Summit Notebook

Exclusive outtakes from industry leaders

Chinese online execs say no to M&A

November 6, 2008

The Reuters China summit in Beijing had two internet executives speak about their business. Kevin Wang, CFO of software maker Kingsoft, and Charles Zhang, the chairman and chief executive officer of Sohu.com Inc. both discussed growth and weathering the financial storm. The companies they lead have some similarities and differences, but both are seen as being less exposed to market fluctuations because after all, a lot of their business is based on people going to their computer, sitting down, and logging onto the internet.

So how do they expect to grow their businesses? Not through acquisitions, both executives said, at least for the time being. They seemed to be happy to grow by beefing up their existing operations and partnerships. Or, as they in executive speak, they’re content to keep growth “organic.”

“We’re very cautious on acquisitions,” Zhang told Reuters at the summit. “We’re still looking, but there are not very many candidates. So I’d be very careful,” before seeking to purchase a competitor or peer, he said.

Ditto for Wang, who spoke of the 300 independent game studios in China sitting out there, with “very little chance” that they’d all survive as independent entities.

That doesn’t mean Kingsoft is in a buying mode, according to the CFO, who said that his company is not interested in taking any of them over at the moment.

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