For Immediate Release
Hong Kong, September 4, 2000---TOM.COM LIMITED ("TOM.COM" or "TOM") announced today the signing of an agreement with Freenet Information Technology Limited ("Freenet"). TOM.COM intends to acquire a 100% interest in a Freenet's wholly-owned subsidiary which has effective control over 163.net at a total consideration of USD48 million (approximately HKD374.40 million) of which USD45 million (approximately HKD351 million) will be satisfied by (i) the issuance of 61,686,000 Shares at HKD5.69 per Share (being the equivalent of HKD350,993,340); and (ii) the payment of HKD6,663 in cash in respect of the balance of the consideration; and the remaining consideration of USD3 million (approximately HKD23.40 million) will be by way of repayment of certain shareholders' loans.
An independent financial adviser will be appointed to advise the independent non-executive directors of TOM in respect of this agreement.
The partnership with 163.net is part of TOM's strategy to bring in best-in-class portal applications to complement its vertical "category killers". Being the largest free e-mail service provider in Mainland China, 163.net owns a registered user base of 5.5 million. This joint effort will make TOM.COM one of the top 10 most visited sites in Mainland China. TOM will embed 163.net's e-mail application in its portal as a co-branded service.
For TOM, this move is expected to boost user and pageview growth, add a critical base of 5.5 million users, and raise the visibility of the TOM brand in Mainland China. It also represents an important step in building a Unified Messaging Platform in the China market. For 163.net, the partnership jumpstarts its strategy to build proprietary content to retain users.
"The strategic alliance will greatly enhance TOM's portal offering. Now, our users will also enjoy a Chinese language e-mail service. The resulting increase in repeat usage of the site and time spent by each user will enhance TOM's attractiveness to advertisers, ultimately driving up revenues," said a TOM.COM spokesperson.
China Internet Network Information Center (CNNIC) estimates that Mainland China had 16.9 million Internet users in June 2000. Together, these users are estimated to have 65.1 million e-mail accounts, up from 35.6 million in January 2000. E-mail remains the most popular application for Internet users in China and a primary engine for growth of the Chinese Internet population. 72% of users in China cite e-mail as a reason for using the Internet, and 59% use it each time they log on according to CNNIC.
Notes to Editors
Founded in December 1999 and an associate of Hutchison Whampoa Limited, TOM.COM LIMITED is a joint venture formed by Hutchison Whampoa Limited, Cheung Kong (Holdings) Limited and other strategic investors. The Company was listed on the Growth Enterprise Market (GEM) of the Stock Exchange of Hong Kong in March 2000. Targeted at Chinese-speaking and global audiences to "Bring China to the World and the World to China", TOM.COM LIMITED is building a multi-lingual mega portal to offer the most comprehensive China-related infotainment content. Headquartered in Hong Kong, TOM.COM has established offices in Beijing and Shanghai.
TOM.COM can be found on the Web at WWW.TOM.COM.
Since its first launch in March 1998, 163.net is now the largest provider of free e-mail service in Mainland China, with a daily pageview of over 7 million. At present, the site has 5.5 million registered users, up from just 1 million in July 1999. In December 1999, 163.net also launched its B2C e-commerce site, 1hao.com, and in March 2000 added four content channels to its offering. 163.net has established a strong brand and according to the recent survey by CNNIC in June 2000, 163.net is perceived as the sixth most influential site in Mainland China, with an average rate of 25,000 new registered users per day.
Sing Wang, CEO of TOM.COM is also Chairman of 163.net and owns a fully-diluted stake of less than 15% in Freenet.
For press enquiries, please contact:-
Rachel Chan, TOM.COM LIMITED; Tel: 2121 7810; Fax: 2127 7576
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