Focus Media to get Net ad firm
By Wang Xing (China Daily)Updated: 2007-03-02 09:43
Wang Ran, CEO of China eCapital Corporation, said Focus Media's aggressive acquisitions stem from the company's increasing concern over its over-reliance on a single revenue source.
Focus Media's latest report, released on Monday, said commercial locations contributed 63 percent of the company's revenue in 2006 while revenue from in-store network, in-elevator and cellphone advertising accounted for 12.7 percent, 19.1 and 4.6 percent respectively.
"Focus Media has to go beyond its reliance on 'outdoor electronic billboards'," said Wang. "Focus's other revenue generators would not be able to sustain the huge company if one day the growth of China's outdoor advertising market slows down."
Although many applauded the high-profile deal between Focus Media and Allyes, the acquisition smashed Allyes's earlier efforts to seek an independent initial public offering in NASDAQ.
Experts believe the sluggish performance of Double Click in NASDAQ, with a similar business model as Allyes, and the robust performance of Focus Media triggered the deal.
Apart from the two parties, another beneficiary of the deal is venture capital company IDG VC, which is the major investor for both Focus Media and Allyes.
It was reported earlier that IDG earned $65 million from Allyes's deal with Focus Media, 40 times of what it had invested in Allyes.
(China Daily 03/02/2007 page14)
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