1100969--3/14/2007--ASIAINFO_HOLDINGS

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Certain Risks That May Affect Our Operating Results and Our Common Stock The growth of our business is dependent on government telecommunications infrastructure and budgetary policies, particularly the allocation of funds to sustain the growth of the telecommunications industry in China. Our customer base is concentrated and the loss of one or more of our customers could cause our business to suffer significantly. Our acquisition of Lenovo s IT services business and any future acquisitions or investments may expose us to potential risks and have an adverse effect on our ability to manage our business. The long and variable sales cycles for our products and services can cause our revenues and operating results to vary significantly from period to period and may adversely affect the trading price of our common stock. Our working capital requirements may increase significantly. We have sustained losses in prior years and may incur slower earnings growth, earnings declines or net losses in the future. Our high level of fixed costs, as well as increased competition in the software market, could result in reduced operating margins. Our contractual arrangements with Lenovo Computer, Lenovo Security and Star VATS may not be as effective in providing operational control as direct ownership of these affiliated entities and may be difficult to enforce. We may not be able to operate the systems integration businesses involving state secrets if we acquire all of the equity interest in Lenovo Computer and Lenovo Security. PRC regulations relating to acquisitions of PRC companies by foreign entities may limit our ability to acquire PRC companies and adversely affect the implementation of our acquisition strategy, and the failure by our shareholders who are PRC residents to make or obtain any required registrations pursuant to such regulations may subject us to legal sanctions. Asset impairment reviews may result in future periodic write-downs. We are highly dependent on our executive officers. We face a competitive labor market in China for skilled personnel and therefore are highly dependent on the skills and services of our existing key skilled personnel and our ability to hire additional skilled employees. We extend warranties to our customers that expose us to potential liabilities. We sell our services on a fixed-price, fixed-time basis, which exposes us to risks associated with cost overruns and delays. We may become less competitive if we are unable to develop or acquire new products, or enhancements to our existing products, that are marketable on a timely and cost-effective basis. Our proprietary rights may be inadequately protected and there is a risk of poor enforcement of intellectual property rights in China. We are exposed to certain business and litigation risks with respect to technology rights held by third parties. Investors may not be able to enforce judgments entered by United States courts against certain of our officers and directors. We do not intend to pay and may be restricted from paying dividends on our common stock. The fact that our business is conducted in both U.S. dollars and Renminbi may subject us to currency exchange rate risk due to fluctuations in the exchange rate between those two currencies. The markets in which we sell our services and products are competitive and we may not be able to compete effectively. Political and economic policies of the Chinese government could affect our industry in general and our competitive position in particular. High technology and emerging market shares have historically experienced extreme volatility and may subject you to losses. If our stock price is volatile, we may become subject to securities litigation, which is expensive and could result in a diversion of resources. Future sales of shares by existing stockholders could cause the market price of our common stock to fall. We are subject to anti-takeover provisions that could prevent a change of control and prevent our stockholders from realizing a premium on their common stock. Our change of control severance agreements with executive officers may discourage a change of control. We are subject to potential liabilities and anticipate recurring costs in complying with the Sarbanes-Oxley Act. We are exposed to certain tax risks with respect to tax benefits enjoyed by certain of our subsidiaries.

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1100969--3/14/2007--ASIAINFO_HOLDINGS_INC