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TIME AsiaAsiaweekAsia Now TIME Asia story

FEBRUARY 7, 2000 VOL. 155 NO. 5

Dotcom Mania
As Asia's Internet start-ups race toward lucrative listings, investors have dollar signs in their eyes
By ERIC ELLIS Singapore

And now it's Asia's turn. The continent of economic miracles has watched, stunned from a distance, as the Internet-driven New Economy mushroomed in the West. Silicon Valley whipped up America's emerging market within: a roaring, just-wing-it, bandwagon-cum-bubble business culture that has looked a lot like, well, the freewheeling Asia of the past. For a while, it seemed as if the long-predicted Pacific Century might be stillborn--or stolen altogether.

Cover: Dotcom Mania
As Asia's Internet start-ups race toward lucrative listings, investors have dollar signs in their eyes
First, Create the Hot Start-up:'s founders think they can make their red-hot site 'sticky' and profitable
Then Pray for The Angel: After a midlife career change, investor Jim Mellon is looking for a few good ventures
Next, Call in The Venture Capitalist: AsiaTech takes high-stakes gambles on Internet firms
Cozy Up with The Incubator: A Hong Kong financier and his British partner hope to nurture the next big things
Now You Are Ready for The Listing: Hong Kong debut endures rough ride on the market
Or, You Can Just Sell Out: Eschewing an IPO, an Indian entrepreneur gives up his portal for a quick pot of cash

Beijing Tries to Build Barriers
Regulating the Internet

Viewpoint: New Eras All Too dot.common
What's pumping up Internet-company valuations? Hot air

Viewpoint: The Sound of Asia Booming
In this online exclusive, Bob Davis, president and CEO of Lycos, gives his take on the growth of Asia's Internet economy

No longer, and Silicon Valley beware. Asia is producing its own Net nerds bringing new businesses and technologies to the region and, along the way, getting rich beyond their wildest dreams. If all works out, young geeky pioneers in Japan, China, Korea, India, Singapore and Taiwan may re-invent Asia's future--just in time. "It's remarkable," says Sandra Morris, director of chip giant Intel's e-commerce unit. "The development line in Asia almost identically follows that of the U.S., only it's 2-3 years behind." And catching up with lightning speed. Internet analyst Greg Tarr in Singapore estimates that there will be 200 Net-related IPOs in Asia this year, half of them in Japan.

Russel Wong for TIME
Surfers log on in an Internet cafe in Singapore, one Asian dotcom hotspot.

It's no surprise Asia is embracing the New Economy model. Just check out what's been going on across the Pacific. New York's NASDAQ index, loaded with technology and Internet stocks, soared 85% in 1999, fueled by $70 billion in new floats--a figure equal to Malaysia's GDP. If the share price of Yahoo!, the Net search-engine company now valued at $82 billion, climbs this year as it did last, the company will be as big as the Australian economy. That's how the New Economy compares with the old, and until recently, Asia was about as racy as a 2.4K modem.

Though it may now seem that everyone is making huge piles of money, the big returns aren't automatic. For every Internet success story, there are countless failures. To succeed, a venture has to be conceptually brilliant, quick off the mark and able to woo investors. In the following pages, we'll take you through the various stages of a successful Internet play, from being a promising start-up; to winning financial backing from an "angel" investor and, subsequently, a venture capitalist; to maturing under the guidance of an "incubator"; and finally becoming ready for the big payout: either a stock market listing or simply selling the company.

Fortunes will be made. Richard Li's Pacific Century CyberWorks group, a kind of Asian Internet mutual fund, last week announced yet another deal: a joint venture with CMGI to develop Asian versions of the American company's Internet brands, like Lycos, AltaVista and AdForce. PCCW is now priced as one of Hong Kong's biggest companies; a year ago it didn't exist. Its profits so far: zip. In Singapore, Chua Kee Lock had a net worth last year of $250,000, if you counted his car and pension fund. Today, he's CEO of a (profitless) Internet telephony company and has a personal net worth of $6 million. To prepare for the high rolling that's to come, NASDAQ-style exchanges are appearing in Hong Kong, Shanghai and Tokyo.

Fortunes will be lost as well in the market gyrations that are already wracking the region. But risk is what Asia has always excelled in. "The Pacific Century has not been lost," says Singaporean Netrepreneur Wong Toon King, "only delayed a bit." A brand new future? A bubble beyond anything we've seen in the past? A bit of both? Brace yourself: by any standard, Asia's New Economy is going to provide a wild and thrilling ride.

First, Create the Hot Start-up
Then Pray for The Angel
Next, Call in The Venture Capitalist
Cozy Up with The Incubator
Now You Are Ready for The Listing
Or, You Can Just Sell Out

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