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A unit of U.S. Internet giant Yahoo Inc. has said it would pay up to US$120 million in cash to buy 3721 Network Software Co., a company that provides the technology for the Chinese language search engine 3721.com.
Under the agreement, 3721 Network will become a wholly owned subsidiary of Yahoo! Holdings (Hong Kong). The transaction is slated to be completed in the first quarter of next year, Yahoo said, noting there are currently no plans to change the management structure of the company.
3721 Network is incorporated in Hong Kong and has a technology alliance with Beijing 3721 Technology, which operates the search engine 3721.com.
3721 Network has developed a range of leading and proprietary technologies that help Chinese language users move around the Internet.
Instead of typing in URLs and domain names in English to find Web pages, the technology allows users to input Chinese characters.
China has become the world's second-largest Internet market in terms of users, with nearly 70 million people jumping online, according to official statistics.
Beijing-based consultant CCID Consulting forecasts China will have 100 million broadband Internet users by 2007.
"The online search market in China is growing rapidly and will be worth billions of dollars over the next few years," Cui Xiaobo, senior Internet analyst with Beijing-based consultants MFC Insight said.
"3721 is the most utilized Chinese language Internet directory in China. So it fits in with Yahoo's global strategy of beefing up its search engine business," he said.
But competition is increasing, with a range of companies including leading Internet portal Sohu.com, and search engines Baidu.com and Google all trying to grab a share of the market.
Yahoo said that as a result of the deal it will provide Beijing 3721 with a broad range of Yahoo technology, products and services to help small and medium-sized businesses in Asia reach more customers.
3721 NSC's technology portfolio includes the ability to enable keyword searches through the Internet Explorer browser address bar in addition to search tool bars.
It also enables non-English language users to enter search terms in local languages.
(Xinhua News Agency November 24, 2003)
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