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On July 23, 2008, Jack Ma, founder, board chairman, and CEO of Alibaba Group, as well as board chairman of Alibaba.com Ltd. (SEHK: 1688), sent an inner email to all the employees, calling on them to be prepared for upcoming severe winter of the Internet market, due to the world's macroeconomic recession.
However, the IT industry is not that depressive as Jack Ma has predicted. Recently, four large Chinese portals SINA Corporation (Nasdaq: SINA), Sohu.com Inc. (Nasdaq: SOHU), Tencent Holdings Limited (SEHK: 0700), and NetEase.com released their second-quarter financial reports in succession.
Their advertising revenues reached USD 64.9 million, USD 43.4 million, USD 32.5 million, USD 15.2 million respectively in the period. Boosted by Beijing 2008 Olympic Games, SINA's advertising revenues amounted to USD 113 million in the first half of 2008. SINA President and CEO Charles Chao believes the company is able to ride out the trough.
Advertisers choose to release online advertisements on portals at high expenses, because they think a lot of the latter's large traffics, and forceful influence, particularly, during the Olympic Games.
Alibaba is greatly affected by macroeconomic environment, because it relies on SMEs (Small and Medium Enterprises) as customers, while online gaming is not so closely connected with outer circumstance. So it may be a good choice for Alibaba to dip toe in the new market.
Not only Alibaba is brewing foraying into the online gaming field. China Yahoo is reportedly contacting with a large Chinese online game operator. It even participated in the 6th China Digital Entertainment Expo & Conference (ChinaJoy) held from July 17 to 19 at the Shanghai New International Expo Center, hoping to pick up with as many as friends in the strange realm.
Insiders point out that it is not surprising that China Yahoo is coveting big profits in the online gaming industry, when SINA and Sohu.com are earning good money from affiliated online game businesses.
Actually, the former parent of China Yahoo, Yahoo Inc. (Nasdaq: YHOO), has begun its online game business long ago. In July, Yahoo Games promoted downloadable online games bundled with advertisements, in which IGA (In-game Advertising) providers Double Fusion and NeoEdge Networks post video advertisements. The online game portal plans to launch more than 400 similar games by the end of 2008.
(USD 1 = CNY 6.89)
From www.nbd.com.cn, Page 1, Friday, August 15, 2008 info@SinoCast.com
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