Red Herring: China's three largest portals try to kick their wireless addiction

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Red Herring: China's three largest portals try to kick their wireless addiction [Copy link]

　The wireless business that once revived Chinese portals seems to have passed its most prosperous period, but fortunately these websites have found other ways out.

　　In January this year, the State Administration of Radio, Film and Television issued a document prohibiting radio and television and other media organizations from publishing fortune-telling information with feudal superstition, and the horoscope information provided by several major portals through text messages was also within the scope of this ban.

　　Three years ago, it was the wireless service that saved Sina , Sohu and NetEase from bankruptcy. However, when wireless service revenue accounted for half of the total revenue of the three websites, analysts had already warned that this business structure was too risky.

　　Facts have proved that they were right. A series of actions taken by China Mobile last year to rectify wireless service content hit the three websites again. NetEase's 2004 financial report showed that the company's wireless service revenue fell from US$33.8 million to US$19.1 million, a drop of 44%. Sohu's wireless value-added service revenue fell by 64%.

　　However, there is no need to lose confidence in Chinese portals. The three websites are all working hard to develop new sources of income, and their goals are different. NetEase is eyeing online games , and it has now become the second largest online game operator in China after Shanda . Sina relies on its advantages in online news to expand its advertising business. Its advertising revenue in 2004 has reached 65.4 million US dollars, an increase of 59%. Sohu has returned to its old business - search . The company's search business revenue in the last quarter was 2.7 million US dollars. 　　Although the development of wireless services has been restricted to a certain extent, the three websites will not give up this piece of fat meat. You should know that Sina's wireless service revenue in 2004 reached 124 million US dollars. Sohu CEO Zhang Chaoyang also said: "This year will be a year of adjustment for the company's business. The wireless service business reached the bottom at the end of last year. It only accounted for 19% of the company's fourth quarter revenue. But I believe the situation will improve this year." 　　In fact, it is not difficult to understand why these portals are so fond of wireless services. It was the SMS business that helped them survive the difficult period of the dot-com bubble. The business reached its peak between 2002 and 2003. However, due to complaints from consumers about the irregularities of service providers, China Mobile took a series of rectification measures in August 2003, which affected the revenue of the three major websites. 　　Soon, they turned their attention to the new MMS and WAP services. Unfortunately, some service providers provided unhealthy information, which forced China Mobile to take heavy measures again. In addition, China Mobile also formulated a more convenient wireless service cancellation policy, which was tantamount to adding insult to injury for the portals. Of course, the wireless business of the three major websites has not been interrupted. Former IDC researcher Nathan Midler also believes that there is still room for development of wireless services. Sina also plans to replicate the successful experience of SMS business to MMS and WAP business, which have already achieved revenue of 6.7 million US dollars in the last quarter. Sohu also said that it is still confident in wireless services and it is even ready 　　for the upcoming 3G . 　　Although it is still unclear whether MMS and WAP services can be as successful as SMS services, most analysts are still positive. They believe that due to the improvement of various regulations, MMS services will develop in a healthier way. 　　Faced with the successive rectification storms, portal websites have also learned lessons. They no longer pin their hopes on wireless services, but instead develop businesses based on their own advantages. Take Sina as an example. Although its advertising revenue in the fourth quarter of 2004 fell by 1% compared with the previous quarter, analysts believe that this is mainly due to seasonal factors. Since the three portal websites have brand advantages that other websites do not have, they are still optimistic about the advantages of these three websites in online advertising. The 　　development of NetEase's advertising business in 2005 seems to confirm this. It has signed an advertising order of 100 million US dollars with eBay. In addition, the success of online games has also added a lot of color to the website's financial statements. Of course, 　　the other two websites are not to be outdone. Sina and Yahoo have jointly established a C2C business website called, and Sohu has launched the "Sogou" search business, which has also begun to show results. 　　Analysts believe that these three portals have gradually moved away from the stage of relying solely on wireless services and have found a path that suits their own development.


















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