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Shanda Interactive on the prowl

0 CommentsPrint E-mail China Daily, March 2, 2010
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Shanda Interactive Entertainment Limited, China's second largest online game company, will focus on integrating its different media platforms while looking for possible acquisitions this year, in an effort to strengthen its portfolio.

"We will put most of our energy on business integration this year and meanwhile, seize potential acquisition opportunities if any," Chen Tianqiao, chief executive officer of Shanda, said during a conference call on Monday.

The Nasdaq-listed company said its net profit for the fourth quarter of 2009 rose to 369.3 million yuan ($54.1 million), a 13 percent increase from a year earlier.

Its consolidated revenue over the same period hit a record of 1.51 billion yuan ($221.6 million), up 49 percent year on year, in China's booming online game market.

Shanda has been stepping up its diversification pace recently as it seeks to expand its reach beyond the online gaming market.

Earlier this month, media reported that Shanda would launch an electronic reader called Bambook in the near future and its newly set up subsidiary in December 2009 will operate the e-book business.

Chen didn't confirm the report, but he said on Monday that "Shanda will learn from successful business models of companies like Apple Inc and Amazon."

Apple launched its first tablet computer iPad in January this year and Amazon is the seller of the popular e-reader Kindle. There is also a rumor that Shanda will buy Ourgame.com, a online game provider in China, but Shanda declined to comment on that.

Shanda has aimed to build itself into a comprehensive entertainment company from one only focusing on online games. Over the past few years, it has delved into publishing, online videos, films, television, music and online games through acquisitions.

"It seems that Shanda's efforts of acquiring and integrating the companies it bought has gradually paid off," said Zhao Xufeng, an analyst with research firm iResearch.

Shanda Games Ltd, the company's online gaming unit, had fourth-quarter revenue of 1.34 billion yuan, up 39 percent from a year earlier.

Shanda Online Holdings Ltd, the company's other major business besides online games, which covers online document publishing, music and other areas, reported revenue more than doubled from a year earlier to 295 million yuan due to the consolidation of revenue from Hurray! Holding Ltd, a distributor of music for mobile phones that Shanda acquired in July.

The company wants to build a Disney-like company with comprehensive entertainment businesses, but it still lacks a portal website and also an iconic symbol, like Disney's Mickey Mouse, for its business, which it may try to achieve in the following years, said Yu Yi, analyst with Analysys International.

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