CMGI, Pacific Century unit in stock swap deal

CMGI, Pacific Century unit in stock swap deal

US Net investment company CMGI and a unit of Hong Kong-based Pacific Century Group (PCG) have agreed to a stock swap deal, the two firms announced last week. The pair are additionally holding talks about a possible Asian Net joint venture, CMGI said.

CMGI will issue $US350 million worth of its common stock to Pacific Century CyberWorks in return for $US350 million of the Hong Kong unit's shares, according to a statement issued by the US company last week.

The two companies are also investigating pooling their Net business resources to set up a joint venture that will develop Internet technologies in Asia. Such a venture would also co-invest in Net companies in both Asia and the US, CMGI said in the statement.

Pacific Century CyberWorks is Pacific Century Group's recently created flagship operation for technology investments. Last month, the unit acquired Pacific Convergence, a Net broadband services joint venture between Pacific Century Group and Intel last year. Intel also has a 13.05 per cent stake in Pacific Century CyberWorks, following on from a $US50 million investment in the unit last month. Intel is set to supply the necessary hardware in terms of set-top boxes and servers based on its own chip architecture to support Pacific Century CyberWorks' broadband ambitions.

Pacific Century CyberWorks has said it hopes to lead the broadband Net services market in Asia via a satellite network with the capacity to reach 110 million households in the region. However, the specifics of how exactly Pacific Century CyberWorks will achieve such a goal presently remain unclear.

The Hong Kong unit is also the prime mover behind the $HK13 billion ($US1.7 billion) planned Cyberport multimedia development complex, a project designed to turn Hong Kong into an IT hub for Asia. Again, precise details on the project are still to come, with some critics lambasting the Cyberport as little more than a thinly disguised property development scheme rather than the IT way forward for Hong Kong.

CMGI already owns sizeable stakes in a number of Internet-based companies, including an 18 per cent stake in Web portal company Lycos. In June of this year, Compaq announced that it was selling the majority stake of its AltaVista Net portal to CMGI, a deal that makes Compaq the largest outside CMGI shareholder.http://www.cmgi.com

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