Profile... Tom's Yeung seeks clarity from disparate assets

Six months into his job as CEO of Tom Group, Ken Yeung remains an unknown quantity to many in the industry. While he has made the odd comment about Tom’s currently lacklustre stock performance, Yeung’s profile has remained low. He does not give a lot of interviews.

Yet in the flesh he is hardly shy and retiring, displaying a level of self-assurance that stands out even in China’s alpha male-dominated media industry. He is sharp in conversation and exudes confidence in his vision for Tom Group. But is he the man to take the media conglomerate out of its year-long slump?

So far, that goal remains a challenge. The company reported a loss of more than HK$500 million (US$64 million) in mid-2008, which has been attributed to the loss of value-added mobile services in late 2007, following a tightening of mobile spam rules, and to the impact of the Sichuan earthquake on the company’s out-of-home ad business. Fortunately for Tom, it has plenty of other interests, including TV and the Chinese rights to Skype. These are pretty much breaking even, after extensive cost-cutting measures in its internet units. Skype usage has grown, and Tom has announced a tie-up with video downloading site Joost and social network site Stardoll.

Yeung’s ascension to the top position at Tom from his previous role as COO has been uncommonly swift, after joining the company earlier this year, succeeding former CEO Tommei Tong.

Yeung arrived from Horizons Ventures, a private company controlled by Solina Chau, who is also one of the largest shareholders in Tom Group - a track record suggesting that he has the trust of the company’s backers.

With so many disparate interests, can Tom Group be characterised as a jack-of-all-trades but the master of none? “Well, Tom possesses diverse media assets” says Yeung. “With digitalisation we are creating crossover of our content and products from our different assets”.

For Yeung, this heralds an exciting new age in media, in which he believes a diversified media company such as Tom is ideally situated to reap the benefits from the investment poured in by major shareholder Li Ka-Shing since its foundation in 1999. “As content becomes digitised, what’s important is that you both have access to prime content and the media outlets to reach your consumers - and we do,” he says.

Yeung also insists that Chinese consumers are more prepared to accept new media, especially mobile and online - than are their Western counterparts.

This is the subject that really interests the McKinsey alumnus - when talking about history and its relationship with today’s media landscape in China, Yeung stops fiddling with his BlackBerry and leans forward to engage in the conversation. “Traditional media’s strength is content - and new media’s strength is low-cost platforms,” says Yeung. “What we’re trying to do is merge the strengths of the two, using low-cost platforms to reach out with high-quality content.”

So much for the theory. In practice, some in China argue that Tom remains no more than a pick-and-mix selection of businesses. “One of the problems with Tom Group is that you don’t really know what it stands for - and the companies that have been successful in China, such as Baidu, are very clearly specialised,” says an industry source. And for all the talk of sexy businesses such as Joost and Skype, the bulk of Tom’s revenues still come from online media and publishing.

Also, brands such as Joost have been big names in the West but are entering a market in which local players and pirated content abound. Yeung may be confident that advertisers will be attracted to legitimate, quality-controlled sites such as Joost (“We know what content goes on it, and can report back results and statistics to advertisers”), but in the absence of compelling local content and a significant user base, its short-term appeal is questionable.

Although it is not made explicit, the company that Tom’s ambitions most closely resemble is News Corporation - and Rupert Murdoch has found the China market notoriously difficult to crack. Can a domestic media conglomerate model take off in China? “It’s not impossible, both because of the cash it has available, and because of the connections it has through its owners,” says a source. “But it needs to find a strong path - it used to be wireless, and that might be possible again, but Tom really needs to find its own profile.”

At the very least, Yeung appears to appreciate some of the softer skills that might be required. “The media industry is like a shrink for society - you give them hope when they’re unhappy, and some perspective when they’re doing well,” he explains. Tom, he says, is looking to soothe, entertain and inform viewers during all aspects of their lives.

Yeung hires only locals in the top Tom roles reporting to him. “Understanding the local culture is very important. Global trends are a good reference for local development.” This dichotomy is also true of Yeung himself. While he considers himself a local Hong Konger, it is apparent that his overseas education has shaped his outlook. “It taught me to think locally with a global perspective,” says Yeung. “Before that, I was just another Hong Kong kid. Afterwards, I knew I would never be content just to be a local person.”

Having studied electrical engineering at MIT and then worked as a strategist at Coca-Cola, Yeung also straddles the technology-communications divide. That, he insists, makes him the right man for the job. “I’m comfortable with the tech-speak, but I also have a background in strategy and marketing,” he says. “In China’s media industry today, you have to have both.”

Ken Yeung’s CV

2008 CEO, Tom Group
2008 Chief operating officer, Tom Group
2002 Director, Horizons Ventures
1999 Chief operating officer and co-founder, 36.com