Once More, AOL Retreats From Mainland China
AOL confirmed Internet reports that it has closed its China offices, though a spokeswoman for the Time Warner (TWX)-owned company declined to give further details.
According to one of the reports, from Chinese language new portal Netease.com, some 100 employees in its Beijing office received layoff notices via email this morning.
While the AOL China Web site is still up, it hasn't been updated since Tuesday.
Quoting people within the company, several Chinese Web sites said AOL will keep two or three employees in Beijing to deal with public relations. Phone calls to the office, located in the technology enclave of Tsinghua Science Park, weren't answered. A poster on the front gate listed phone numbers for an outside public relations firm.
The reports say the closing won't affect the AOL Chinese language Web sites run in Hong Kong and Taiwan districts. They also cite the global financial crisis for AOL's retreat. It has already announced a plan to lay off 700 employees world-wide, accounting for 10% of its staff, due to a drop in ad revenue. One former AOL China employee added that another reason might have been high operating costs and low returns in its China business.
In 2001, AOL set up a joint venture with computer maker Lenovo (LNVGY) and invested $100 million in establishing its Chinese-language Web portal, FM365.com. The joint venture was shut down in 2004. AOL returned to the Chinese market in April 2008 with a new homepage.
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