Alliance with ChinaByte Group
Tokyo, June 20, 2006 - Impress Holdings, Inc. (TSE: 9479), announced today that it has entered into a capital tie-up with the ChinaByte Group, operator of the major Chinese IT information sites gYesky.comh and gChinaByte.com,h and at the same time has begun studying an operational tie-up. Going forward, the two companies plan to utilize the Impress Groupfs content and know-how to jointly expand their Internet businesses in China.
1. Objective of Tie-Up
The Impress Group is working to utilize its highly specialized content and know-how in information technology (IT) and other fields to expand its areas of business, in a variety of overseas locations as well as in Japan.
The ChinaByte Group is very highly regarded among Chinese businesses and individuals as a Web media engaged in the same area of specialized IT-related information. We believe that this capital and operational tie-up will provide opportunities for both advertising and supplying content from Japan to Chinafs high-growth information technology and consumer electronics markets, and that synergies can be expected to emerge.
By working together, the two companies intend to further develop ChinaByte Groupfs business in China, with the aim of an IPO for ChinaByte Group in the future.
2. Background of Tie-Up
The number of Internet users in China continues to grow by double digits annually, and exceeded 111 million as of December 2005 (an 18.1% increase from the previous year). In terms of penetration, however, Internet use is still low, with penetration rates of 8.5% of the total population and 16.9% in urban areas, so it can also be said that room exists for significant growth.(1)
The Internet advertising market in China was worth a total of 4.6 billion yuan (approximately \66.7 billion) in fiscal 2005, an increase of 48.2% from the previous year. It is estimated that the figure will reach 15.7 billion yuan (approximately \227.6 billion) in 2010, and further growth is expected in the future.
The main use of the Internet in China is to read news, and there is a great deal of interest in IT-related news. We therefore believe that there is strong demand in China for the IT product information for Japanese manufacturers that the Impress Group distributes.
3. Overview of Capital Tie-Up
Impress Holdings has acquired shares of Yesky.com, Inc., the holding company for the ChinaByte group, through a capital increase via third-party allocation as follows:
| No. of shares previously held: |
0 shares (0% shareholding) |
| No. of shares acquired: |
3,701,000 shares |
| |
(acquisition amount - U.S.$10,000,000) |
| No. of shares held following allocation: |
3,701,000 shares (19.99% shareholding) |
4. Overview of Operational Tie-Up being Considered
The Impress Groupfs gImpress Watchh (http://watch.impress.co.jp) comprehensive digital news services provides approximately 1,600 news articles monthly, in Japanese for readers in Japan. There is demand among readers in China for some of these articles, however, and access from China is considerable. We are therefore considering officially providing this content as an Impress Watch Channel (provisional name) on the ChinaByte site, and expect an advertising-based business model to be established in the future.
In addition, both digital advertising operations and Internet-based video businesses are showing remarkable growth in China, and we are exploring the possibility of separate tie-ups in these areas. In particular, we would aim to contribute to Japanese IT-related product manufacturersf and software manufacturersf marketing in Asia.
5. Overview of Tie-Up Partners
ChinaByte Group
ChinaByte is an Internet media group handling specialized IT-related information. The Group operates three channels: gChinaByte.com,h which provides information on trends and the latest technologies in the IT sector; gYesky.com,h which provides consumer-oriented IT product information; and gTechTarget Chinese Version,h a tie-up with TechTarget of the U.S. that provides information for IT professionals. The three channels combined receive 600 million page views monthly by 45 million unique users (ChinaByte statistics).
According to an industry association survey of Internet businesses in China, ChinaByte was ranked as the No. 1 brand among IT-related Internet sites. A survey by the Chinese Internet research company iResearch (http://www.iresearch.com.cn) ranked ChinaByte No. 1 in terms of advertising volume among Chinese IT-related Internet sites (and No. 9 among all Chinese Internet sites).
In addition, ChinaByte owns SP licenses for cellular phone users in China, and provides SMS, MMS, WAP, IVR and GAME services to China Mobile and China Unicom.
ChinaBytefs fiscal 2005 group sales totaled 62.76 million yuan (approximately 900 million). Its primary revenue sources are banner ads and other Internet advertising on its Web sites, and fees for value-added information services for cellular phones.
Yesky.com, Inc.
Holding company for the ChinaByte Group. Initial investors included China Popular Computer Week Co.,Ltd, publisher of Chinafs largest-circulation specialized IT newspaper China Popular Computer Week (weekly; circulation 700,000), and IDG, the worldfs largest IT media group.
| Company name: |
Yesky.com, Inc. |
| Established: |
March 2000 |
| Head office: |
Grand Cayman, Cayman Islands |
| Representative: |
Chen Zongzhou |
6. Future Outlook
@This tie-up will have a negligible impact on parent results at Impress Holdings. Announcements will promptly be made in the event it becomes clear that future business developments will have a significant impact on consolidated results.
Notes:
(1) From China Internet Information Center (http://www.cnnic.com.cn)
(2) From iResearch (http://www.iresearch.com.cn)
