CReATION: Tom.com HKdollars 148.5m ad, promotion spend fuels company losses

<p>Troubled Tom.com reported HKdollars 163 million in losses in the </p><p>three months to September 30 after spending HKdollars 148.5 million on </p><p>advertising, promotion and Web design. </p><p><BR><BR> </p><p>The company had sacked more than a quarter of its Hong Kong workforce in </p><p>July, while its subsidiary iTravel cut back 83 per cent of its total </p><p>staff at the company's Hong Kong office in September. </p><p><BR><BR> </p><p>Tom.com chief executive Mr Richard Li said the group expected its </p><p>monthly burn rate to fall by 30 per cent by the end of this year, with </p><p>operational costs to be cut from HKdollars 15.3 million to HKdollars 6.3 </p><p>million. </p><p><BR><BR> </p><p>He also did not rule out the possibility of more lay-offs. </p><p><BR><BR> </p><p>During the three-month period to March, the company had spent HKdollars </p><p>28.4 million on advertising and promotion. </p><p><BR><BR> </p><p>That figure was raised to HKdollars 45.8 million from April to June. </p><p><BR><BR> </p><p>For the three-month period to September this year, the company spent </p><p>more than HKdollars 31 million on advertising and promotion. </p><p><BR><BR> </p><p>According to Tom.com, its total number of advertisers has reached </p><p>100. </p><p><BR><BR> </p><p>Other Hong Kong-based dotcoms also continued to report losses for the </p><p>third quarter of this year. </p><p><BR><BR> </p><p>Portal Chindotcom's losses widened by almost 41 per cent in the third </p><p>quarter to USdollars 20.53 million. </p><p><BR><BR> </p><p>Netease.com had earlier posted a loss of USdollars 5.02 million in the </p><p>third quarter, while rival Sohu.com announced a net loss of USdollars </p><p>4.3 million. </p><p><BR><BR> </p><p>Sina.com also reported third-quarter losses at USdollars 6 million. </p><p><BR><BR> </p><p>Tom.com had earlier announced it would acquire more than 49 per cent of </p><p>Kunming Fench Star Information Industry, a China-based outdoor media and </p><p>advertising company. </p><p><BR><BR> </p><p>The acquisition followed a string of other recent investments by </p><p>Tom.com, which include 163.net, YC Press and Shawei.com. </p><p><BR><BR> </p><p>Meanwhile, Tom.com's page views during the third quarter of this year </p><p>hit 26 million, a five-fold increase according to the company. </p><p><BR><BR> </p><p>About 50 per cent of the page view reportedly came from internal growth, </p><p>while the remaining half was generated from recent mergers and </p><p>acquisitions. </p><p><BR><BR> </p><p>Tom.com also said it was looking to generate advertising revenue through </p><p>a joint venture announced in November with Great Wall Computer Software </p><p>and Systems (GWSS) and Great Wall Broadband Network Services (GWBN), </p><p>which is to provide quality software and information services to </p><p>broadband users in mainland China. </p><p><BR><BR> </p><p>The company said revenue was to be generated from advertising, </p><p>subscription, ecommerce and product sales. </p><p><BR><BR> </p><p>It outlined plans to develop home-user services such as property </p><p>management; video-on-demand; real-time news and stock market updates; </p><p>online games; payment services, and online shopping. </p><p><BR><BR> </p><p>General manager of GWBN Yang Yu Hang said: "Looking forward, with the </p><p>Great Wall's broadband network as the backbone, the JV company will </p><p>exploit the broadcasting as well as the telecommunications broadband </p><p>network value-added service market. It will also set up a nationwide </p><p>sales network using residential property management companies as </p><p>distribution channels." </p><p><BR><BR> </p>