8.com confirmed a planned merger with other companies. The move would result in staff cutbacks.

At the end of last month, E2-Capital (Holdings) and Netalone.com announced they would merge their electronic-business enabler units which help companies adapt the Internet to their operations.

Mr Lau said it was not unexpected that companies should merge in the fight for survival.

Some investment houses had predicted only 10 to 15 per cent of Internet companies would survive the process of consolidation.

Mr Lau said such harsh figures were not impossible.

But he added that investors remained cautiously optimistic about the market, and that sizeable and solid companies which had a niche would survive.

Lycos Asia, a 50:50 joint venture between Lycos Inc and Singapore Telecommunications, was formed in September last year to jointly deliver localised versions of Lycos.com and other services to Asian markets.

Lycos Inc is listed on Nasdaq and has a market capitalisation of more than US$7 billion. It is a leading Web media company and the owner of Lycos Network, one of the most-visited hubs on the Internet, reaching nearly one out of every two US Web users, according to the company.

Mr Lau was speaking after the official launch of the company's financial Web site with content provider and portal operator CN-Markets-E-finet.com.

The Web site has various features such as Hong Kong stock quotations, performance charts, and a top 10 winners/losers/turnover/volume market roundup.

CN-Markets managing director Peter Yu said a process of consolidation was expected in the short term.

In future, he believed more partnerships would be seen in the industry into order to upgrade the quality of Web sites.

Lycos Asia's Web sites at present operate in Singapore, Malaysia, Greater China, India, and the Philippines.

Mr Lau said the company would launch more localised sites. A new site targeting women would be launched in about two weeks.



Partnerships bring quality as industry consolidates, says Lycos Asia