The city's largest property and shipping business, Cheung Kong (Holdings) Ltd., and biggest bank, HSBC Holdings PLC, said they formed a venture aimed at helping their customers trade goods and services over the Internet.

The deal is widely seen as evidence that Hong Kongs's biggest blue-chip companies are expanding into the electronic commerce.  But analysts said a hazy business strategy and a ponderous Internet domain name means the venture is emblematic of little more that Hong Kong's Internet frenzy.

Existing Customers Only

The new venture iBusinessCorporation.com, includes the two parent companies' biggest unites, Hutchison Whampoa Ltd. and Hang Seng Bank Ltd.  The four companies said they plant to make an initial investment of HK$3 billion (US$385.7 million) and take advantage of their existing resources to make iBusinessCorporation.com a dominant service provider.

The venture brings together Hong Kong's dominant bank, with its long list of business clients, and a mammoth conglomerate.  In addition to being the city's largest port operation, Cheung Kong owns two major supermarket chains, the biggest drugstore retailer, an electronics store chain, and mobile and fixed-line telephone companies.

According to the Web site, services will include wholesaling, retailing and possibly insurance, but no traditional financial services.  And the venture will target only the four companies' existing customers.

"It's all pretty conceptual," said Anthony Lok, a bank analyst with Nomura International (HK) Ltd.  "The synergies are relatively extensive, and the banks could bring in new customers, but doing business on the Internet means these companies would put pressure on their own pricing and margins.  It looks like they're trying to be e-savvy, but not in areas where their core businesses could get hurt.

Cheung Kong is one of dozens of Hong Kong companies that have diversified their portfolios and embraced the Internet amid the decline of the city's once-lucrative property market.  Cheung Kong and Hutchinson jointly own Tom.com, and Internet content provider.

Cheung Kong and Hutchinson will jointly own about 75% of the new venture, while HSBC's Hong Kong division and Hang Seng Bank will take the remaining 25%.  Cheung Kong and Hutchison will split their ownership 65% and 35%, respectively.  HSBC will hold 80% of its share directly and Hang Seng Bank will hold 20%.  The companies said a stock-market listing of the venture is "a possible route to take," but didn't elaborate.

Convince Shareholders

The Internet business and iBusinessCorporation.com 's portals are scheduled for launch in the coming months.

Meanwhile, Naseem Javed, president of ABC Namebank International, an Internet consulting firm in New York, said he worries iBusinessCorporation.com is a feeble attempt to convince shareholders that the parent companies are serious about e-commerce.

"Putting an 'I' in front of such a terribly cumbersome domain name isn't a very thoughtful approach," said Mr. Javed, the author of two books on the Internet.  "Lots of companies are doing the same thing, trying to impress their shareholders, but they don't really know what they're getting into.

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