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

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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.

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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.

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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.

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