"Our digital strategy is starting to pay off. But frankly, we are already late in embracing Internet technology."

Traditional newspapers and publications covering technology sectors are bleeding more.

Last year, China Computer World (CCW) Group, the largest IT media house in China, posted 450 million yuan (US$56.25 million) in annual revenues, up 11 per cent year-on-year but the revenue growth mainly came from exhibition business and online publishing, according to Liu, the group's president.

"Our traditional publishing business is, in fact, declining rapidly in terms of both circulation and ad sales," says Liu.

"We could have built a strong online brand in the 1990s. But due to the Internet bubble, we did not make adequate efforts to commercialize CCW's online version. We really missed a good chance."

Liu says his company expects to generate 50 per cent of its revenues from publishing via new technologies by 2010.

CCW has significantly cut the amount of news offerings provided to Internet portals such as Sina Corp as a defensive move and is adopting an "Internet-first" strategy to boost digital publishing. Last year, CCW's website generated 18 million yuan (US$2.25 million).

"Going digital is a move CCW has to take," says Liu. A recent survey by CCW Group shows "our top 20 ad customers are shifting a large portion of their spending onto the Web."

According to Shanghai-based iResearch, China's online ad market was worth 3.13 billion yuan (US$391.2 million) last year, up 7.6 times from 2001.

The market is forecast to hit 4.6 billion yuan (US$575 million) this year and 15.7 billion yuan (US$1.96 billion) by 2010. The revenues earned by ads agencies are not taken into account.

But that accounts for only a small portion of the ad sales of traditional media last year. China's ad market was worth 316 billion yuan (US$39.5 billion), according to Nielsen Media Research.

But with big companies increasingly interested in interactive marketing, the forecast for the online ad market could be upgraded, according to industry observers.

"Most big names in the market such as Lenovo and Nike are our customers," boasts Sina's Chen.

Feeling the heat, some major newspapers have recently called to form an alliance to prohibit Sina from using their news offering.

But such an attempt could hardly succeed, according to Wang Ran, chief executive officer of China eCapital, a leading private investment bank in China focusing on the media sector.

"Some smaller newspapers and magazines are still putting a big bet on the very influential Sina to make a name for themselves and boost their popularity," he says.

And the online ad boom is not totally coming on the cost of traditional publications, Wang notes.

"That is largely an emerging market."

The only solution for traditional print media might be a convergence with new media, especially Internet tools and mobile telephony.

"Traditional media would never be replaced, but they will be increasingly eroded by new media. It's foreseeable that traditional media will get a larger proportion of their revenues from publishing via new technologies," Wang says.

The competition between traditional media and new media is set to intensify in the coming years.

"Even new media like Sina have realized their news sources are at stake with the increasing wariness of traditional media," says Wang.

"They are diversifying their resources such as blogs to lower risks."

Blogging is a service enabling people to post Web blogs, or online journals. By the end of last year, China had more than 16 million bloggers.

And 52 per cent of white-collar workers in China keep blogs, according to career consulting firm CBP Career Consultants Co Ltd.