China company stock news

China Internet froth builds as 360Buy dumps Alipay Perhaps I’m becoming a bit biased due to my belief that China is in the midst of an Internet bubble, but the latest word from online retailing giant 360Buy that it is cutting off Alibaba’s Alipay online payments service to me looks like the latest sign of a swollen China Internet sector under growing duress. As many will recall, 360Buy made headlines earlier this year when it raised a whopping $1.5 billion in new funding, a record for a private Chinese Internet company and just one of a large number of fundings of $100 million or more as both domestic and foreign investors piled onto the China Internet bandwagon. (previous post) One of the 360Buy investors, Russia’s Digital Sky Media, justified the massive investment by saying the company could be worth a staggering $10 billion — about triple the value of most of China’s biggest Internet firms excluding titans Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700). So I find it a little surprising that 360Buy CEO Liu Qiangdong is citing Alipay’s annual costs of about 5-6 million yuan, or less than $1 million, as the reason behind is company’s decision to cut off the service. (Chinese article) I’m certainly not in favor of needlessly wasting money, but for a company that just raised $1.5 billion to say an annual expense of $1 million is too high, especially in a high-growth area like e-payments, sounds to me like 360Buy is coming under increasing pressure to slash costs as its new impatient investors push it to become profitable — something that may not happen soon due to fierce competition in China’s e-commerce market. This latest move by 360Buy, combined with recent massive layoffs by Gaopeng, the group buying joint venture between Groupon and Tencent, (previous post) are just the latest signs of China’s growing Internet bubble, which could start to burst in dramatic fashion in the next 6 months.

Bottom line: 360Buy’s termination of its agreement to offer Alipay e-payment services is the latest sign of a building Internet bubble in China.

也许我是有点偏见，我认为中国互联网正出现泡沫。不过从京东商城近日宣布停用支付宝来看，似乎确实印证中国互联网产业面临更大压力。许多人应该都还记得，京东商城今年早些时候获得海外15亿美元融资，京东商城投资方之一–俄罗斯投资公司DST当时大谈此宗投资的合理性，称京东商城价值高达100亿美元。因此现在京东CEO刘强东以“费率高”为由，宣布停止与支付宝合作，让我有点意外，毕竟京东每年付给支付宝的费用也就是500-600万元人民币，还不足100万美元。我当然不是主张不必要的浪费，但作为刚融资15亿美元的京东商城，说每年100万美元的电子支付费用太高，让人感觉似乎京东商城在降低成本方面压力加大，因为投资方要求其实现盈利，而这在眼下中国竞争激烈的电子商务市场来说很难。京东商城此举，加之高朋网裁员，都是中国互联网呈现泡沫的迹象，也许未来六个月中我们会看到泡沫开始戏剧性破灭。

一句话：京东商城停用支付宝，是中国互联网产业出现泡沫的最新迹象。

Related postings 相关文章:

◙ Gaopeng, Kaixin Spotlight China Internet Turmoil 高朋网、开心网凸显中国互联网混乱现状

◙ Gaopeng Lay-Offs Auger Ad Spending Downturn 1高朋裁员预示网络广告支出或大幅下降

◙ 360Buy — More Details But Still Pricey 京东商城值多少？

Cloudary's offers entre to online content distribution Shanda Interactive (Nasdaq: SNDA) Chairman Chen Tianqiao is either very persistent or very stupid, as he returns to market with an IPO for his online literature unit, Shanda Cloudary, just months after he shelved the offering due to poor market sentiment, even as current sentiment remains poor. I’ve heard the guy is quite intelligent, even if most of his business endeavors don’t yield very impressive results, so I’m willing to give this new offering a look. (English article) Based on the numbers, the story actually looks quite interesting. Cloudary’s two biggest income sources, revenue from online users and from its online wireless service, both rose by triple digit percentages in the first half of the year, with the latter up more than 200 percent to a relatively modest 73.7 million yuan, or about $12 million. The company posted a net loss for the first half of the year, but that loss narrowed to about 14 million yuan from 22 million yuan in 2010. With revenue of around $50 million in the first half of this year, Cloudary is clearly not a huge company yet and has lots of room to grow. I’ve previously yawned at this offering, calling it just another attempt by Chen to squeeze more money out of financial markets, but I have to admit the numbers do seem to tell an interesting story. What’s even more interesting for me, however, is the reality on the ground: walking around in Shanghai, it’s nearly impossible to go for more than a few minutes without seeing someone on the subway or waiting in line at a shop reading on their cellphone or tablet computer. Perhaps it’s news, or perhaps it’s literature or perhaps it’s both. But regardless, Cloudary does seem to be in a strong position to take advantage of this trend, which will undoubtedly grow stronger as mobile devices such as e-readers and smartphones become more common. That said, I’m going to tweak my previous prediction and say that despite a dismal debut by video sharing IPO Tudou (Nasdaq: TUDO) earlier this month (previous post), Cloudary could actually do well in its offering and bring back a little buzz to the sputtering China Internet.

Bottom line: Shanda’s Cloudary online literature unit could offer an intriguing play into the growing market for mobile content with its upcoming IPO.