Internet network CMGI (Nasdaq: CMGI) announced today that it is forming a joint venture with Hong Kong-based Pacific Century Cyber Works (PCCW) to create and operate a network of Internet businesses in the Asia-Pacific region.
The Andover, Massachusetts-based network of 60 Internet-related companies said that the new venture will be called CMGI Asia and be based in Hong Kong. The new venture will start working with four CMGI majority-owned companies and will take a 60 percent stake in each venture, while the CMGI property will take the remaining 40 percent stake.
Search engine and portal AltaVista, online marketer Engage Technologies (Nasdaq: ENGA), online entertainment company iCast, and Internet payment service 1ClickCharge will be the first in the CMGI network to expand to Asia, the company said.
“Asia is the hottest emerging market for the growing Internet economy, and our partnership with PCCW, furthered by the creation of CMGI Asia, places CMGI and its operating companies in an unrivaled position to take advantage of the Asian market opportunity,” said CMGI CEO David Wetherell.
Testing the Relationship
Last September, CMGI and PCCW conducted a $350 million (US$) equity swap. The companies discussed future cooperation in Asia at the time, making today’s announcement no surprise.
PCCW is one of the largest Internet companies in Asia outside of Japan. It has invested in more than 25 Asian and U.S. Internet companies and said its initial $58 million stake is now valued at $1.3 billion.
The company’s primary goal in the near future is to establish broadband services in Asia through its satellite network that serves more than 130 million cable-connected households throughout the region. PCCW is familiar with the business, having sold its share of STAR TV to Australian media giant News Corp. in 1993 for nearly $1 billion.
New Year Spirits Fund. In October, @Ventures announced the formation of a $1 billion business-to-business (B2B) fund.
CMGI holds a majority interest in AltaVista, the crown jewel of its network, and a number of other companies that are involved in online marketing and advertising, navigation and content. Its @Ventures affiliate has investment stakes in Lycos, MotherNature.com, AuctionWatch, RagingBull, Furniture.com and dozens more companies.
Last month, the company reported first quarter revenue of $123 million and a net loss of $6.8 million.