Internet

AOL Returning To China?

Time Warner Inc.'s America Online unit said on February 27 that it is in talks to re-enter the China market, despite pulling out of its high-profile $200 million jv here only months earlier.

"We're in some talks for something in China," Chief Executive Officer Jonathan Miller said. "It's a different business model."

Miller was not specific about the nature of the new model, saying only that AOL would invest far less than it did in its previous China joint venture with the PC maker Legend Group Ltd, which announced at the beginning of January that it had bought a 49% stake held by Time Warner, formerly AOL Time Warner Inc, in their Internet joint venture, effectively ending the partnership. Miller did note that he hoped that a new deal to be reached within a year.

Potential candidates for a new deal could include China's mobile phone giants of China Mobile (Hong Kong) Ltd and China Unicom Ltd; and its top two fixed line carriers, China Telecom and China Netcom, which have both spent millions of dollars over the last two years to build out their high-speed Internet networks. Other partners could include China-based online media firms like Sina.com, Sohu.com and NetEase.com.

Analysts believe that, if AOL is indeed to partner with one of these firms, the new business relationship could be geared towards improving access to their existing services from China, rather than a new China venture.

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