First Look at the Portals

Trying to come to grips with the all-important topic of Chinese portal brands and their strategies. I’m still crunching the available numbers and details, but here are some first observations:

Reading the 3rd quarter financial reports of the big players, one thing that becomes obvious is the overwhelming importance of (meaning also: dependence upon) a still tremendously growing advertising market. Car Industry, IT, and Finance are the most important customers.

QQ, Sina and Sohu have very popular blog services, providing roughly between 10 and 20 percent of their web traffic. But the business models are still unclear. QQ monetizes on its service by selling virtual items for blog decoration. Sina is doing some experiments with context ad revenue sharing, but is still in very early stages with some celebrity weblogs as playing ground.

Sohu’s most significant recent success is in the gaming sector, driving their gaming revenues up by several hundred percent. They’ve been following QQ’s success in online gaming with Tian Long Ba Bu 天龙八部, an inhouse-developed 3-D online game based on a popular novel and CCTV series. It earned them more than 10 million US-Dollars since its launch in May.

No report yet about the outcome of the new Sohu 3.0 blogging environment, launched on the day of my last arrival in Beijing in late July. (I’ve seen Sohu CEO Charles Zhang raise the Sohu 3.0 flag.)

The portals seem to be still suffering from the loss of one of their most important former cash-cows: mobile ‘value-added’ services. The pains are due to changed government policies in the last year and more competition from the mobile providers themselves.

1 Comment

  1. Good notes. Another point that needs to be noticed: the percentage growth of the ad revenue of sina and sohu are more or less the same, while sina hasn’t launched any “3.0 blahblahblah”. That’ shows how important editorial board still is to a content provider.

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