CREATION: Portals search new ideas as advertising dollars dwindle

<p>As the harsh reality of the Internet takes a toll on dotcoms around </p><p>the world, portals anticipating a decline in online advertising dollars </p><p>are looking for new ideas to check falling revenues, according to the </p><p>IDC. </p><p><BR><BR> </p><p>Internet companies, such as Yahoo, that rely heavily on advertising are </p><p>expected to suffer first, a report by the IDC said. </p><p><BR><BR> </p><p>"With fewer dotcoms flush with dollars, spending for online ads could </p><p>diminish, casting doubts on the ability of stellar performers such as </p><p>Yahoo to uphold their revenue," the report added, "On the other hand, </p><p>Yahoo may be benefiting from reduced competition among providers of ad </p><p>space. Its revenue for the September quarter grew to USdollars 295.5 </p><p>million from USdollars 270.12 million in the June quarter." </p><p><BR><BR> </p><p>However, during November, shares of the Internet portal fell to their </p><p>lowest level in two years on concerns over a weaker Internet advertising </p><p>market. </p><p><BR><BR> </p><p>The difficulty of the online ad market, analysts have warned, also means </p><p>Yahoo is likely to miss its revenue targets in coming quarters. </p><p><BR><BR> </p><p>In light of this, the portal is looking to generate revenue from other </p><p>channels, such as from visitors to its site. </p><p><BR><BR> </p><p>"Watch for Yahoo to embrace the broadband world and ratchet up its </p><p>activity as a component of corporate intranet portals. Yahoo is also </p><p>actively expanding in Asia and growing its list of merchants on its </p><p>shopping portal. </p><p><BR><BR> </p><p>"As caution creeps into the dotcom world, the hope is that the best and </p><p>brightest will survive and thrive. Some will face challenges from the </p><p>brick and mortar companies attempting to add another channel, while </p><p>others will combine forces with appropriate brick and mortar </p><p>counterparts," the report said. </p><p><BR><BR> </p><p>Other portals are also following the likes of Yahoo. </p><p><BR><BR> </p><p>Hotmail introduced traditional Chinese, simplified Chinese and Korean </p><p>languages to its email service with the aim of attracting an additional </p><p>37 million regional users at the rate of 10 million each year. </p><p><BR><BR> </p><p>To draw more users to its localised service, Microsoft's MSN also </p><p>launched a series of Hotmail marketing programmes in Hong Kong and </p><p>Taiwan, and an upgrade to its service to version 3.5. </p><p><BR><BR> </p><p>Other overseas-based portals are also looking to expand their presence </p><p>in Asia as the number of Internet users in regional countries soars. </p><p><BR><BR> </p><p>Lycos Asia is to set up a subsidiary in Thailand to further its Asian </p><p>presence. The subsidiary is to operate a Thai-language site, which will </p><p>be launched at the end of November. </p><p><BR><BR> </p><p>Chinese Web portal Sohu.com had also attributed weaker-than-expected </p><p>quarterly revenues to a sluggish online advertising market. It said it </p><p>was training its sales force "to be more effective". </p><p><BR><BR> </p><p>The company's CEO Charles Zhang had said he expected the online ad </p><p>market to gain momentum as more Chinese companies warmed to the </p><p>concept. </p><p><BR><BR> </p><p>In the meantime, Mr Zhang said Sohu.com would increase its slice of the </p><p>pie by promoting itself as host to "more Web traffic than any other </p><p>company in China" - a claim that has been given credence by its </p><p>acquisition of portal ChinaRen in October. Of the three rivals Sina.com, </p><p>Netease.com and Sohu.com, the latter has had the greatest success at </p><p>raising ad revenues because, according to anlaysts, it had moved quicker </p><p>than the others to adopt an aggressive ad sales strategy. </p><p><BR><BR> </p><p>Meanwhile, a Merrill Lynch analyst reportedly described the Internet </p><p>advertising environment as "horrible", while Gartner has predicted 85 </p><p>per cent of Asian dotcoms will go bankrupt or be swallowed by bigger </p><p>Internet companies or more traditional and stable companies by 2004. </p><p><BR><BR> </p>