AOL Testing Internet Site in China

HONG KONG (Reuters) - More than a year after announcing its plans to enter China, Internet giant AOL has quietly begun testing a pay Internet service in the world's most populous nation, a spokesman said on Tuesday

Trials of the service, a joint venture with China's biggest PC maker Legend Group Ltd. (HKSE:0992.HK - News), began in August and are now taking place in about three dozen Chinese cities, said Rich D'Amato, a spokesman for AOL, a unit of AOL Time Warner (NYSE:AOL - News). The new service, whose

The new service, whose name in Chinese translates as "Flying Dragon," now has several hundred so-called "beta," or test users, most of whom were recruited over the Internet, he said

He declined to give a timetable for the service's official launch

"We've gone through launches in 17 countries in eight languages," he said in a telephone interview from the United States. "Every one of them takes a different length of time depending on the language, what you're doing and in how you're picking beta testers."

AOL's foray into China -- one of the first by a major non-Chinese Internet player -- comes more than a year after the Legend deal was announced with much fanfare.

The companies announced an initial investment of about US$200 million, with Legend holding a 51 percent stake and AOL holding the rest. But they have been tight-lipped over rollout schedules and content plans.

Foreign media outlets are largely banned in China, and Beijing's tight restrictions on media ownership and close scrutiny of content make it difficult for foreign players to penetrate the market.

D'Amato said that most of the content for the venture is at this stage supplied by Legend, which already runs its own Internet service and also provided backbone infrastructure for the joint venture.

If and when the new project goes forward, the new "Flying Dragon" dial-up Internet service would compete with local portal firms including U.S.-listed Sohu.com Inc. (NasdaqNM:SOHU - News), NetEase.com Inc. (NasdaqNM:NTES - News) and Sina.com (NasdaqNM:SINA - News).

The Legend venture is AOL's third dial-up service in the Asia-Pacific region, with the other two located in Japan and Australia.

AOL's earliest dial-up venture in Chinese, a Hong Kong-based pay service with Chinadotcom Corp (NasdaqNM:CHINA - News), lasted about two years before being shuttered in June 2001.