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)