Woz - 12:07 am on Jan 22, 2003 (gmt 0)

We have heard about the use of Mobile Phone in Japan from Bill, and it seems China has been doing the same thing. Perhaps they read Bill's threads here ...

A report from Silicon Valley .com [siliconvalley.com] states "After years of losses, China's three biggest Internet portals are making a sharp turnaround" thanks to "China's love affair with the mobile phone."

The big challenge in China is of course relatively low income and therrefor lower advertising budgets and online sales than in the west. But the Chinese do love their phones and do love sending messages. I remember after a teaching session a couple of years ago one young pupil becoming very happy when she switched her phone back on to find no less than 27 SMS messages sent by her friends in one hour.

The trick has been how to marry the two technologies and profit from that. "But the turning point came when China Mobile, (China's) biggest mobile-phone company, introduced a system last year called micropayment that lets portals share in revenues for wireless Internet access."

"These guys are getting fat off the crumbs off China Mobile's table," said Steven Schwankert, an industry expert in Beijing.

The result have been that the Top three portals, Sohu, Sina and Netease, have all posted profits largely based on this new system. The article has more information about profit postings etc.

Taking the success a little further, according to a China Daily [www1.chinadaily.com.cn] report, "Sina.com planned to acquire MeMeStar, a mobile phone service provider based in Guangzhou, for US$20.8 million, in a move expected to double Sina.com's wireless services revenues." This will enlarge their revenue base and also the Advertising Sales & Marketing base as well.

It seems that diversification is the key to staying afloat in China as "Internet advertising sales have dissipated."

A further report dfrom Reuters [reuters.com] talks about Sohu.com, "once written off as another flamed-out Internet portal" making a phoenix-like rise "thanks to the chatter of hip young mobile phone users". The result has been a "lift (in the) the stock (of) 800 percent in six months." The article has detailed figures for the three protals mentioned above.

Interesting food for thought.

Onya
Woz