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)