About this Blog

The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Saturday, May 9, 2009

NTES's Portal business's rebirth – part 3 – Targeted ads

This is the 3rd part of a 3 part series on what NTES is doing to rejuvenate its portal business. Part 2 of this article can be found here:


Netease just start a new service that will allows for precision targeted advertising. That service can be found here:


This service can potentially cause major upheaval in the internet advertising field. Two biggest areas in internet advertising is search and portal. They targeted two different kinds of clients. The portal targets brand ads. Its clients are big cooperation. Search on the hand, because it can target very specific sector, is catered to small and medium companies.

NTES provides blogs, photo album, and email services to its users. These services are free to the users. But they do provide their personal information to NTES. Information such as their ages, their locations, their sex, their hobby, their likes and dislikes, are very useful information. That information can therefore be used for highly segmented targeted advertising. Therefore, this is great for small and medium companies.

Therefore, NTES just come out with a way for the portals to grab businesses away from the search engines.

At this point, NTES is targeting this service for SME (small and medium enterprises). NTES has 300 million email accounts, 80 million blog accounts, and 23 million photo album accounts. Therefore, it represents a very attractive target for advertising to the millions of small businesses in China.

NTES just start this service, to avoid too much inconvenience to their users, the ads will be put in a few places at the beginning.

At this point, I don’t think NTES will get a lot of new revenue at the beginning. But if other portals start to follow suit and start to do this, it would allow all the portals to put more ads in more easily observable locations. By then, it would really become a threat to the search engines.

1 comment:

Great Penny Stocks Under 2 Dollars said...

I would like to bring to everybody's attention that invests in value stocks. Their is one overwhelming fact when it comes to value investing and that is you must buy decent companies with very low price to sales ratios to have a high probability of making a lot of money buying value stocks their is no other way believe me. And what is a very low price to sales ratio. First let me explain very clearly to everyone what a low price to sales ratio is. The price to sales ratio is the market cap of a stock compared to the sales that the company of the stock does on a annual basis. In other words the company I talk about below has a market cap' which is all the shares of the company issued and outstanding of just eight billion dollars. But the comapny does fiftyfive billion dollars in annual sales. In other words the market is valuing bunge at just eight billion dollars but the company does fiftyfive billion dollars in annual sales get the idea. Ok one other thing never forget this warren buffett could never have made the enormous returns buying value stocks unless he was buying value stocks with very low price to sales ratios period' and I am almost certain if you asked him he would totally agree. Bear in mind I would not say something that I cannot back up believe me. I will give an example of a company of really decent quality that I consider really undervalued. The company is Bunge Limited symbol {BG} engages in the agriculture and food businesses worldwide. The stock currently trades around 59 dollars a share. I think the stock could easily get to 450 dollars a share over the next five years. Yes you heard it right four hundred and fifty dollars a share. Assuming their are not stock splits. And what do I base this on If the companies profit margain expands from around 1.75% to 4% over the next five years and if the sales of the company expand from 54 billion to 85 billion thats growth of about 7 or 8 percent a year and if the companies stock than trades at a price earnings ratio of about 20. That would put the price of the stock at 450 dollars a share. It could even be more than 450 dollars a share if you reinvest your dividends the company pays a nice dividend also if the company does a share buyback this could increase the value of the stock even more. Keep in mind that their are stocks that are popular that trade at much higher price earnings ratios than 20 times earnings one example is whole foods market it currently trades at 35 times earnings. Also keep in mind that bunge is a company of really decent quality not at all a high risk stock. It has the potential to leave a company like General electric in the dust. I understand your skepticsm if you are reading this but go to any stock broker or financial planner CPA that knows how to value stocks and they will confirm everything that Im saying here.


A test for now