Malaysia budget will help VCs

By Julian Matthews

KUALA LUMPUR–Malaysia has proposed that its central bank, Bank Negara Malaysia, and two commercial banks provide RM300 million to finance venture capital companies (VCCs) to support the country’s desire to shift to a knowledge-based economy.

“VCCs will (also) be given full tax exemption on all sources of income received during its life span or for a period of 10 years, whichever is earlier, ” said First Finance Minister Daim Zainuddin at the unveiling of the federal budget in parliament today.

He said the tax holiday, however, carries the caveat that VCCs invest at least 70 percent of its funds for seed capital, start-up capital and first-stage financing.

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Malaysia Raises Ante On Venture Cap For IT Companies

By Julian Matthews

Malaysia is earmarking 200 million ringgit (US$52.6 million) to set up a venture capital fund for high-tech projects and proposes a tax-holiday for venture capital companies (VCCs), First Finance Minister Daim Zainuddin announced today in parliament as part of his federal budget speech.

“Financing of venture capital must be enhanced to encourage the development of new high technology industries as the engine of economic growth,” said Zainuddin.

He added the government is also proposing central bank, Bank Negara Malaysia, and two commercial banks set up another fund worth 300 million ringgit ($78.9 million) to finance VCCs.

However, he said at least 70 percent of the funds given must go for seed capital, start-up capital and first stage financing of promoted activities such as advanced electronics, biotechnology, precision engineering, advance manufacturing and information technology.

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Virtual Varsities: Getting a degree from your desktop

by Julian Matthews

Jalaluddin Abdul Halim once took long, lonely bus-rides to-and-fro Ipoh city from the remote estate off Bruas where he lived and worked - a journey of nearly 100 km - just to attend accounting classes.

“Sometimes I would reach home at 3am and have to go to work the next day,” he said. The trips also entailed leaving his wife and young children thrice a week to fend for themselves.

But his determination eventually paid off. In 1992, he obtained his diploma which led to a subsequent rise in pay and broadened his career options.
Read more plans Nasdaq listing in 12 months

By Julian Matthews

KUALA LUMPUR–Asian portal player plans to list on Nasdaq in 12 months.

Chief executive Patrick Grove said the company may also seek a dual listing in Malaysia or Singapore within the same timeframe.

He was speaking at the launch of Malaysian version of its portal. The site is currently in English but Malay and Chinese language versions are in the works.

Read more Closing First Round VC Funding For MP3 Website

By Julian Matthews

Asian portal player is set to close its first round of venture capital for its popular MP3 music site “” soon.

Patrick Grove, chief executive officer, of hopes to get between US$500,000 and US$1 million for the popular Website which will be spun off and be developed independently. was recently listed among the Top 25 search engines for MP3 in the world by industry watcher MP3Now.

“We are the positioning the site as a hub for distributing music for Asian acts,” Grove told Newsbytes. “It will be like an Asian- equivalent of Nasdaq-listed We will focus on unsigned acts in the region to put out their original music on the site and we are also talking to major established labels and distribution houses for partnerships.”

Grove expects a paradigm shift in the next three to five years when established ways of distributing music today will be overturned and the Internet will be play a dominant role.

“When this shift happens, the leading distributors of music on the Internet stand to gain and we plan to be one of the key players,” he said.

Earlier, Grove said was aiming for an IPO on the Nasdaq market by the year 2000 but a listing on a local bourse such as the Kuala Lumpur Stock Exchange or Singapore Stock Exchange was more likely.

He said Catcha was also planning to expand to country-specific portals for Australia, Philippines and Thailand in addition to its present portals in Malaysia, Singapore and Indonesia.

Chief operating officer Nic Lim said the company was also looking into having Chinese and Malay language versions of the portal soon.

Lim said the company had also applied to receive Multimedia Super Corridor status which qualifies them for tax breaks, world-class communications infrastructure and freedom to import foreign knowledge workers within the high-tech zone.

“We are enjoying tremendous exponential advertising growth rates of between 25- to 50 percent per month and have a hit count of 10 million per month,” he said.

Lim conceded that e-commerce and banner ad market from local companies was still weak but he expects “the tide to change.”

Set up in July by four entrepreneurs each under 25-years-old from Malaysia, Singapore and Japan, the company recently received venture capital amounting to 12.1 million ringgit (US$3.2 million) and is currently capitalized at 76.5 million ringgit ($20.1 million), making it one of the largest Internet companies in the region.

Funding came from a group of both local and overseas investors including Arboc Investments, an investment holding company for the Shaw family, Australian company Imperial Technologies, Geneva-based Alternative Investment Management Group, Hong Kong venture cap company Axiom Funds Management and private investors in Malaysia, Singapore and Hong Kong. is targeting a third round of investment from institutional investors and merchant bankers.

Published in Newsbytes, Oct 27, 1999.

Malaysia’s Xtremedia Closes As Asian Internet Competition Grows

By Julian Matthews

Award-winning Malaysian news and information Website Xtremedia closed its virtual doors earlier this week after 20 months of operations.

The company cited “increasing challenges in the Internet market” as the reason for the closure.

Website owner BRG Interactive Digital Media Sdn Bhd (IDM) sunk over 2 million ringgit (US$526,000) into the Website before calling it quits, said executive director Gerard Lim.

“It was a matter of focus. There are two mines to mill, and we had to make the difficult decision to channel resources to only one mine,” he said.
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Malaysia govt should not push telco mergers, says analyst

By Julian Matthews

KUALA LUMPUR–The Malaysian government should back-away from attempting to merge the six telcos in the country into three as it would do more harm than good to the industry, says a Gartner Group analyst.

“Consolidation is necessary. But when the government intervenes, it risks delaying an inevitable process. Government intervention tends to strengthen the hand of the weakest and undermine the fittest. That will not strengthen the sector,” said Bertrand Bidaud, director of telecommunications for the Asia-Pacific Gartner Group.

Bidaud said intervention by governments elsewhere has not been positive citing France Telecom, Deutsche Telekom and several Asian mergers that remained “superficial”.

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Lines Among ISP, ASP, VAR Blurring Says Intel AP Exec

By Julian Matthews

Internet service providers (ISPs), application service providers (ASPs) and value-added resellers (VARs) are evolving into one-stop shops for a full spectrum of Internet services instead of providing just access, according to Intel Asia Pacific ISP channels marketing manager Loke Yoon Kun.

Speaking at the Malaysia launch of the chip giant’s worldwide program to push its networking offerings, he said, “The lines among ISPS, ASPs and VARs are blurring. The new one-stop-shop role calls for value added services and products such as Web hosting and creation, e- commerce and specific networking equipment sited on customer’s premises.”
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When teenagers rule the world

By Anita Devasahayam

Author Douglas Rushkoff in his book, “Playing the Future: What We Can Learn from Digital Kids”, coined the term “screenager” to describe a child born into a culture mediated by the television and the computer.

He said that children are the natives in a media-rich world where adults are immigrants. Parents and teachers haven’t even begun to understand the language in this new information-saturated environment, while teenagers are hip to the new media and we scorn their savvy at our peril, he argued.

Written in 1995, Rushkoff’s assertions may be even more relevant in today’s Internet-plugged world. The examples are everywhere. A 16-year-old Irish girl invents a new data-encryption technology to rival the RSA encryption algorithm. A 14-year-old South Korean runs a successful MP3 Web site. A 16-year-old American boy gets an internship at a Silicon Valley company.
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Seagate will not shut down any Malaysian plants

By Julian Matthews

PENANG–Seagate Technology, the world’s largest disk drive manufacturer, will not shut down any of its seven Malaysian plants, said a senior executive.

“We do not have any plans on the table to close any factory in Malaysia,” assured Seagate chief financial officer Charles Pope in a teleconference to announce the company’s first quarter results for fiscal 2000.

Last month, Seagate Malaysia offered voluntary retrenchment packages to its staff as part of a worldwide restructuring plan to bring headcount down by 10 percent.

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