Global China Technology Group takes 55pc stake in online news provider

Global China Technology Group and Xinhua News Agency, bucking the trend of consolidation and shrinking investment in the dotcom sector, have launched an economic and financial news Web site.

Global China, the publicly listed investment vehicle of tobacco tycoon Charles Ho Tsu-kwok, yesterday unveiled an agreement with the China Economic Information Service to co-develop the new service, to be called Xinhuaonline.

Global China will hold a 55 per cent stake in the 100 million yuan (about HK$93.7 million) joint venture, while China Economic Information Service - a wholly owned subsidiary of Xinhua, a state-controlled news media outlet - will own the remainder.

Global China has been building up its presence in the media sector in recent weeks, having agreed to buy a controlling stake in publisher Sing Tao Holdings earlier this month for HK$355 million.

The company's investment in Xinhuaonline comes at a time of a slowdown in the mainland new-media sector, as advertising revenues have not caught up with the huge capital outlays needed to build a burgeoning content company.

Recently, there has been talk of consolidation among China's Web companies, with intense competition and duplicated business models making the road tough for start-ups. Mainland Web portal market leader NetEase has said it is looking for a buyer.

Global China said it would focus on building Xinhuaonline's revenues through subscription fees, rather than online advertisements.