| |
 |
Falling share price keeps Richard Li in father's shadow
|
From The Asian Wall Street Journal Feb 12
Hong Kong--Sitting at the head of a conference table, Richard Li takes a swig of carrot soup from a coffee cup and ponders a battle with the world's most powerful software company.
“Are you comfortable about being competitive with Microsoft?” he says, cutting off a colleague on a speakerphone who wants Mr. Li to invest in a rival to the U.S. giant.
“I'm a little worried about that,” admits the voice.
“Just a little?” Mr. Li presses.
“Quite,” comes the reply.
A titter rises from the nine executives at the table. “We look so stupid if we take on Microsoft and lose,” declares Mr. Li, founder of Pacific Century CyberWorks Ltd. “Institutions will say: Are we investing in a bunch of nuts or what?”
A year ago, the “nuts” line might have earned some laughs. But now it hangs over a room gone silent as executives turn their gaze to Hong Kong's green mountains outside the 42nd-floor conference room. Mr. Li's dealmaking has sputtered, his company's stock price tumbled and, unusual in a region where families do business together, he's competing fiercely with his 72-year-old father.
As his company fortunes suffer, so too have Mr. Li's dreams of moving out from the shadow of his billionaire dad, Li Ka-shing, who for decades has held sway over this commercial hub on China's south coast. Aggravating matters, the elder Mr. Li late last month was forced to reject talk that his flagship company Hutchison Whampoa Ltd. would buy a stake in struggling CyberWorks. Although the two are locked in competition locally, his dad's money and powerful name have been a constant backdrop to Richard's career.
Only months ago, Richard Li, 34 years old, seemed to have trumped his father. He was hailed as the Asian face of the Internet era, a perfect blend of Silicon Valley and Hong Kong, when he launched CyberWorks in 1999. His grand scheme: the “Network of the World,” a Web-based service that would provide Internet access and interactive entertainment to a global audience. CyberWorks had ambitious plans to create most of the content from scratch from a glittering London production studio.
After taking CyberWorks public in august 1999, the stock shot up astronomically and Mr. Li pulled off one of the biggest coups of the Internet era, parlaying his firm*s stock price into control of Hong Kong's former telephone monopoly, Cable & Wireless HKT. The Hong Kong government showed so much faith in Mr. Li that it joined him in a US$2 billion office complex called Cyberport. Mr. Li capped his success by enlisting partners such as chip maker Intel Corp. and Australia's telecom giant Telstra Corp. to build a firm focused on the high-speed Internet business.
It all seemed to foreshadow a passing of the business torch from father to son -- or at least acceptance of the younger Li into the ranks of the elite who dictate this city's business life. His 72-year-old father, who chairs Hutchison Whampoa, remained king of Hong Kong's Old Economy, dominating real estate, shipping and supermarkets. But Mr. Li was the paragon of the new, and with a personal net worth of nearly $9 billion he approached the wealth of his father.
The elder Mr. Li, however, has moved aggressively into technology and rolled off lucrative deals. Last July, for example, he sold his 22% stake in VoiceStream Wireless Corp. to Deutsche Telekom AG for $50.7 billion, and the company is now plowing cash into Europe for new phone licenses. He is also ahead of Richard's company in the battle for Hong Kong mobile-service subscribers and second to Richard in fixed-line service. The two compete with undersea phone cables and have crisscrossing Internet interests.
Meanwhile, CyberWorks has already had to scale back original plans for Network of the World. Following a road show last November, the company announced it was cutting by one-third to $1 billion the amount it would spend on NOW and other related services over five years. It's now building new studios in Taiwan and Hong Kong to make content less Anglo and more Asian while mulling staff cuts at its London studio. And CyberWorks executives admit that broadband use -- the cornerstone of this venture and, indeed, the entire company's growth -- has lagged behind expectations.
|
|
|
|
