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My letters column

late last month drew a response from

Anthony Houlahan

, who was "surprised that

I neglected to mention

Chinadotcom

(CHINA)

." Houlahan is especially curious about the portals Chinadotcom operates --

china.com

,

taiwan.com

and

hongkong.com

.

I didn't mention the company because my story focused on the top Chinese Internet portals, and Chinadotcom's flagship site, china.com, is now ranked ninth. Still, that does not mean the company is not an interesting story. When it went public a year ago it was solely a Chinese Internet portal, operating those three sites. In fact, it was the first Chinese Internet company to go public. Since then, other sites have overtaken those portals in popularity as Chinadotcom has evolved into more of a pan-regional Internet company.

In addition to its portals, the company now engages in three other businesses. It operates a Web consultancy, helping, for example, companies establish sites in Asia. It also sells online advertising and, finally, it invests in other Internet businesses, serving as a kind of venture-capital house. Last week, the company posted better-then-expected revenue growth for the second quarter and announced that hongkong.com had turned a profit. The company as a whole expects to become profitable by the end of next year and in the meantime has more than $500 million in cash. I recommend checking out

TheStreet Recommends

this story from June for more information on the company.

Depending on when you got in, an investment in Chinadotcom could have turned out well. The stock has split twice since its IPO, and adjusted for the split the stock has gained roughly 46% in value since its debut in July 1999. This year, however, the stock is down 77% since its peak March. It now trades around 16.

Meanwhile, many investors appear wary. While the company's diversification out of the portal business might make it seem stronger, for some that move away from its core business is a weakness. "It is more risky," says Richard Gao, portfolio manager of the

(MCHFX) - Get Matthews China Investor Report

Matthews Dragon Century China Fund. He has taken a pass on buying company stock.

Others are wary of the Chinese Internet sector as a whole because of concerns about the same sector in the U.S. The two, they say, are inextricably linked.

"Unless you believe the Internet is going to take off in the U.S., there is no reason to buy it," says Eric Ritter, manager of the

(DRAPX)

Driehaus Asia Pacific Growth Fund. "The sentiment is against the Internet," he says. "That's going to affect all the stocks." Right now, Ritter prefers Old Economy Chinese companies, like car manufacturer

Brilliance China

(CBA)

. It may not seem particularly glamorous, but its stock is up 127% this year, adjusted for an April split.

Ritter says he's singling out Chinadotcom, but since the March

Nasdaq Composite Index

correction, his fund has "generally been avoiding all the Asian Internet IPOs."

Yet he is not completely negative. "If somebody is thinking long-term," he says. "Chinadotcom could be one of the winners."

In fact, reader

Zhangong Du

made an interesting point in response to the same column, raising the question of whether there could be more than one winner.

"China's many provinces are like many small countries," he says. "The difference between L.A. and New York is negligible compared to the difference between Beijing and Shanghai or Shanghai and Guangzhou. You feel like you are in different countries

despite the same written language."

"It is therefore unwise to think there would be only one winner," he concludes.

Zhangong may be onto something. But at this point, none of the Chinese Internet plays are looking like winners for the near future.

David Kurapka's Global Portfolio column appears Mondays, Wednesdays and Fridays on TSC. In keeping with TSC's editorial policy, he does not own shares in any companies or mutual funds mentioned in this column. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback and invites you to send it to

David Kurapka.