M-Web acquires 100% stake in Astaga!com

M-Web acquires 100% stake in Astaga!com

JAKARTA (JP): South Africa-based Internet company M-Web
Indonesia has acquired a 100 percent stake in news portal
Astaga!com in a move to grasp a greater Internet audience share
in Indonesia.

M-Web's chief executive officer Stephen Gilmour said here on
Tuesday that the acquisition of Astaga would help M-Web market
its Internet related services given the portal's popularity in
Indonesia.

"This acquisition will strengthen M-Web's position as the
leading provider of Internet services in Indonesia," Gilmour said
at a press meeting.

The acquisition of Astaga!com includes all its online
subsidiaries such as PT Astaga Tour Online and PT Astaga Internet
Konsultindo.

Last year, M-Web's operator, PT Carakeyasa Binekatara,
purchased two other portals, Kafegaul.com and Satunet.com.

"We do acquisitions for speed. That's the only reason;
(acquisitions) get us bigger faster," Gilmour said.

However, he declined to say how much M-Web paid to acquire
Astaga.

M-Web, he said, had spend most of its total investment of
US$10 million in Indonesia on buying local companies.

Following the acquisition of Astaga, he said, M-Web would work
on differentiating the contents of its acquired web portals.

He said that Astaga, with its strong lifestyle section,
appealed to audiences of between 19 and 25. Whereas Kafegaul was
attracting a younger age group of between 16 and 22.

The more serious news portal Satunet targets people of 25 and
above, he said.

M-Web entered Indonesia in May last year, and has been
aggressively buying up local Internet companies to penetrate the
local market.

Aside from web portals, it has also purchased Internet Service
Providers (ISP) and companies offering information technology
consultation services.

Gilmour said that M-Web purchased web portals because it
wanted to build a strong image in the Indonesian market that
would later help it develop e-commerce services.

He expected M-Web's main source of revenue would come from e-
commerce.

According to him, trading in major industries, such as
textiles and timber, will be a among the first e-commerce
opportunities here.

He said M-Web generated its current revenue from its
consultation and ISP services, and he expected the company to
reach a break-even-point within less than two years.

At present, Gilmour went on, M-Web had no plans to invest in
another dot.com company, but would consider purchasing ISP
companies if they could help cut operating costs.

CEO of Astaga's operator PT Astaga Internet Konsultindo,
Andrew P. Hayek called M-Web a perfect match for his company due
to M-Web's strong foothold in the Internet industry.

He said the entrance of M-Web gave Astaga the financial
support that its former shareholders were unable to provide.

Astaga, he said, was established through a consortium of
venture capital companies comprising Hong Kong-based Capital-Z,
Olympus Capital Asia and their local partner PT Batavia
Investment Fund II.

According to him, Astaga's former shareholders originally
planned an Initial Public Offering (IPO) for the company.

"That's when venture capitalists make an enormous amount of
money, it's usual with an IPO," Hayek said.

But as the public's enthusiasm for investing in Internet
companies declined, the former shareholders have opted to sell
their shares in Astaga.

"Astaga's shareholders have been talking to interested parties
for about nine months now," Hayek said.

He declined to comment further on the sale. But according to a
source, Astaga was sold at a price of about $4 million by the
former shareholders, who had poured a total of $7 million into
the web portal.(bkm)