MEDIA-I: Axe falls at BMC Media operations

SINGAPORE: BMC Media has closed its Singapore and Beijing offices

and downsized its Hong Kong operations as part of broader cost-cutting

measures that have led to 36 job losses in the company globally.

The workforce in Hong Kong has fallen from around 10 to two, while the

Singapore and Beijing offices each have around five staff. There were

also staff cutbacks in Australia but the Tokyo operation has been spared

because it recently signed a lucrative contract with local agencies,

including Hakuhodo, for online marketing campaigns.

A spokesman for BMC Media said maintaining a presence in Hong Kong was

crucial to the company's progress in China, in particular because

Beijing would be hosting the 2008 Olympics. BMC Media had earlier sold

ad space on websites set up for the Sydney Olympics.

The Australian-based firm, which competes against DoubleClick, made the

cutbacks to reduce its cash burn rate and preserve cash reserves of

A$7.4 million (US$3.6 million). The online ad firm plans

to use this money to acquire businesses that are profitable or close to

cash flow break-even, explained BMC Media chairman, Nick Greiner.

The cost-cutting will reduce monthly overheads by 62 per cent he

said.

Any future acquisitions will aim to reposition BMC Media as a full

service digital marketing firm, Greiner added.

BMC Media also wants to take on tasks - database management and some

email marketing work - which it previously outsourced.

The company is also keen to drive further consolidation in the online ad

market by acquiring competitors. The number of online advertising rep

companies has fallen dramatically this year, with Real Media and

DoubleClick withdrawing from Australia and Engage quitting its Asian

operations. BMC Media's share price has plummeted in recent times from a

high of A$7.60 early last year to A4.5 cents (US2.2 cents) last

week.