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:

http://chinese-net-gaming-stock.blogspot.com/2009/05/ntess-portal-businesss-rebirth-part-2.html

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

http://jz.163.com/

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.

CNNIC Blog survey report:

CNNIC came out with a survey report on China’s 2007 Blog. To give some background, I also find its 2006 report. The following is the important part of the report:

For 2006 report, the link is as follows:

http://www.cnnic.cn/uploadfiles/pdf/2006/9/28/182836.pdf

Internet user: 123 million

Blogger: 17.5 million. (14.2% of internet users)

Active Blogger: 7.7 million (44% of Bloggers)

Blog: 33.7 milion

Blog reader: 75.6 million (60% of internet users)

48.9% of Blogger are male and 51.1% are female.

Didn’t have survey result on who is the most popular blog sites. But from the report, it seems Blogcn, Sina Blog, MSN blogs, QQ blogs, Bokee Blog, Tianya Blog, Blog.com.cn, Netease Blog, Sohu Blog, Mop Blog, and Baidu Blog (in order of popularity) are the most popular blogs.

For 2007 report, the link is as follows:

http://www.cnnic.cn/uploadfiles/doc/2007/12/26/113707.doc

Internet user: 180 million

Bloger: 47 million (27.6% of internet users), or about 170% year over year growth.

Active Blogger: 16.9 million (36% of Bloggers), or about 120% year over year growth.

Blog: 72.8 million

Didn’t talk about who is the most popular blog sites. But it implies the portals are very popular for the bloggers. It said QQ space, Sina Blog, Netease Blog and Sohu Blog are very popular.

From the report itself, it is hard to tell if portals such as Sina, Netease and Sohu are gaining market shares from the standalone blog companies. But if they grow over 120% year over year, then we know they are gaining market shares. Hopefully, they will published the year over year increase number for the blog during their next earning conference.