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Google Ad Agencies: January Ad Spend Down 30% YoY

China Business News, 1/29/10

An authorized Google China advertising agent has reported that new ad placements are showing a clear downward trend, conservatively estimating a drop in new orders of approximately 30% YoY.

The source said that Google China told authorized ad resellers during a meeting in Shanghai on January 25 that negotiations are ongoing with the Chinese government regarding content. The worst case scenario, according to the agent, is that Google.cn and Google's China R&D operations are shut down, but the company will be able to remain in China. At the meeting, some agents claimed that new orders for January were down approximately 50% YoY.

An industry insider familiar with Google China's channel business pointed out that the company's ad agencies in China primarily handle small and medium-sized companies, which place ads through Google by pre-paying between thousands of RMB to tens of thousands of RMB, and do not make any new deposits until their credit is depleted. The source expected that, considering the number of existing clients who may not renew their orders in addition to a drop in orders from new clients, Google should see its sales drop by 30% to 40% YoY.

An authorized Google China ad reseller in South China said that so far, clients do not appear to have migrated to Baidu (Nasdaq: BIDU).

Keywords: online advertising online search Internet Baidu Google BIDU

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