Sohu IT, 12/18/07
It has recently been rumored that due to long-term sluggish performance, China Mobile (NYSE: CHL; 0941.HK) plans to terminate Fractalist's position as sole advertising agency for the Monternet, instead shifting the position to its own subsidiary, Aspire. Leveraging Olympics-related marketing opportunities, it then hopes to get the Monternet's advertising business back on track.
Fractalist has been the exclusive ad agency for the Monternet for 2 years, however advertising revenues during this time have been well below China Mobile's expectations. Industry insiders believe that Fractalist's lack of experience with sales channels and advertising operations are the root causes behind Fractalist's inability to exploit the Monternet's full advertising value.
In addition, expensive office space and highly paid management have led to a large increase in costs. Fractalist had reportedly been hoping to gain outside investment to help maintain operations, and had attracted interest from Legend Capital. However, Legend Capital recently dropped these plans after performing a detailed assessment of Fractalist's operations.
LENS: To gain a more comprehensive understanding of Fractalist and China's mobile marketing/advertising market, please consider purchasing Marbridge's newly released "2007 Chinese Mobile Advertising Report". Over 195 pages long, the report provides an in-depth overview and analysis of China's mobile advertising industry chain, market size, growth estimates, technology platforms, and business models, and includes profiles of nearly 40 of the industry's top players. For more detailed information on the report, please click here.