Think Equity Offers Digital Media Investment Report

Filed in archive Technology Report on July 5, 2006

Not unlike my colleagues at Marketwatch, especially tech commentator, John Shinal's recent article, "Earth to Google:Beijing is not Silicon Valley," I am generally skeptical of analysts reports, especially those taking aim at the online marketplace.

In the case of Think Equity, a San Francisco based research and investment banking advisory services company, CVN takes valuable notice of their recently released Think Equity China weekly report on the wireless value-added services (WVAS) stocks.

No one disputes that with over 400 million mobile users that there is a growth market. However, according to Think Equity's Michael Zhang," the timing and
the scope of the potential policy changes at China Mobile remain as a question mark, we do believe the WVAS market needs a shake-up to become more orderly for sustainable growth, and the major service providers under our coverage will benefit from the changes despite of one or two quarters of hiccups. We think Investors should look beyond the next six months or so and accumulate shares of the industry leaders at reasonable prices in coming weeks."

No doubt many Silicon Valley VCs are taking close notice of China's potential new regulations now being considered at a time of exploding Internet and cellphone use. Think Equity's analyst Zhang revealed before America's celebrated 4th of July holiday that " the Chinese government remains the ultimate arbiter of media control. Control over media and communications is a core strategic asset of the Chinese communist regime..."

With Sand Hill Road's recent investments into Chinese search engines, the government's recent announcements of its efforts to reign in high tech communications might be a cause for some pause and review. We also recommend taking a look at Ezra Marbach's China Stock blog for more insights on the current China Internet stocks.