You have a very powerful player moving into a very complementary business. Legend says it sold 100,000 of the special-button PCs in the first quarter of this year, out of total PC sales of 430,000. Advertising is practically nonexistent, but Ma says the emphasis now is on generating traffic in hopes of reaping revenues in future from on-line sales, stock trades and other commercial activity. Whether, indeed, profits can be generated that way is as big a question for Legend as for portals everywhere, complicated by the low level of credit-card usage in China. They have a strong brand name.
Legend stands in a very good position to become one of the leading portals.
Legend has two other facets to its Internet strategy. It is partnering with Hong Kong's Pacific Century CyberWorks to develop a set-top box through which mainlanders can receive PCCW's planned broadband Internet entertainment service, Network of the World. PCCW hopes to distribute the service starting later this year via satellite and cable networks. All these plans probably would have wowed investors a year ago. But in the present atmosphere of dotcom scepticism, Legend finds itself playing up its hardware roots and cautious management style.