Marc Phillips

The mood around some circles of Asia’s Internet technology market reminds me of 1994 – there are a lot of non-believers with a sour view of the real opportunities that await us.   Companies that had attached their hopes to the Internet are chopping forecasts, reducing staff and scrambling to find revenue and cost efficiencies from offline parts of their business. Investors here are in a subdued mood and the capital markets will no longer give the New Economy the benefit of the doubt. 

Fortunately, if you're an Internet business and headquartered in Asia Pacific, I believe there is a strategic advantage that is being dangerously ignored. Unlike the U.S., Asia Pacific companies have not excelled at marketing their customer base or their regional strengths. Now is the time to flaunt this, because Asia is no question a high priority for foreign Internet companies and investors. 

You should be thinking about the massive capital still on hand. The headline question is 'How can my organization tap into the hundreds of billions of dollars raised in debt and equity issues in Europe and North America in the past five years'. Remember, a lot of that money is still washing around the market. Of course, a bundle of cash was wasted and plundered. Yet, there significant cash in the bank accounts of Internet companies worldwide, and they all are focusing on global domination. The treasure chest for them is Asia, China, Japan, and India.

I know this is not merely imaginative thinking on my part. I constantly sit across the table in negotiations with global companies desperate to accelerate their entry into Asia. I also conduct research for savvy regional chief executives who are trying to entice European or North American strategic partners.

Many Asian companies first thought they could ``cookie-cut’’ business models from overseas markets. They were wrong. If you were a CEO of an Internet company in Asia-Pacific, I would not make the same mistake of waiting for the international players to swarm into the region. Whilst you are gearing up your own regional growth, it is critical to engage in discussions with foreign companies. For those surviving Internet pure-play companies, you will surely appreciate the essence of Internet economics is to work with as many other players as possible. I urge these Internet companies to avoid being regionally blinkered and explore partnerships with the next wave of multinational technology corporations that need Asia to be part of their product offering. 

The successful CEO of an Internet organization thinks beyond today and envisages where they will be in five years. I flew into the U.S. recently and noticed a corporate billboard, which claimed that by 2007 Chinese would be the most widely spoken language on the Internet. 

These strategic messages are being planted in the minds of the European and North American CEO’s who are now looking at partnerships in Asia Pacific. This could be the greatest opportunity for Asia Pacific businesses to maximize wealth, either through joint ventures, or by eventually sealing a profitable exit strategy. 

That opportunity risks being sold short too. I believe these foreign entrants can be forced to pay for the privilege of entering Asia. Japan and Korea's 15 million wireless Internet users are being eyed by foreign corporations that looking to ride the mobile Internet wave throughout Asia.  Singapore has a high level of Internet sophistication, and China and Taiwan are gaining in maturity. Most European and U.S. companies are culturally confused about Asia and hence a premium can be set on the price it takes to do business in the region. Differing cultures is one of the Great Virtual Walls that is yet to be smashed by the Internet economy.

Asia’s Internet markets already have genuine hotspots of rampant growth. It doesn’t matter that Asia missed out on the start of the Internet boom. Hundreds of European and American Internet companies are now moving to expand and distribute their business models worldwide. For Asia Pacific, the money flow has just begun.

Pension fund managers in the U.S. and Europe and now fixated on the 40 million wireless users in Asia, and the broadband and data carriers are maneuvering quickly. With China set to enter the World Trade Organization, Silicon Valley venture capitalists are lurking around Asia, as they need uncultivated technology pastures to plant their cash. Watch out for similar deals such as eBay and Yahoo!’s aggressive moves into Korea and Taiwan.

As pension funds increasingly target Asia, organizations based in the Asia Pacific region must remember they have a unique understanding of the business mindset and the cultural landscape. These are bargaining chips at the negotiating table for every CEO that has their company's future and personal fortunes tied up in technology businesses. Get ready, and don’t miss out on the cash.

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Marc Phillips is the CEO of APT Strategies and sits on the advisory panel of companies including Cyberstox Ltd., Wall Street Direct Inc, Imediation Inc and Zoomify Inc. He is the author of four Internet books including 'Successful e-commerce', 'The World's Best Online Advertising Campaigns' and 'The World's Most Profitable Internet Business Models'.