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Our insurance coverage is limited
Internet activities pose unique risks, including unanswered legal and regulatory questions, some of
which can be transferred by means of acquiring insurance whilst others have to be retained by us.
With the rapid changes in the Internet technology, the insurance market may not be able to keep
pace with the speed of change and we may not be able to obtain all the innovative portfolio of
insurance products, which will be required to cover an array of risk exposures, on commercially
reasonable terms. Details on our insurance coverage are set out in the “Business – Insurance”
section of this Prospectus.
RISKS CONNECTED TO THE INTERNET MARKET
The Internet market is intensely competitive
Portal operations
Competition among Internet sites is intense and barriers to entry are also low, enabling newcomers
to launch competitive sites at a relatively fast speed. In addition, the Internet market is relatively new
and new business models will continue to evolve. As a result, our competitors may better position
themselves to compete in this market as it matures. Some of our existing competitors, as well as a
number of potential new competitors, have greater name recognition, longer operating histories,
larger user bases and significantly greater financial, technical, marketing, public relations, sales,
distribution and other critical resources than us. We compete in the portal sector on the basis of
traffic, ease of use and functionality. However, any of our present or future competitors may provide
products and services that provide significant performance, price, creativity or other advantages over
those offered by us. There can be no assurance that we will be able to compete successfully against
our current or future competitors.
Our Directors believe that the competitors of the Group in the portal sector include AltaVista Asia,
AsiaContent.com, Lycos Asia, Pacfusion.com and Yahoo!Asia. In addition, sina.com, sohu.com,
Yahoo!China, and netease.com compete with Zaobao.com.
Other news content providers and portals competitors are channelnewsasia.com, eastciti.com,
scmp.com, Yahoo!Asia, Bloomberg and Reuters.
In the future, we may encounter competition from ISPs, website operators and providers of web
browser software (such as Netscape or Microsoft) that incorporate search and retrieval features into
their services. Our competitors may develop web search and retrieval services that are equal or
superior to those which we offer our users and may achieve greater market acceptance than our
services in the area of performance, ease of use and functionality.
Advertising
RISK FACTORS
We believe that the number of companies relying on fees from web-based advertising placed on
their own websites has increased substantially. As a result, we may face increased pricing pressure
for the sale of advertisements on our portal, which would have a material adverse effect on our
business and financial condition.
Our competitors may be able to undertake more extensive marketing campaigns, adopt more
aggressive pricing policies and make more attractive offers to qualified personnel, distribution partners,
advertisers and content providers. Further, we can make no assurance that ISPs, web browsers and
web content providers will not be perceived by advertisers as having more desirable websites for the
placement of advertisements. Accordingly, we can provide no assurance that we will be able to
retain advertisers, maintain or increase traffic on the Group’s portal, or that competitors will not
experience greater growth in traffic as a result of such relationships.
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