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Ad Revenue of Top 4 Portals Surpasses USD 100 mln

China Securities Journal, 11/23/07

In Q3 2007, total advertising revenues from China's top four portals, Sina, Netease, Tencent (0700.HK) and Sohu, broke though the USD 100 mln mark for the first time, reaching a total value of USD 108 mln.

The advertising revenues for Sina, Netease, Tencent and Sohu were USD 45.8 mln, USD 11.4 mln, USD 19.3 mln and USD 31.5 mln, respectively. With the exception of Netease, the other three portals all showed strong upward growth trends.

Using advertising as its base, Sina's multiple co-existing profit models have made its strategic position increasingly sound, with its advertising revenues continuing to pull away from those of its competitors. In 2005, Sina led its closest competitor by USD 6.3 mln, but by the end of the third-quarter this year, this gap had increased to USD 14.3 mln.

Sohu's advertising for the quarter increased by 42%, and board chairman Zhang Chaoyang stated that expenses incurred prior to the last three quarters in becoming the exclusive Internet content provider for the Olympic Games had completely been recovered.

For Tencent, its large installed user base is not only a great weapon in the fight for the advertising market, but it is also generates users for many of its other paid services.

Operating revenue for Netease saw negative growth due to the fact that many of its products were showing signs of age, and revenues from its new products had not yet materialized. However advertising revenues for this quarter were up 32% from last quarter, with its mature online gaming community and email user base playing an important role in the competition for advertising.

Keywords: Q3 2007 Netease NTES Tencent 0700.HK Sohu Sina Internet online advertising Internet Olympics

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