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Focus Media ends wireless ad business

By Tuo Yannan (chinadaily.com.cn)
Updated: 2008-12-11 16:25

Focus Media Holding Ltd, China's largest digital advertising company, has updated the proposed restructuring of its CGEN in-store advertising network and said that it has terminated its wireless advertising business because of "changes in market conditions".

In a statement, Focus Media said the termination will incur an additional one-time charge of about $20 million in the fourth quarter of 2008.

The company also said that the 2008 performance of CGEN's in-store advertising business has fallen short of expectations. The company has made a provision of $200 million in the fourth quarter for restructuring this business.

Focus Media's wireless mobile business has been troubled by the so-called "short text massage spam," documented in a CCTV program early this year. In the CCTV report, Focus Media acquired from unidentified sources the private information of 200 million mobile phone users, many of whom have complained about the deluge of short advertising messages.

Focus Media's vice president Ji Hairong was quoted as saying: "the Chinese wireless advertising market is still immature, Focus Media needs more time to explore and adjust."