Naspers looks East

By Siyabonga Africa, ITWeb junior journalist

Johannesburg, 02 Sept 2008

Naspers is building on its Internet businesses in Poland and the Czech Republic and, at the same time, is eyeing Web developments in China and Russia.

Naspers MD Koos Bekker announced on Friday that the media company was looking at expanding its Internet companies into the rest of Eastern Europe.

Naspers is a major shareholder in the Allegro Group, which runs a number of e-commerce trading platforms that range from online property sales to price comparison Web sites.

The group has a presence in more than eight countries in Eastern Europe, including Poland, the Czech Republic and Russia. Naspers hopes to use Allegro to expand into the rest of the region.

Naspers head of investor relations Meloy Horn says it is building on businesses in operation, as a means to expand into other countries. "These operations are in different stages of development, but, as is the case for most Internet businesses, they are not very capital-intensive."

She adds that Naspers sees great opportunities in Eastern Europe and this was the reason it initially acquired Tradus (now called Allegro and Ricardo, the second subsidiary in that region) late last year.

"Russia and China are adopting the Web like wildfire," says BMI-TechKnowledge director Brian Neilson. "Russia is leading the way in respect of some applications, including mobi-sites for downloading pirated music directly to cellphones."

Neilson explains that Naspers was one of the first companies outside of Eastern Europe to see the potential and take a direct stake in instant messaging companies in China and Russia. Naspers bought 30% of Mail, a Russian instant messaging company, in April last year.

"As with any dot-com type of business, one requires viral marketing of free content, and can expect success in respect of widespread uptake of free content, followed by challenges in monetising this success," says Neilson.

Horn says so far the companies operating in Poland and the Czech Republic have been fully monetised and the other operations are gearing towards that point.