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Contents

CHAPTER 1 1 INTRODUCTION 1 1.1 BACKGROUND 1 1.2 PROBLEM STATEMENT 2 1.3 RESEARCH OBJECTIVES 2 1.4 RESEARCH METHODOLOGY 3 1.5 ASSUMPTIONS 3 CHAPTER 2 5 LITERATURE REVIEW 5

2.1 CHINA INTERNET MARKET 5

2.1.1 China Internet Trends 5

2.1.2 Main Investment Sector in China Internet Market 8

2.2 MARKET ENTRY STRATEGY 13

2.3 MARKET ENTRY MODES 14

2.4 RESTRICTIONS OF FOREIGN INVESTMENT IN CHINA INTERNET INDUSTRY (MII2004) 17

2.5 SUMMARY 18 CHAPTER 3 19 RESEARCH METHODOLOGY 19 3.1 RESEARCH PURPOSE 19 3.2 RESEARCH APPROACH 20 3.3 RESEARCH PROCESS 20

3.3.1 Task1: Define and Restrict Entry Modes 22

3.3.2 Task2: Compare Entry Modes 22

3.4 RESEARCH STRATEGY 22

3.5 DATA COLLECTION 23

3.6 SAMPLE SELECTION 24

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ii Contents

CHAPTER 4 25

EMPIRICAL DATA 25

4.1 CASE 1– EBAY INC.(NASDAQ:EBAY) 25

4.1.1 Company Profile 25

4.1.2 Selection of Entry Mode 26

4.1.3 Performance Measures 27

4.1.4 Reselection of Entry Mode 28

4.2 CASE 2–GOOGLE INC.(NASDAQ:GOOG) 28

4.2.1 Company Profile 28

4.2.2 Selection of Entry Mode 29

4.2.3 Performance Measures 30

4.3 CASE 3–BLIZZARD ENTERTAINMENT 31

4.3.1 Company Profile 31

4.3.2 Selection of Entry Mode 32

4.3.3 Performance Measures 32

CHAPTER 5 34

DATA ANALYSIS 34

5.1 MAJOR BARRIERS OF INVESTMENT IN CHINA INTERNET INDUSTRY 34

5.1.1 Legal Barrier 34

5.1.2 Economic Barrier 36

5.1.3 Social Barrier 37

5.1.4 Cultural Barrier 38

5.1.5 Internal Barrier 39

5.2 REASONS OF MARKET ENTRY MODES CHOICES IN CASE STUDIES 40

5.2.1 Case 1 – eBay 40

5.2.2 Case 2 – Google 45

5.2.3 Case 3 – Blizzard 48

5.3 BE2–OPINIONS FROM FUTURE PLAYER 50

5.4 THE9–OPINIONS FROM LOCAL PARTNER 53

5.5 ACOMPARISON OF MARKET ENTRY MODES IN CHINA INTERNET INDUSTRY 55

CHAPTER 6 60

CONCLUSIONS 60

6.1 SUMMARY OF THE RESEARCH 60

6.1.1 Definition and Restriction of Market Entry Modes in China Internet Industry 61 6.1.2 Major Barriers of Market Entry in China Internet Industry 61 6.1.3 Comparison of Market Entry Modes in China Internet Industry 62

6.2 LIMITATIONS OF THE RESEARCH 63

6.3 FUTURE RESEARCH 63

LIST OF TABLES

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iii Contents

BIBLIOGRAPHY GLOSSARY APPENDIX

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