MEDIA-I: DAC investment bails out BMCMedia

<p>SYDNEY: Japanese internet advertising company Digital Advertising </p><p>Consortium (DAC) is pouring A$500,000 (US$259,310) in </p><p>Australia's BMCMedia, which has reduced regional operations. </p><p><BR><BR> </p><p>The Australian online advertising company had earlier closed its </p><p>Singapore and Beijing offices and downsized its Hong Kong operations as </p><p>part of a broader cost-cutting measure. In all, it cut 36 positions </p><p>globally. </p><p><BR><BR> </p><p>The workforce in Hong Kong has gone from 10 to two, while the Singapore </p><p>and Beijing offices have about five staff each after the </p><p>redundancies. </p><p><BR><BR> </p><p>The two companies had partnered earlier this year, allowing BMC Media to </p><p>handle Australian online advertising for DAC's Japanese clients and its </p><p>clients' online marketing into Japan. </p><p><BR><BR> </p><p>DAC is owned by a consortium of Japanese advertising agencies, which </p><p>include Nikkeisha, Daiko Advertising, Hakuhodo, Asatsu-DK, I&S/BBDO and </p><p>Yomiko Advertising. </p><p><BR><BR> </p><p>BMC Media had also made cut backs in Australia but the Tokyo operation </p><p>has been spared because it recently signed a lucrative contract with </p><p>local agencies, including Hakuhodo, for online marketing. </p><p><BR><BR> </p><p>The Australian-based firm, which competes against DoubleClick, made the </p><p>cutbacks to reduce its cash burn rate and preserve cash reserves of </p><p>A$7.4 million (US$3.6 million). </p><p><BR><BR> </p><p>The firm plans to use the money to acquire businesses that are </p><p>profitable or close to breaking even on cash flow. </p><p><BR><BR> </p><p>BMC Media also wants to take on tasks - database management and some </p><p>email marketing work - which it previously outsourced. </p><p><BR><BR> </p><p>The company is keen to drive further consolidation in the online ad </p><p>market by acquiring competitors. The number of online ad companies has </p><p>dropped dramatically this year, with Real Media and DoubleClick </p><p>withdrawing from Australia and Engage quitting its Asian operations. </p><p><BR><BR> </p>