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Rumor: Web Directory Revenues to Drop in 2012

DoNews, 1/01/12

An industry source has said that web directory sites will likely see revenues decline in 2012 as competition lessens between China's e-commerce sites, particularly small and medium-sized group buy sites and B2C malls, and ad spend for directory listings decreases.

Due to the expiration of a number of advertising contracts, Baidu's (Nasdaq: BIDU) online web directory subsidiary, Hao123, unveiled major changes to its homepage on January 1, 2012, with the removal of approximately 15 advertisers and the addition of five new ones. Those removed include online classifieds sites Baixing and Ganji, online community operator Tianya, B2C e-commerce site Dangdang (NYSE: DANG), online ratings and group buy site Dianping, B2C online shoe retailer Letao, and group buy sites 55Tuan, 24Quan, Meituan and Didatuan, bringing the number of recommended sites featured in the top section of Hao123's homepage from 42 down to 36.

Prior to this, media reported that entry costs for web directory platforms have risen by several hundred percent over the past few years, a situation about which sites including Dangdang and automobile website Autohome have expressed discontent.

Editor's Note: For more information on this topic, please see "Rumor: Chinese Directory Site Ad Prices Skyrocket," MD 4/18/11 and "Dangdang to Resume Advertising on Baidu," MD 6/30/11 issues.

Keywords: online advertising e-commerce Internet B2C Baidu Hao123 online web directory BIDU group buying

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