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Posted by: Bruce Einhorn on November 26, 2007
On Friday, Barry Diller announced that his company plans to make a big push into China. Diller says that his company, IAC/InterActive Corp., will be putting $100 million into the country. “We’ve certainly got enough capital to do damage,” the mogul said. That may be. But we’ve heard this story and the magical $100 million number before. It was only two years ago that Meg Whitman made headlines when talking about eBay’s plans to charge into China with a war chest of about $100 million. Unfortunately for eBay, local rivals weren’t scared off by talk of deep-pocketed Americans entering the market. Taobao, owned by local e-commerce pioneer Alibaba, so thoroughly took over the Chinese consumer-auction business that eBay last December threw in the towel, giving up on its stand-alone Chinese venture and forming a partnership with Li Ka-shing’s Tom Online.
Diller, to his credit, acknowledges that lots of other U.S. companies have, like eBay, tried and failed to make a dent in the Chinese Internet world. The same year that Whitman unveiled eBay’s China strategy, for instance, IAC took control of ELong, a Chinese travel service site. And with Diller’s company at the helm, ELong went nowhere, falling far behind local rival Ctrip. IAC’s in good company. So far, no U.S. Internet company has scored a big success in China. Amazon might be the one exception, since the company controls one of the biggest online retailers, Joyo, but it’s still very early in the e-tailing era. Others, including Google, Yahoo, and Microsoft, have struggled. (For more on emerging e-commerce in China, see this BW story).
Do Barry Diller’s folks know something that the others don’t? We’ll see. Diller says that IAC has learned from its ELong mistake. “I think we, in our imperialistic way, made some early dumb decisions and hopefully we’re making smarter ones now,” the AP quoted Diller saying on Friday.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.