prepared by group h: adam zhou; antony yu charlie zhao, gavin liu, julia tien, johnson zhou legend...

Prepared by Group H:

Adam Zhou; Antony Yu

Charlie Zhao, Gavin Liu, Julia Tien, Johnson Zhou

Legend Changed the Legend Changed the WorldWorld

Sources: iResearch, JP Morgan, Goldman report and companies data

Contents

Industry Overview and Competition Analysis

Acquisition

The Puzzles in Acquisition

What is Next

The Impacts on China Internet Industry


30. 523%

52. 440%

6. 45%

42. 832%

Leased Li nes Di al - up I SDN Broad Band

Users: Types of Accessing MethodsUsers: Types of Accessing Methods

(Million)(Million)

China Internet Industry Overview

Internet Market in China Internet Market in China (By Dec.31,2004)(By Dec.31,2004)

ItemNumber (Million)

Annual Growth Rate

Internet User 94.00 34.70%

Computer Host 41.60 18.20%

Domain Name 4.32 27.10%

www. Website 6.69 12.30%

Source: CNNIC

Main players: Sina, Sohu, Netease, Tom, Yahoo CN, Tencent QQ, 21CN, china.com


Shanda Interactive Entertainment Limited

Sales Revenue & Net Income

633.41

139.288

272.85344.523

4.8

1367.19

3.23

603.043

0

200

400

600

800

1000

1200

1400

2001 2002 2003 2004 Year

Mill

ion

s R

MB

Total revenues

Net income

Establishment: Nov. 1999

The largest operator of online games

in China: LEGEND

Stock Exchange: NASDAQIPO Date: May 13,2004Ticker Symbol: SNDA

Total (June 2,2004): 15,360,121 ADSs


Shanda’s Competition Analysis

Shanda 2004 Revenue Structure

76.79%

16.56%

6.65%

MMORPGs Casual Other revenues

Main business: online gaming

Annual revenue: 1,276 million

(40% of total sale amount in this field)

Main competitors: Netease

the 9

Kingsoft

Wemade


The Revenue Structure of NTES

Online Adv. GamingOthers

Percentage

The Revenue Structure of NTESThe Revenue Structure of NTES

Online Adv. GamingOthers

Percentage

Netease

Milestones:

Jun. 1997 Establishment

Chinese Searching Engine

Jun.2000 IPO (NASDAQ)

3.184 million ADSs

Dec.2001 First MMORPG

Joyful Journey West Online

Feb.2005 Fiscal report 2004

2nd Online Game operator


67.42%

30.33%

1.28% 0.97%

Online game service

Online game operation suppply, w ebsite solution, & advertisement

Short message service

Others

The 9

Milestones:

Aug 1999 www.gamenow.com

Online virtual community

May 2000 www.the9.com

Entertainment website

Sep 2003 MU beta testing

(30K concurrent users on 1st day)

Online game operation

Dec 2004 IPO (NASDAQ)

6.075 million ADSs

The Revenue Structure of NCTY


Sina Corporation

Online media company and value-added information service provider

SINA CorporationSINA Corporation

SINA mobile

SINA.com SINA.netSINA

online

SINA

E-commerce

Online news

Online ADs

SMS

IRP

WAP

KJAVA

E-mail

UC

Online game

Searching

Enterprise services

Online shopping

Travel service


Sina

2002-2004 Quartely Report56,899

52,505

49,195

41,388

38,270

31,914

25,987

18,114

12,870

10,3468,563

7,115

38,966

35,650 34,898

28,86227,608

22,352

17,881

12,007

8,409

6,2655,014

3,697

17,433

14,503

18,018

16,042

9,269

11,657

7,121

3,3761,475

(559)(1,894)

(3,971)

(10,000)

0

10,000

20,000

30,000

40,000

50,000

60,000

04Q4 04Q3 04Q2 04Q1 03Q4 03Q3 03Q2 03Q1 02Q4 02Q3 02Q2 02Q1

Thousands $

Net revenues: Gross profit Net income


Yahoo CN

Yahoo: Global internet media, 24 websites in 12 languages

Yahoo CN: Establishment--Sep. 1999: www.yahoo.com.cn 20th

Main businesses: Searching Engine

Communication channel (email, messenger)

Information (news, finance, weather)

Community (chat, clubs, photos)


Tom.com

Mid 2000: Launched flagship website, www.tom.com

Q2 2003: Ranked No. 4 Internet portal in China

Q4 2003: Launched online game - Karma Online

Portal ranked No.16 in the world (In terms of traffic)

Tom.com

Online advertising

Others (Skype, E-commerce, CRM)

Wireless Internet (SMS, MMS, Wap, Java)

Online games (Karma Online)


SOHU.COM Inc

Main Businesses:

www.sohu.com: Mass portal and leading online media destination

www.sogou.com: Interactive search engine;

www.chinaren.com: The #1 online alumni club

www.17173.com: The #1 games information portal

www.focus.cn: Top real estate website

www.goodfeel.com.cn: Wireless value-added services provider.

Aug.1996 ITC Electronic Tech.

Feb.1998 CHINESE searching engine—SOHU

Mar.1999 Matrix of web properties


Contents


Acquisition


What is Next



Drivers for Diversification

Government Regulation and Society Pressure On Online Game

Too Much Cash : $440 Millions by the end of 2004

Fierce competition would lower the

growth rate of gaming

4.17Quick ratio

0.62 Cash & Cash equivalents/assets

2003Microsoft Ratio

0.85 0.66 Cash & Cash equivalents/assets

7.63 2.51 Quick Ratio

7.65 2.51 Current Ratio

64,289 1,224 Marketable Securities

377,551 72,395 Cash & Cash equivalents

20042003

4.17Quick ratio

0.62 Cash & Cash equivalents/assets

2003Microsoft Ratio

0.85 0.66 Cash & Cash equivalents/assets

7.63 2.51 Quick Ratio

7.65 2.51 Current Ratio

64,289 1,224 Marketable Securities

377,551 72,395 Cash & Cash equivalents

20042003


2001-2004 Business Structures of Shanda

Shanda Business Structure

4,126

344,424

612,470

1,049,799

8773

226,412

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2001

2002

2003

2004

MMORPGs

Casual

Others


Shanda is Changing

2004 Shanda Revenue Structures

87.79%78.88% 76.36%

69.90%76.79%

10.81%

15.87%15.44%

20.99%16.56%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Q1 Q2 Q3 Q4 2004

Others

Casual

MMORPGs

The causal game and other business are becoming more and more important.


The road of Shanda M&A

Internet is a industry run with the time.

KOREAN Actoz Soft (Korean famous network game developer and operator, owned the dividend of China from <LEGEND OF MIR II>,<A3>,<LEGEND OF MIR III>

INVESTMENT AS HOLDING COMPANY

Nov-04

CMFU (China leading entertainment literature portal site)ACQUISITIONOct-04

DIGIRED (China leading mobile game developer and operator)ACQUISITIONSep-04

GAME ABC (China leading Chess and Cards Game Operator)ACQUISITIONJul-04

Shanghai HOLDFAST (Holdfast Group is the biggest Multi-Player On Game Operation Platform in China)

INVESTMENTJul-04

USA ZONA (the world leader of the complete network solution for Massive Multi-Player Online Games. )

ACQUISITIONJan-04

TARGET COMPANYTYPETIME

ACQUISITION OR INVERSTMENT OF SHANDA IN 2004

KOREAN Actoz Soft (Korean famous network game developer and operator, owned the dividend of China from <LEGEND OF MIR II>,<A3>,<LEGEND OF MIR III>

INVESTMENT AS HOLDING COMPANY

Nov-04

CMFU (China leading entertainment literature portal site)ACQUISITIONOct-04

DIGIRED (China leading mobile game developer and operator)ACQUISITIONSep-04

GAME ABC (China leading Chess and Cards Game Operator)ACQUISITIONJul-04

Shanghai HOLDFAST (Holdfast Group is the biggest Multi-Player On Game Operation Platform in China)

INVESTMENTJul-04

USA ZONA (the world leader of the complete network solution for Massive Multi-Player Online Games. )

ACQUISITIONJan-04

TARGET COMPANYTYPETIME

ACQUISITION OR INVERSTMENT OF SHANDA IN 2004


The long –term strategy of Shanda

Digital Red IntermediatePC Platform-mobile

New Business TV ContentsIPTV

Dating, wireless, Music, BBS etcCommunity products

Literature website, Qidian, provides more gaming stories

Actoz enhancing game development capacity

Both licensed and in house developed;

Gaming developers

Network PC games (will acquire full stake in Haofang

board, Chess, cards games

Casual games

MMORPG

Gaming Production

Mobile

Internet Café

Home (from study rooms to living rooms)

Gaming Location

TV (via set-top box; partner with ALCATEL,INTEL,SVA)

Mobile Devices (Digital Red)

PC

Gaming Devices

Gaming and Other Entertainment

Digital Red IntermediatePC Platform-mobile

New Business TV ContentsIPTV

Dating, wireless, Music, BBS etcCommunity products

Literature website, Qidian, provides more gaming stories

Actoz enhancing game development capacity

Both licensed and in house developed;

Gaming developers

Network PC games (will acquire full stake in Haofang

board, Chess, cards games

Casual games

MMORPG

Gaming Production

Mobile

Internet Café

Home (from study rooms to living rooms)

Gaming Location

TV (via set-top box; partner with ALCATEL,INTEL,SVA)

Mobile Devices (Digital Red)

PC

Gaming Devices

Gaming and Other Entertainment

To be

Online Disney


Why SINA

Product structure of Sina and Shanda can be complementary Product structure of Sina and Shanda can be complementary

Sina has undisputable advantages in China ’s Internet industry Sina has undisputable advantages in China ’s Internet industry

Sina’s vertical channels are crucial to Shanda’s IPTV strategy. Sina’s vertical channels are crucial to Shanda’s IPTV strategy.

Sina’s Stock was undervalued.Sina’s Stock was undervalued.

The Shares of Sina’s are disperse enough.The Shares of Sina’s are disperse enough.


Business & Users Complementary

LowHighMajority Education

11001800Average Monthly Income(￥)

High1830Average Years

Synergy ShandaSinaCustomer Types

BadNABadBooking Room or Tickets

Below average NABelow

average Internet Auction


average Communicator


average Search

GoodNAGoodEmail

ExcellentBadExcellentWireless

ExcellentGood ExcellentInternet Adv.

Very goodVery goodBelow

average Causal Game

ExcellentExcellentAverageOnline Game

Combined ShandaSinaBusiness Type

LowHighMajority Education

11001800Average Monthly Income(￥)

High1830Average Years

Synergy ShandaSinaCustomer Types

BadNABadBooking Room or Tickets


average Internet Auction


average Communicator


average Search

GoodNAGoodEmail

ExcellentBadExcellentWireless

ExcellentGood ExcellentInternet Adv.

Very goodVery goodBelow

average Causal Game

ExcellentExcellentAverageOnline Game

Combined ShandaSinaBusiness Type


A Giant in Portal, Wireless and Gaming

MMORPG

Online Adv.Casual Game

ReservationAuction

Communicator

MailboxSearch

Wireless

IPTV(E)Multi-players

on Game Operation Platform

Sina Business

Shanda Business

NO. 1 Portal


Vertical Channels

The contents of these channels are crucial to Shanda IPTV


Fragment of Sina’s Shares

The fragment of shares makes Sina a real public company, which was controlled by professional managers rather than shareholders.

The fragment of shares makes Sina a real public company, which was controlled by professional managers rather than shareholders.

100.00%50,477,694Total

42.15%21,276,892Sub Total

2.11%1,064,725Morgan Stanley Investment Management Inc. (US)

2.27%1,143,623Chiang (Daniel)

2.27%1,145,029Evergreen Investment Management Company

2.97%1,500,000Legg Mason Capital Management, Inc.

3.29%1,659,300T. Rowe Price Associates, Inc

4.44%2,240,400Capital International, Inc

4.96%2,502,274Sun Stone Media Group, Ltd

5.63%2,840,036Alliance Capital Management L.P


8.39%4,235,000Capital Research & Management Company

Percentage Shares Top 10 Holders

100.00%50,477,694Total

42.15%21,276,892Sub Total

2.11%1,064,725Morgan Stanley Investment Management Inc. (US)

2.27%1,143,623Chiang (Daniel)

2.27%1,145,029Evergreen Investment Management Company

2.97%1,500,000Legg Mason Capital Management, Inc.

3.29%1,659,300T. Rowe Price Associates, Inc

4.44%2,240,400Capital International, Inc

4.96%2,502,274Sun Stone Media Group, Ltd



8.39%4,235,000Capital Research & Management Company

Percentage Shares Top 10 Holders


Sina’s Earning

Sina Earning Per Share

0.300.29

0.36

0.33

0.16

0.24

0.15

0.07

0.03

(0.01)

(0.04)

(0.09)

(0.15)

(0.10)

(0.05)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

04Q404Q304Q204Q103Q403Q303Q203Q102Q402Q302Q202Q1

$

Diluted net income (loss) per share


Low P/E Ratio of Sina

13.120.18.69 1.40 71.312/06(E)

14.619.9-3.31.2965.612/05(E)

14.219.2102.51.336612/04(F)

25.339NM0.6631.412/03(F)

-2,520.10NM83.8-0.11-4.912/02(F)

EV/EBITA

P/E RatioChanges %

Per Share Earning

Net Income

(Millions)Year

The Prediction of Sina

13.120.18.69 1.40 71.312/06(E)

14.619.9-3.31.2965.612/05(E)

14.219.2102.51.336612/04(F)

25.339NM0.6631.412/03(F)

-2,520.10NM83.8-0.11-4.912/02(F)

EV/EBITA

P/E RatioChanges %

Per Share Earning

Net Income

(Millions)Year

The Prediction of Sina

Till Q4.04, total value of Sina was about 11.3~15.1 billions, and therefore, the stock price would be $ 22.5~$30.1.

Feb. 8 SNA P/E ratio=15.5

The stock was undervalued in early Feb.

14.312.980.56BTOMOTOM

31.9140.071.60bNTESNetease

22.4425.61.29BSINASina

29.2530.012.13BSNDAShanda

32.6345.452.20BLAURLAUREAT

E 10

46.3928.943.45BMNSTMONSTE

R 9

14.1213.124.85BETE*TRADE8

83.375.5313.91BAPOLAPOLLO GP INC

7

25.6835.3114.47BAMZNAmazon6

95.7422.2115.38BIACIIAC/INTERACTIVE

5

74.9542.4628.15BEBAYeBay4

58.3133.646.19BYHOOYahoo3

135.55197.9554.12BGOOGGoogle2

26.5417.8982.09BTWXTIME

WARNER 1

P/E RatioPriceMarket value

CodeFirmsRank

14.312.980.56BTOMOTOM

31.9140.071.60bNTESNetease

22.4425.61.29BSINASina

29.2530.012.13BSNDAShanda

32.6345.452.20BLAURLAUREAT

E 10

46.3928.943.45BMNSTMONSTE

R 9

14.1213.124.85BETE*TRADE8

83.375.5313.91BAPOLAPOLLO GP INC

7

25.6835.3114.47BAMZNAmazon6

95.7422.2115.38BIACIIAC/INTERACTIVE

5

74.9542.4628.15BEBAYeBay4

58.3133.646.19BYHOOYahoo3

135.55197.9554.12BGOOGGoogle2

26.5417.8982.09BTWXTIME

WARNER 1

P/E RatioPriceMarket value

CodeFirmsRank


What Has happened?

Announce & NegotiationAcquisitionOrigin

Feb. 18, 2005Feb.7-17, 2005Oct.10 2004


Contents


Acquisition


What is Next



Clues of Collusion

Yahoo: white knight or the target of poison pill?Yahoo: white knight or the target of poison pill?

Timing of Poison PillTiming of Poison Pill

Stone’s Shares Stone’s Shares

Shanda: no enough cash for hostile takeover?Shanda: no enough cash for hostile takeover?

Institutional InvestorsInstitutional Investors


Topic one: Poison Pill

What is Poison Pill?

Any tactic by a company designed to avoid a hostile

takeover.

Designed to make the target company unattractive to the

potential buyer.

Sina’s Poison Pill

Each Right entitles the registered holder to

purchase from the Company one Ordinary Share at a

Purchase Price of $150 per Ordinary Share

Effectively dilutes the equity ownership of Shanda (the hostile party), making a

takeover much more difficult.


Poison Pill

Actually announced on Feb 22.

Poison Pill Puzzles!

Should have been prepared


Feb. 18, 2005Feb.7-17, 2005Oct.10 2004

TIME


Why No Poison Bill Earlier?

Defensive Plan A:

If Sina had prepared a defensive plan since last Oct. the triggering point would be 10%

103MLose of Shanda230M277MTotal acquisition cost

235M128MTotal value of shares5.03M13.62MAdditional shares should

be acquired

20.00%10.26%Percent of Sina's

outstanding shares after dilution

19.50%19.50%Aimed percent of Sina's

outstanding shares

$23.42/share$11.71/shareMarket value per share$23.42/share$11.71/shareAverage acquisition cost

per additional share

Without poison pill

Triggering poison pill

Without poison pill


Currrent Defensive Pan Defensive Plan A

103MLose of Shanda230M277MTotal acquisition cost

235M128MTotal value of shares5.03M13.62MAdditional shares should

be acquired

20.00%10.26%Percent of Sina's

outstanding shares after dilution

19.50%19.50%Aimed percent of Sina's

outstanding shares

$23.42/share$11.71/shareMarket value per share$23.42/share$11.71/shareAverage acquisition cost

per additional share

Without poison pill


Without poison pill


Currrent Defensive Pan Defensive Plan A


Poison pill

Actual announced on Feb 22.

Poison Pill Puzzles!

Should have been prepared


Feb. 18, 2005Feb.7-17, 2005Oct.10 2004

TIME

TARGETSina do not want to be taken by Yahoo

because of main business overlap and potential to lose its own Brand


The effect of current poison pill to Yahoo!

Cost of Yahoo

Expected market value per share over $50*

Aim of percent share needed 51%

Total share acquired 47.8M

Total acquisition cost $2.39B

Defensive Plan B:

* The price here is mostly decided by the market expectation when Yahoo announcing its merger plan. It is roughly estimated to be the same as the highest price of year 2004, because at this time Yahoo can only got share from institute shareholders by negotiating the price.


Betrayers in Sina?

1. Stone sold its shares to Shanda

Consequently losing money on its main business, Stone needed cash to invest in new project and keep its stock price.

Stone continued to increase its equity stake in China Cable, from equity interest of 5.54% at the beginning of the period to 13.77% at the end, through a jointly controlled entity. investment in China Cable increase

2. Management team was keeping exercise their options.

2004.10.29-12.8, the top management cashed out 1,541,800 shares for $47.49 millions, and price was ranged from $33-37.


Shanda: No Enough Cash for Hostile Takeover?

Cost of Hostile takeover

1134.01 806.41 Total acquisition cost ($MM)

45.36 25.20 Total share acquired (Millions)

50.10%50.10%Aim of percent share needed

2532Expected average price per share $

Poison Pill

Without Poison Pill

1134.01 806.41 Total acquisition cost ($MM)

45.36 25.20 Total share acquired (Millions)

50.10%50.10%Aim of percent share needed

2532Expected average price per share $

Poison Pill

Without Poison Pill

The Total free cash and cash equivalent for Shanda: was 444-92=$352 MM

Debt Ratio: 53.16%

Total asset for company: $517.4 MM

Shanda won’t have enough cash to takeover SINA if it can not be accepted by DOB.

Why did it take 19.5% if only want to be largest shareholder?


Institute Investors—Collusion???

Some institutes were very active in the event!

1.68%<=1.3%1.68%Shanda

<=1.93%<=1.39%1.85%SinaEssex investment Management Inc.

Shanda

<=1.93%<=1.39%1.93%Sina

Tiger technology

Shanda

2.17%<=1.39%2.17%Sina

Cotaue management LLC

0.80%0.80%3.13%Shanda

2.18%2.18%<=1.85%SinaMorgan Stanley Investment Management Inc. (US)

<0.41%1.42%<=0.41%Shanda

4.09%5.84%4.09%SinaAxa

<=0.41%1.66%<=0.41Shanda

9.10%8.39%9.10%SinaCapital Research & Management Company

3/04/20052/18/2005Shares on 12/31/2004Institute Investor

1.68%<=1.3%1.68%Shanda

<=1.93%<=1.39%1.85%SinaEssex investment Management Inc.

Shanda

<=1.93%<=1.39%1.93%Sina

Tiger technology

Shanda

2.17%<=1.39%2.17%Sina

Cotaue management LLC

0.80%0.80%3.13%Shanda

2.18%2.18%<=1.85%SinaMorgan Stanley Investment Management Inc. (US)

<0.41%1.42%<=0.41%Shanda

4.09%5.84%4.09%SinaAxa

<=0.41%1.66%<=0.41Shanda

9.10%8.39%9.10%SinaCapital Research & Management Company

3/04/20052/18/2005Shares on 12/31/2004Institute Investor Institute investors


Influence of Poison Pill Announcement to Stock Price

Price Graph

Volume


Institutional Investors: No Driver for Collusion but understanding

Institutional Investors had very few shares in Shanda but more in Sina.

Institutes Investors’ benefit is more sensitive to Sina than Shanda. Shanda can not be easy affected by institutional investors. But Sina is!

Institutional Investors had very few shares in Shanda but more in Sina.

Institutes Investors’ benefit is more sensitive to Sina than Shanda. Shanda can not be easy affected by institutional investors. But Sina is!

Investors thought Sina was undervalued at the beginning of Feb.

Shanda’s taking over would increase Sina’s market performance.

Shanda’s stock price would decline in short term ( They shorted )

Investors thought Sina was undervalued at the beginning of Feb.

Shanda’s taking over would increase Sina’s market performance.

Shanda’s stock price would decline in short term ( They shorted )


Contents


Acquisition


What is Next



Possible Scenarios

Sina’s DOB Approves Combination

• Financial Wise

• Integration by Shanda

• Potential Problems

Sina’s DOB Denies Combination


Financial Wise

Stock Swap

118Total Cash & Cash Equivalent

(92)Cost of Acquiring Actoz

(230)Cost of 19.5% Sina Shares

275Debt Convertible

440 Cash & Cash Equivalent

$MM

Shanda

118Total Cash & Cash Equivalent

(92)Cost of Acquiring Actoz

(230)Cost of 19.5% Sina Shares

275Debt Convertible

440 Cash & Cash Equivalent

$MM

Shanda

Amount for Rest 80% of Sina Shares:

$30 x 50 mm x 80% = $120 mm

Stock Swap Ratio: 0.95~1.05

Shanda share/Sina share

$28 201.40 Sina

$35 22$1.61 Shanda

Price P/E RatioEPS

Year 2006

$28 201.40 Sina

$35 22$1.61 Shanda

Price P/E RatioEPS

Year 2006

In a long run ration of Sina price to Shanda price is ranged from (0.83-0.91)


Integration

Business CultureSynergy

Integration

Pros:

• Sina has weak culture. Easy to build new culture in new entity after acquisition.

• Chen Tianqiao & Tang Jun

Cons:

• Shanda did not have experience with Media culture before.

• Benefit from Revenue instead of Cost

• Diversification

1. Game: Combine synergies of NCSina game with Shanda Game

2. Advertisement

3. Internet Auction

3. IPTV: Content+Ad

4. Mobile Services: Msg.+Game+Others


Problems

• Short-term Pressure for Shanda

• How to Deal With eBay

• Management Experience

ShandaOnline Game Operator under Pressure of the Society

Sina

Main Stream Media

Control

How to Coordinate Together??


Scenario 1

Be the DOB

Possibility: Medium

- Shanda persuades Sina’s institute investors to send it into the board.

- Key issue: Attractive blueprint for Sina’s business growth.

Scenario 2

Be the big shareholders

and cooperate with Sina

Possibility: Medium

- Equity participation. E.g. IPTV, Mobile Value-added Services Etc

Scenario 3

Sell Sina’s shares at higher price

Possibility: High

- Shanda have no enough cash for bidding war.

- It will benefit from holding/selling Sina’s shares at a higher price.

Scenarios if Sina’s DOB Denies Combination


Contents


Acquisition


What is Next



A Giant in Portal, Wireless & Gaming

A media giant on three platforms, namely PC, mobile device and IPTV, affecting three important sectors – portal, wireless and gaming.

Source: Relative companies' financial statements. Unit: $MM

37.51<20.66>125-124Wireless Value-added Income

-75.99>154154.2-Internet Game Income

55.719.13>70-65.4Internet Advertisement Income

35.653.3313973.666Net Profit

103109356.9156.9200Net Revenue

SohuNeteaseSina+ShandaShandaSina

Source: Relative companies' financial statements. Unit: $MM

37.51<20.66>125-124Wireless Value-added Income

-75.99>154154.2-Internet Game Income

55.719.13>70-65.4Internet Advertisement Income

35.653.3313973.666Net Profit

103109356.9156.9200Net Revenue

SohuNeteaseSina+ShandaShandaSina

2004 Business Comparison: Sina-Shanda vs. Netease & Sohu


Influences on Internet Businesses & Companies

It may trigger more large-scale merger & acquisition in local Internet Industry.

LowCtrip eLongNABadBooking Room or

Tickets

LoweBay, TaobaoNABelow average Internet Auction

LowQQ, MSNNABelow average Communicator

LowBaidu, Sohu,

Google, YahooNABelow average Search

LowYahoo, Sohu,

NeteaseNAGoodEmail

MediumTom, Lingtong,

Kongzhong, SohuBadExcellentWireless

HighSohu, Yahoo, Netease Tom

Good ExcellentInternet Adv.

HighQQ LiangzhongVery goodBelow average Causal Game

HighNetease, The 9ExcellentAverageOnline Game

ShandaSinaImpact

Influenced companies

PerformanceBusiness Type

LowCtrip eLongNABadBooking Room or

Tickets

LoweBay, TaobaoNABelow average Internet Auction

LowQQ, MSNNABelow average Communicator

LowBaidu, Sohu,

Google, YahooNABelow average Search

LowYahoo, Sohu,

NeteaseNAGoodEmail

MediumTom, Lingtong,

Kongzhong, SohuBadExcellentWireless

HighSohu, Yahoo, Netease Tom

Good ExcellentInternet Adv.

HighQQ LiangzhongVery goodBelow average Causal Game

HighNetease, The 9ExcellentAverageOnline Game

ShandaSinaImpact

Influenced companies

PerformanceBusiness Type


Summary

It’s likely that collusion or understanding exists in this case.It’s likely that collusion or understanding exists in this case.

There will be a real Internet giant in Portal, Wireless and Gaming to compete against those global leaders.There will be a real Internet giant in Portal, Wireless and Gaming to compete against those global leaders.

It may trigger more large-scale business combination in China Internet industry. It may trigger more large-scale business combination in China Internet industry.

Acquisition will become a long march when the event quiets down; Everything is possible before shareholders conference in June.

Acquisition will become a long march when the event quiets down; Everything is possible before shareholders conference in June.

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Legend Changed the Legend Changed the WorldWorld

prepared by group h: adam zhou; antony yu charlie zhao, gavin liu, julia tien, johnson zhou legend...

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