Acer to Pump $400m into New Internet Businesses

Computergram International, August 17, 1999

Taiwan's Acer Group is to invest at least $400m in two new internet-focused groups and expects outside partners to put it twice that amount says chairman Stan Shih. Around $200m is earmarked for a digital services group with the rest for a venture capital operation which will finance primarily software companies. The latter operation Acer SoftCapital, is hoping to raise $1bn. "We will invite financial institutions to invest with us, maybe through a number of funds which combined together should reach $1bn," Shih said.

The company's internal digital services group, which is charged with developing a wide range of internet-related services and products, will get an initial $50m injection with the rest of the money being committed by the end of next year, Shih said. "Operationally, because there will be many joint venture partners, the overall investment may be $400m or more," he said.

Easy-to-use "online solutions" for the masses comprising both hardware and software services are the key focus of the digital services group's activities. Shih calls the new breed of dedicated information and internet appliances XCs, short for X-computers. Already in production are CyberTVs, which are part TV and part PC, web phones, which combine the functions of a phone with internet access, and i-stations or internet computers dedicated to 'edutainment'.

"The product itself is easy to develop, but it also needs an enabling service to integrate as a complete offering to the customer," Shih said, "so although we have developed a high number of XCs, many are waiting for services before they can be launched."

The company also announced investments in two Taiwanese internet companies. The two are Webpoint Co, in which Acer took a 25%, worth around $4m, and Sunnet Tech Co, in which it took a 30% stake worth around $1m in US dollars. Both companies offer web-based information and internet services. Acer is developing its non-hardware businesses, and has said that it wants software to account for up to 30% of its revenue by 2010.