Olympic battle between the portals

My last post on the Olympics battle between China’s internet portals can be found here:

http://chinese-net-gaming-stock.blogspot.com/2007/09/battle-of-olympics-part4-conclusion.html

First, Sohu got right to broadcast CCTV’s Olympics coverage. It is time for Sohu to crow about how much advantage it gives them:

http://www.paidcontent.org/entry/419-sohu-gets-olympics-webcast-rights-live-broadcasts-from-outside-venues-n/

Not to be out-done, the alliance members, Sina, Ntes, and Tencent also announced that they got the license to broadcast CCTV’s Olympics coverage also

http://internet.weaseek.com/2008/0716/47227388.shtml

http://biz.yahoo.com/paidcontent/080715/1_325428_id.html?.v=1

From the above article, CCTV has 9 partners that have license to rebroadcast CCTV Olympics coverage.

Now, this is just re-broadcasting TV programs. I believe all four companies also have the right to do original programming on their own. For that part, Sohu has the advantage in that it has more reporters’ licenses because it is also the official web site provider.

Finally, the following article provides a pretty good insights to Sohu’s Olympics strategy

http://cn.ibtimes.com/articles/20080715/sohu.htm

This is an article about an interview with Sohu’s CEO on 7/14/2008. Some major points on this article:

- Regards to Olympics coverage, he felt that Sohu has two major advantages, the breadth of coverage and the speed of coverage.

- There will be major investment for the Olympics.

- There will be marketing campaign such as ads on public buses. They will also do marketing on the Olympics relay cities. The video broadcasting on the Olympics relay run is pretty expensive also.

- The money made from the hit game TL is really helpful. It more than offsets the additional expenditure for the expense paid for the preparation of the Olympics coverages.

- The three major pillar of Sohu’s Olympics partnership is

1. Sohu is the official sponsor and official web site developer of Olympics

2. partnership with CCTV

3. partnership with www.sports.cn

- The Olympics Strategy for Sohu is basically to build the Sohu brand during the Olympics.

- Sohu had build all its products such as Sohu News, Sogou Pinyin Input Method, and Sohu community to keep those users after the Olympics.

Note that Sohu is the developer of the official Beijing Olympics web site, http://www.beijing2008.cn/index.shtml. On the other hand, www.sports.cn is the developer of the official web site of the Chinese Olympics Committee.

I think its partnership with CCTV gives Sohu a lot of TV programs. On the other hand, as the developer of the official web site and its partnership with www.sports.cn give Sohu a lot of reporter press pass to allow Sohu to do a lot of original TV production.

In the end, I believe Wall Street had a misconception about Sohu’s core strategy regards to the Olympics.

I think Wall Street think Sohu will benefit greatly during the Olympics and fades badly afterward.

On the other hand, Sohu’s core strategy is to use Olympics as a jumping point to dominate China’s Internet space. It will probably benefit from Olympics advertising. But it is also spending heavily to establish itself and grabbing market shares from the likes of Sina, Ntes, Bidu, and Tencent.

It is building capability so that it can keep the market share afterward.

If Sohu executed its strategy, it might not have make as much profit as the wall street expects during the Olympics; but it will trounce wall street’s expectation after the Olympics.