CREATION: Hongkong.com to boost ad revenue by moving away from new economy

Hongkong.com is to raise advertising revenue by repositioning the company from a dotcom to an old economy business through acquisitions of traditional media corporations worldwide. Mr Rudy Chan, chief executive officer of hongkong.com, told CReATION the company would seek to acquire brick and mortar businesses, which would allow it to offer a cross platform channel to advertisers. He said the decision to acquire Miller Freeman Asia's travel and tourism print publications was based on this new formation. Mr Chan said: "We are essentially looking to fulfill customer demand. It has now become important to link online and offline businesses. More and more of our advertisers are asking for cross platform advertising. It is more effective. In five to 10 years there won't be any such thing as an Internet company because what we'll see is a combination (of business models) ... And we have to move quickly because the market is not so kind anymore." He said hongkong.com, which has US$500 million in cash, expected further acquisitions to be announced in the near future, but declined to give details. He also forecast an increase in ecommerce revenue from less than 10 per cent to 30 per cent following potential acquisitions of traditional businesses in the next three years. He said hongkong.com's next goal would be to establish and retain a wider user base on the Web through online promotions and advertising. He further noted advertising would have to evolve to comprise media from the old and new economy for effective marketing campaigns. "There is some misconception at the moment about the online advertising industry. As it was mostly driven by the dotcoms, which are now in trouble, it has an impact on the overall ad spending ... At the moment all ad dollars are going to the big portals. These aren't going to close down and this is where people are doing most of the advertising so I think the future of the industry will be strong," he said. Findings from the Nielsen//NetRatings BannerTrack service ranked hongkong.com as the second leading online advertiser in Hong Kong after Next Media Interactive. Banner ads on the site, which has a user base of 1.2 million, achieved more than 37.7 million impressions in September, with a unique audience number of 420,016.

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