Message to Shareholders

Year 2007 Letter to Shareholders

Dear Shareholders,

PChome Online generated NT$6.70 billion in 2007, representing a 9.7% year-on-year growth. Net profit after tax has concluded a loss of NT$137 Mn, representing NT$62.6 Mn improvement compared with year 2006.

The operating performance of PChome Group in 2007 are summaried as followed:

1) Operating profit turns positive
We set up a very crucial target to make operating profist become positive and we did it in the second half of 2007. As the operating profits turned positive, operating cash flow becomes positive as well. Emerging from a continuous loss in the last two years, we believe we already bounce back from the bottom in 2007 and we will be able to see some results in 2008 from our past investments.

2) 24-hr Delivery Service made a hit
Our B2C online shopping launched 24-hr delivery service in 2007 to differentiate ourselves from peer competitors. Fortunately, it generated great response from our customers. Total sales skyrocketed to NT$100 Mn in October 2007 within one year from this initiation, and has rapidly grown to NT$200 Mn in January 2008. This service has explored the niche market and made us as the front runner in the business.

3) PChome Store has been in the right track after two-year endeavor
With more than 4,000 online stores, PChome Store is now the biggest online store platform in Taiwan. As Rakuten, the largest one in Japan, entered Taiwan market in 2007, online-store business will be further expanded as a result of intensifying stimulation from new player. We believe year 2008 will be very fruitful and rewarding for PChome Store.

4) PChome-eBay“Ruten”shows strong growth
Ruten, the auction platform which we established with a joint venture with eBay, reached the milestone of 7 million live listings in 2007 after one-year operation. The fast growth of Ruten dwarfed all the other competitors in online auction market. The future of Ruten is expected to be promising with growing transaction size.

Looking forward to the prospect of 2008, we will focus on achieveing a more profitable growth, and will spin off some business units for IPO. We are seeing this as good opportunities as Taiwan market can definitely support more listed internet companies.

Sincerely yours,

Jan Hung Tze
Chairman

Lee, Arthur
CEO