The decline came as SPH did its best to puff up the price. An article in the SPH-owned Singapore Straits Times that also appeared on AsiaOne's home page, trumpeted a 36% increase in AsiaOne's page views to 79 million in May from 58 million in April.
The article also cited a report by AC Nielson, a media ratings company, that ranked AsiaOne second in terms of the amount of time Singapore users spent on the site when accessed from their homes. It failed to mention that the ratings agency ranked the company eleventh in terms of unique users, a number that's important to advertisers because it discounts users who access the site multiple times.
The decline didn't surprise analysts, who said the price was too high relative to AsiaOne's growth potential. A price of S$0.60 represents 30 times the company's projected revenue for next year. That's higher than all but the dotcom behemoths, most of which trade at less than 10 times revenue. And 79 million page views a month û about 2.6 million a day, pales next to portals such as Hong Kong-based portal Sina.com, which has 25 million page views a day.
"We took some stock at the IPO primarily because of the nature of our fund," says Lim Fang Suan, portfolio manager for SG Asset Management's newly launched Asian New Economy Fund. "When we put the bid in we didn't really want to do it because we thought the price was a bit high, so we just bought a small amount and may accumulate it at better levels in the market."
AsiaOne, which distributes SPH-owned newspapers such as the Straits Times and the Business Times over the internet, faces competition from big content providers such as Yahoo! as well as regional pan-Asian providers such as Singapore-based Catcha.com and Hong Kong-based Asiacontent.com.
To the extent that AsiaOne is backed by the deep-pocketed SPH it may have more cash available than some of its rivals, analysts say, but its long term growth prospects are limited by its Singapore focus. In this respect, they say, it's similar to Hongkong.com, the Hong Kong unit of portal Chinadotcom.
Hongkong.com's loss widened to HK$11.33 million, or HK$0.0032 a share, for the three months ended March 31, from a loss of HK$2.14 million, or HK$0.0006 a share in the year earlier period. Revenue rose to HK$16.31 million from HK$173,000. The company's shares have fallen 84% to HK$1.41 in the three months since it was listed in March.