This is part 2 of a four part series. Part 1 can be found here:
On 9/7/2007, Sina announced its Olympic strategy:
The following articles summarize what Sina planned to do:
Sina would get at least 15 reporters’ card that enable these reporters to report during the Olympics. Sina would also have a 450 reporters team to report Olympics. These reporters will be able to speak Chinese, English, German, French, Spanish, and Arabic.
Sina again announced that all websites will have equal access to Olympics news. In addition, all Olympic sponsoring companies can put their Olympic logos on Sina.
Finally, Sina would have three “secret weapons” that are to be announced later.
From the above article, Sina would like to extend the cooperation agreement with Tencent, NTES and others after the Olympic also. They want to make it permanent.
Sina just signed sponsor deal with
But does this mean if Sina can exclude Sohu from these news, Sohu can also excludes the alliance and Sina, Ntes, and others from the Olympic news since Sohu is the only Olympic internet sponsor?
Sina also talks about the alliance deal. So far, the alliance consists of 40 internet companies, 16 newspapers, and 9 TV stations.
At this point the alliance only relates to the sharing of information. But Sina wants to expand the charter of the alliance to include the sharing of the advertising revenue amoung the core group. Sina also wants to make it a permanent arrangement, well after the Olympics.
Sina may have start this alliance out of its weakness against Sohu. But it seems Sina is going for Sohu’s jugular.
Is Sina trying to form a monopoly?
Sohu needs to be extremely careful. She is in a rock and a hard place. She would not be interested in being part of the alliance before the Olympics. At this point, it seems Sohu is holding all the cards prior to the Olympics. But she can’t be excluded from the alliance after the Olympics. But this alliance was created to fight Sohu for the Olympics, why would the alliance accept Sohu after the Olympics.
In the long term, Sohu is not going to be able to compete with the combine might of Sina, Ntes, and Tencent.
On the other hand, a permanent alliance sounds great on paper. But the devil is in the details. If the alliance is going to share information, and Sina is going to provide a 450 person reporting team, why shall other companies hire more reporters when they can get the report from Sina for free?
If they want to share ad. revenues, Sina probably preferred to break the percentage based on the current ad. revenue for each company right now. Sina is the biggest advertising earner right now. But for a company like Tencent, they want to grow their advertising revenue, why shall they want to lock down their ad. when they feel they can grow faster on their own.
And even if Sina can pull it out and form a real alliance, is that even legal? Is this alliance really a monopoly?
Next I am going to talk about the Sohu press conference.