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.

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