China.com, which reported phenomenal results in the first quarter, dropped its own bomb. "In the next few years, China.com will invest about $300 million in China's online game industry with a goal to become the leading online game company in the world within the next five years," said Peter Yip, Co-founder and CEO of China.com.

The online game market is in its harvest season. Following the listing of Shanda and The9, merger and acquisition, and listing frenzy in the online game industry have boosted the confidence and imagination of online game companies. According to reports, 9You, the online game company famous for its musical leisure game Audition, was approved by the Osaka Stock Exchange for listing in Japan on July 12 and raised $160 million through the IPO.

In addition, according to relevant sources, Perfect World Co. Ltd., the Beijing-based online game company established in 2004, is in its silent listing period and is expected to list in the United States soon.

But the online game path is not for everybody. Sohu.com, which became well- known as a portal, is reluctantly trying online games after its business dwindled. But the market is not buying it. Since May 9, the response to the public testing of its online game Tian Long Ba Bu, which Sohu had spent three years and 100 million yuan developing, has been mediocre.

Automobile consumption extends

Among auto consumption industrial chains, how many "gold mines" are there that can attract funding similar to the $25 million raised by a financing group led by Goldman Sachs in August 2006 for Chinacars.com?

The used-car website sector is one sector reaping the benefits. Some experts have estimated that China's used-car transaction volume will exceed 4 million cars by 2010, or more than 140 billion yuan in transaction value. The market derived from used-car sales, such as used-car loans, after sales services and advertising, is enormous. In March 2006, Dragon Groove and DT Capital Partner jointly invested $5.4 million in used-car website 51auto.com. Bitauto.com also obtained funding of 20 million yuan.

The auto consumption culture is driving the entry of this investment capital. In early June, United Automobile Club (UAA) announced it had completed its second round of fundraising totalling $13 million. Investors included KPCB China and Cross Country Automobile Services, an integrated U.S. auto service provider. "This is our year of expansion," said UAA President Lu Zhengyao. "UAA's focus for the next two years is to substantially grow our membership, and establish our member service networks."

Auto insurance broker Cars.com.cn, founded in 2005, also announced a new round of venture capital investment of $25 million. The company, which obtained a first round of investment of $2 million from Walton International Investment Group and China Merchants & Fortune Assets Management Ltd. in 2005, and a second round of $13 million in September 2006, finally made a profit in the first quarter of this year. It plans to list in the United States by the end of next year.

"The key agenda of UAA is resource integration which goes beyond the automobile domain," said Lu. "Ctrip.com and China Merchants Bank are UAA's business partners." This is also the core of China's automobile service organizations, such as auto clubs, used-car websites and insurance brokers. For them, questions, such as how to effectively capture member spending for the long term, how good are the service level and quality of the integrated resources, and how to establish competition standards are not easy to resolve and cannot be rushed.

(Xinhua Finance)