Shanda to Establish New Advertising Subsidiary
21st Century Business Herald, 10/13/12
Zhu Jing, CTO of Shanda Online and VP of Chinese online media provider and online game developer and operator Shanda Interactive, revealed recently that Shanda had begun preparations to spin off Shanda Advertising (unofficial translation) as a new subsidiary in July 2012. Zhu said Shanda had been in contact with VC funds, and would seek to bring on venture capital funding before ultimately spinning the advertising subsidiary off as an independent listed company.
Like Shanda's payment tool Shengfutong and cloud computing platform Grand Cloud, Shanda Advertising is a division of Shanda's online game payment and service platform Shanda Online (SDO). Both Shengfutong and Grand Cloud have already been spun off from their parent company.
Under Shanda founder and CEO Chen Tianqiao's "small group, large companies" strategy, Shanda's assets have been reorganized into structure with "three horizontals" (games, online literature, and video) for content and "three verticals" (online payment, cloud computing, and advertising) for tools.
In 2007, Shanda acquired Shanghai-based Shengyue Advertisement, whose platform allowed Shanda to move into the Chinese in-game advertising market, but the past several years have seen major changes to the service. Shanda decided to spin Shanda Advertising off in September 2011, Zhu said, noting that while Shengyue Advertising had previously used a traditional offline advertising model, Shanda Advertising has evolved into a CPC results-based advertising platform similar to Google's AdSense.
Before joining Shanda, Zhu Jing worked as a senior director at Yahoo!'s US company, overseeing global technology development for Yahoo! Mail and later global technology development for the company's precision-targeted advertising product.
At present, Zhu said, Shanda Advertising employs more than 200 people in the areas of product development, operations, and technology. As of the end of June 2012, the platform served an average of 1.2 bln ad impressions per day to 300 mln internet users. The platform has exclusive agreements with Shanda Interactive online video subsidiary Ku6 (Nasdaq: KUTV) and online literature site Qidian.com.
Zhu also revealed that Shanda plans to add a real-time bidding (RTB) model to its service. Work is underway to connect the Shanda advertising transaction platform to other DSPs, but the service is not yet fully operational.
Keywords: online advertising spin-off Shanda Chen Tianqiao Internet Zhu Jing Shanda Online
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