Hutchison Whampoa Ltd’s self-styled mega-portal Tom.com has invested US$4.2 million to acquire an initial 15 percent share in music e-commerce play OneAsia.com.
In addition to the initial investment, the two companies have agreed options which will allow Tom.com to increase its stake to up to 30 percent prior to and 50 percent at the time of an initial public offering of OneAsia.com’s shares.
“Alignment with Tom.com’s powerful brand, broad audience and world class Chinese language internet portal interface will significantly enhance our market share as an ‘e-tailer’ of Cantonese and Mandarin language music and video products,” said John R. Henderson, chairman and CEO of OneAsia.com.
“Tom.com’s sponsorship will also allow us to significantly accelerate our development plans for other Asian language markets, in particular India, which is the next strategic market we are looking at,” added Henderson.
“OneAsia.com is an excellent partner to Tom.com because of the depth and experience of its management team and the quality of the internet offering which they have created for Cantonese and Mandarin language music and video sales,” said Carl Chang, CEO of Tom.com Ltd.
“Their supply and distribution networks are well advanced and we believe their alignment with Tom.com will assume a leading market position in this important and growing “B to C” e-commerce sector,” commented Chang.
The move is seen by many as a strategic investment, allowing Tom.com to have access to OneAsia.com’s services for its portal. However, as one analyst pointed out, in the case of Tom.com, it wasn’t really clear what type of Internet business model that Hutchison was developing.
