Hongkong.com portal plans to charge for services

Hong Kong Internet portal Hongkong.com Corp. this year plans to launch paid services such as enhanced e-mail and private corporate portal services.

The company, a subsidiary of Hong Kong-based Chinadotcom Corp., is striving to achieve an operating profit and is following the market into the next phase of the Internet – paid services, Hongkong.com CEO Rudy Chan said in an interview Monday.

The move may be repeated by other portals owned by Chinadotcom, which include Taiwan.com Corp. as well as cww.com for Mainland China, Chan said.

“The three portals are at different stages of development. When the market is ready to pay for some services, I’m sure our sister sites would also look to get their hands on that as well,” Chan said.

Web advertising, even bolstered by Web channel and event sponsorships, has not proven rich enough to close an operating loss that now stands at between HK$2 million (US$256,400) and HK$3 million per month, Chan said. Hongkong.com will follow other companies operating here that have been forced in the same direction, he said. Chan cited recent moves at Yahoo.com as well as local Chinese-language content sites such as Mingpao.com and Atnext.com, which charge fees for some information. The recent U.S. court decision against online music-sharing company Napster Inc. is further evidence the mood has shifted, he added.

“A lot of people realize the Internet can’t be free forever,” Chan said.

Hongkong.com is considering extending its basic e-mail service by offering fee-based features such as multiple accounts, additional online storage and unified messaging. It is already adding extensions to e-mail that are geared toward small and medium-sized businesses.

Another likely avenue for paid services may be SMS (Short Message Service), which offers a way to bring information to users’ GSM (Global System for Mobile Communications) cellphones without the need for the long dial-up times associated with WAP (Wireless Application Protocol), Chan said, referring to the fact that most WAP implementations today use circuit-switched data channels to transmit information.

Chan holds out little hope for WAP with currently available mobile-phone networks.

“The current WAP is more of a showcase of what you might be able to do in the future,” Chan said.

Chan is confident Hongkong.com can reap enough customers for fee services to give it an operating profit.

“Given we have 1.4 million current subscribers, it doesn’t take a lot to cover that loss,” Chan said.

The company made a profit in 2000 only with the help of interest on the proceeds of its initial public offering, Chan acknowledged.

Portals large and small are up against a tough online advertising market and most will either begin charging for some services or facing consolidation, said Joe Sweeney], an analyst at Gartner Group Inc., in Hong Kong.

“If they don’t do something about it, they won’t be in business next year,” Sweeney said. Next Media, the operator of Atnext.com, took the plunge here in Hong Kong about six months ago, he added. The jury is still out – and charging for services can cost sites a lot of visitors – but the move has to be made somehow, he said.

According to Gartner research, “Advertising won’t pay for Web content,” Sweeney said.

Hongkong.com, in Hong Kong, can be reached at http://www.corp.hongkong.com.