To begin with, Asia Online (India) Pvt Ltd has taken a 67 per cent stake in Hyderabad-based Web development services firm India Domain Web Services for Rs 2.25 crore two weeks ago. According to its managing director Sunil Varma, the involvement could go up depending on the growth in business.India Domain offers Web design and development, e-commerce capabilities and Net consultancy for small and medium enterprises.

The acquisition is first in the series planned by the $143-million Asia Online in India. Asia Online (India) was set up with an initial capital of Rs 5 crore. It is already considering an entry into the Internet access market and could either apply for an Internet Service Provider (ISP) licence, or takeover an existing ISP, with SMEs as the target as against the retail consumer market.

``We want to be present in design, hosting, support and delivery services with a clear focus on SMEs. With that aim in mind, we will also look at taking stakes in small applications or products companies such as supply chain management and customer relationship management,'' said Varma.

In fact, Asia Online is planning to roll out ASP services for SMEs separately at a later stage for which additional investment would be made, Varma said.

The company, which is already present in 11 countries, has its Asia-Pacific base in Hong Kong where it has carved a large presence and made four acquisitions worth nearly $20 million. In Australia, it has made a dozen acquisitions worth a similar amount, according to Varma.

Asia Online has a strategic alliance with eCentric Inc of USA to market its unified messaging product ec-mail (fax-based mail system) in the Asia-Pacific, including India, in the coming months.Interestingly, Asia Online is set for a $100 million initial public offering and has applied to the Securities Exchanges Commission (SEC) earlier this month for permission to list on the Nasdaq. As an advisor, Boston Consulting Group (BCG) is helping it chalk out future plans which includes a presence in Taiwan and other regional markets.

The list of investors in Asia Online include Softbank Technology Ventures which holds about a 30 per cent stake, and JP Morgan International Capital and GE Capital Finance which hold close to 10 per cent each. Others like ABM Amro, Pariba, Pequot Capital Management, Nexus Capital Partners, Interliant and Concentric comprise the remainder equity.

The company was incorporated as Conrad ISP in Delaware, USA in late 1998. In early 1999, it had acquired the operations and the identity of four-year-old Hong Kong-based Asia Online.