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After three years of strong growth in China's Internet market, some fundamental business principles are finally becoming clear there: Longterm success must be measured by profitability, not hype. Many dot-com companies simply cannot continue losing money; the few that are blessed with foreign venture capital face serious concerns about their ability to deliver on investment; and initial public offerings (IPOs) have been mediocre at best. China's Internet industry needs to figure out what can be done to turn a seemingly sound concept into a viable business.
Early this year, China's State Economic and Trade Commission (SETC), in coordination with the Ministry of Information Industry (MII), launched a national e-commerce campaign to get i million enterprises online. The campaign, which was very much driven by a political agenda and not market conditions, has yet to report any real progress. Nonetheless, many domestic and overseas companies announced new plans or services to...