Two firms vie for local internet market
Two firms vie for local internet market
JAKARTA (JP): With internet users in Indonesia expected to
reach nearly two million within the coming year, two companies
have launched website portals for Indonesia-related information.
At separate ceremonies on Wednesday, www.detik.com and
www.Astaga.com both staked claims in the potentially huge
cybermarket and declared their official presence as premier
Indonesia-based portals.
The surge of interest in the cyberworld seems to have been
generated by the growing potential of e-commerce and increasingly
low connection costs. According to the Association of Indonesian
Internet Service Providers, about 1 million Indonesians are now
online. By 2001 the number will have doubled to about 1.98
million.
E-commerce, the main engine prompting continued expansion into
the cybermedium, is expected to grow by almost 10 times.
U.S research firm International Data Corporation estimates
that the number of Indonesians making purchases online is
expected to leap from some 70,000 in 2000 to 600,000 in 2003.
Detik.com is no stranger to Indonesian internet surfers as it
is one of the leading cybernews content providers, with over
200,000 unique visitors accessing the site each month.
However on Wednesday, it took the plunge by relaunching itself
as a website portal.
"After becoming the most popular internet site in Indonesia we
will soon position ourselves as online distributors for content
providers and other e-commerce businesses who target Indonesian
internet users," said Abdul Rahman, president director of
Agrakom, the company that owns the website.
Originally established in 1998, the website was initially
established to provide Indonesian news.
"There was a lack of interesting content at that time, so we
decided to offer fresh, breaking news, which was more attractive
and more in demand by common users," content director Budiono
Darsono said.
He claimed the website was now quite profitable, earning about
Rp 120 million per month in net income from advertising.
By comparison, Astaga.com is only now making its debut.
However, its team boasts a wide range of IT experts and
editorial staff.
Fully owned by foreign investors, its top level management is
headed by three expatriates -- Jonathan Morris, Andrew Hayek and
Ian Whalley.
All have solid information technology experience. The first
two have worked for Boston Consulting Group.
Like Detik.com did, Astaga.com is, initially, focusing on
Indonesian news content in Indonesian.
It has recruited some 30 experienced journalists from various
local media such as Kompas, Suara Pembaruan, and RCTI.
But it appears e-commerce is the goldmine that both these
portals will be banking on.
Both companies have invested heavily in preparation for e-
commerce as not only are the number of users growing, but recent
surveys indicate that internet users here hail from the middle to
upper economic bracket.
Billions
Detik.com has spent some Rp 2 billion in developing their site
into a general portal service.
Abdul said Agrakom plans to float its shares on the market in
the third quarter of next year to finance further expansion.
"It is the right time for information technology companies,
including internet providers, to enter the stock market because
IT shares have become and will continue to be a popular choice
for stock brokers," he said.
He said through private placement the company sold up to 20
percent of its shares in January to a Hong Kong-based financial
institution, techpacific.com.
Abdul was upbeat about the future listings plan because the
company had seen good growth in business -- an average of 60
percent in the past year spurred by the robust development of
Detik.com.
Abdul revealed the company would work together with
techpacific.com to form a separate joint venture that would focus
on developing internet businesses in Indonesia.
A representative of techpacific.com, Ilyas Khan, said the
company was set to pledge US$35 million for the joint venture,
expected to be finalized sometime in July.
"We intend to provide support, both financial and technical,
to new firms because there are so many young entrepreneurs in
Asia, including Indonesia, who are very interested in developing
business in information technology, but find it difficult to find
investors," he said.
Techpacific.com had received dozens of proposals from various
companies in Asia, Khan said, adding that Agrakom's Detik.com was
the company's first investment project in Indonesia.
He said the Techpacific.com was currently assessing about 15
proposals from Indonesian companies and expected to decide on one
or two new investment projects in the next two or three months.
"We expect to make another five to six investment projects in
Indonesia this year, excluding the joint venture project with
Agrakom," he said. (cst/mds)