Two Big Portals in China Offer Services to Enterprises

Two Big Portals in China Offer Services to Enterprises
  
Slower advertising revenue and intense competition have pushed two of China's biggest Internet portals to launch enterprise portal services. The market has huge potential, but the vendors face challenges.
 
  
 
  

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Event
On 25 February 2002, Sohu.com and Sina.com, two leading Internet portals in China, announced plans to set up new dot-net companies to provide enterprise portal services in Beijing. Sina.com has set up Sina.net and Sohu.com has set up Sohu.net to provide network application technology and network marketing services — particularly enterprise portals — in China. The two companies are listed on the U.S. Nasdaq exchange and are competitors. They two companies have sued each other for alleged copyright infringements and plagiarism.
 

  
First Take
The decision by Sina.com and Sohu.com to offer enterprise portal services reacts in part to a shrinking advertising market. The portal operators aim to lift revenue and expand their business, and they have found a huge potential market. Enterprise portals give employees, customers and suppliers the information and services they need — inside and outside the business — in one location. Individual enterprises trying to establish their own portals face significant hurdles, particularly cost and a lack of expertise. China has more than 10 million small and midsize businesses and 15,000 large enterprises. Gartner believes that by 2004, at least half will use enterprise Web services if only to have an Internet presence (0.7 probability).

All portal operators in China face intense competition and a sluggish advertising market, but Sina.com and Sohu.com are among the few large enough and with enough expertise to establish other businesses. They have learned from the experience of U.S. portal operators such as Yahoo, which moved with some success into providing enterprise portal services. But experience in Web development doesn't guarantee success. To turn their experience into profit, Sina.com and Sohu.com will have to provide exceptional service, keep costs reasonable and meet user needs.

Their ability to provide enterprise portal services remains untested, but Gartner believes that enterprises with operations or affiliations in China should look to either of these two companies for portal services. The reasons include:

Their understanding of the Internet and business markets in China
Crucial contacts in the Chinese government
Their knowledge of government policy