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Tencent to focus more on online advertising

By Nicholas Ning (Shanghai Daily)
Updated: 2007-04-10 14:46
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Tencent Inc, the largest instant message service provider in China, will focus more on online advertising to diversify its portfolio and compete with Sina.com and Baidu.com in the country's rapidly growing Internet ads market, company officials said yesterday.

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The first step will be to upgrade its brand, which is generally perceived as catering to youngsters and entertainment-linked, to lure higher-end users to its portal and e-commerce site to entice more spending from advertisers.

The Shenzhen-based company will unveil a branding strategy today, and will install streetside billboards promoting its brand in big cities like Beijing and Shanghai.

"We will integrate our existing business as one powerful marketing platform, which can help advertisers accurately target their customers," said Liu Shengyi, executive vice president of Tencent, in a statement.

Tencent, whose business ranges from instant messenger QQ, a portal QQ.com to online auction service and search engine, makes money mostly from Internet value-added services like selling virtual image icons and games to its users, whose numbers are estimated at more than two-thirds of the 140 million Internet population in China.

Last year, the company's sales surged 96.3 percent year on year to 2.8 billion yuan (US$359 million), with 65 percent coming from Internet value-added services.

But sales of online ads posted the biggest increase among all its business areas, up a staggering 136 percent from 2005 to reach 267 million yuan as its portal QQ.com and games attracted more advertisers.

"Tencent should improve content quality for its news, finance and auto channels to attract higher-end users and more advertisers," said Fu Xinghua, an analyst with Analysys International.

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