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How The Downturn Will Impact China Internet Business.

By Dan Harris and Steve Dickinson

In a post at Ogilvy China Digital Watch, entitled, "David Wolf?s take on how the downturn will impact China?s Internet sector," Kaiser Kuo discusses a recent talk he had this with David Wolf of Silicon Hutong on this very subject. Not saying this makes their assessment flawless, but Kuo and Wolf are two of the most knowledgeable people out there on China's internet so when they talk, I listen. They are saying that foreign VC funding will decline and this will likely allow Chinese VC firms to gain inroads. Wolf also says that the smart money will cut back on advertising on other media before cutting back on internet advertising. During the dot.com boom, my firm represented a high flying Korean internet company. After a few weeks of effort (really way too little time), the Korean company had secured a $5 to $10 million commitment from a leading VC company. The next week the crash began and the Korean company ended up with zero. I can certainly see similar things happening again. Anyway, go here for the complete post as it and the comments are well worth the read.

Full post as published by China Law Blog on October 13, 2008 (boomark / email).