Ma Soldier's frustration ad: Tencent's income multipole concept encountered resistance

Not all good earnings are satisfying.

May 13, Tencent Holdings Limited (00700.HK) announced the first quarter of 2009 earnings, the current period of net profit rose 94% from a year earlier. However, advertising revenue is only 5.9% of the total revenue, but not to Ma Hua satisfaction. Tencent's advertising revenue for the year of 2009 is not optimistic. From 5.9% to 50%, Tencent distance ideal how far?

　　Paradox

On the internet and mobile value-added services, I am afraid there is no internet willing to compete with Tencent.

Tencent's total revenue for the first quarter was 2.5044 billion yuan, with internet value-added services earning 1.9046 billion yuan, up 90.7% from a year earlier. Wireless value-added services earned 439.5 million yuan, up 52.5% from a year earlier, which accounted for 76% of the first-quarter revenue, or about three-fourths per cent.

Despite the economic downturn, Tencent's Internet and mobile value-added services based on user fees make it a relatively good defensive force. Just a small part of the QQ pay users to the Tencent has brought an irrevocable revenue contribution.

However, Tencent's competitors are now more than just MSN im information providers, Tencent put itself on the platform of the portal site, which means that Tencent in the future and Sina, Sohu and other portals, Ma Teng is the growth of online advertising is ambitious, 2006 he had publicly said, " Online advertising will account for 50% of the total revenue over the next 5-10 years. ”

However, the forerunners hold the key strategic passage between, and it is not easy for the latter to get a piece. Tencent's online advertising revenue fell 30.1% in the first quarter, up 1.4% from a year earlier.

From 2004 to 2008, Tencent advertising average annual growth rate reached 99%. By the year 2008, this growth rate began to slow, when online advertising rose 67.5% from 2007, about One-second of Sina's advertising revenue over the same period.

Tencent had to face the paradox that the revenue growth of the Internet value-added business was growing rapidly, leading to an increase in the overall income of the group, while the growth rate of Internet advertising was not up to the growth of wireless value-added services, and it was more difficult to achieve Gao Jianbi. The more the overall income increases, the easier it will be for advertising revenue to fall. From the 2008, Tencent's revenue composition, including online games, internet value-added services, the proportion of revenue to 68.7%, is its main source of income, of which, only online gaming business to reach 32.6% of the proportion. and the brand advertising business accounted for only 11.6% of its share, compared to 2007 12.9% of the proportion fell 1.3%.

　　The difficulty of advertising

"Due to the strict budget control of advertisers, our online advertising business has been adversely affected," Ma explained, explaining the reason for the decline in advertising. ”

In 2006, Ma said in a media interview that the online advertising business is expected to replace SP as the second-largest revenue pillar within 1-2 years, with online advertising revenue representing more than 50% per cent of the company's revenue over the next 5-10 years. Now, looking to the future, MA Teng is no longer so optimistic.

"As advertisers remain cautious about 2009 advertising spending, advertising will continue to be affected by slowing economic growth," he said. "Ma's worry stems from" the prospect of advertising is still unclear, and if the recession persists, the performance of the company's users ' payment-type Internet services will be unknown.

Analysts say the failure of Tencent's online advertising is not just due to the worsening economic environment.

"Tencent Self-Knowledge in the advertising business late start, advertisers limited awareness, in the brand to do a foot article, and in the product launched Tencent Wisdom, such as direct education advertisers products. Tencent began to exert its brand online advertising business since 2006, but Tencent's brand network advertising business has not been able to achieve its level. "Li Zhi International analyst," The reason, the first, in the brand promotion is still stuck in the inculcation of advertisers, the lack of internet users of education work. Tencent is trying to convey such a message to advertisers, Tencent's "im+ Portal + community" is an effective platform for precision marketing. But the Netizen's cognition to Tencent still stays on the level of QQ and amusement, has not promoted its brand to the information obtains, the Exchange communication indispensable Internet platform. In other words, there is still room for improvement in the structural characteristics of its own users. Second, although Tencent's determination to develop online advertising is very large, but most of the energy used in the game and value-added services, dispersed the qq.com of energy, only with IM clients how many advertising positions? Third, the user qq.com generally through the login QQ chat software import, directly to find qq.com user habits are still not cultivated, this in the advertisers view, this flow is not the user initiative to cause, but through the QQ client transfer up. ”

The flow of people may be another incentive for Tencent's advertising business to be unsatisfactory. Close to Tencent, a source said, last year, Tencent advertising sales staff of the high-level exodus caused the loss of advertising, "a familiar advertising sales go, so that customers can not understand what Tencent wants to do." said the person.

"2009 may be an opportunity for Tencent," he said. "Sohu has played a role in educating users by sponsoring the Olympics," said analyst Li Zhi, who sponsored the Shanghai World Expo. ”

In the face of the uncertain future situation, to achieve 50% of the "distant" goal, Tencent still have to do what changes? Chen Huifen, manager of Tencent's investor Relations department, said: "The company's planned plan needs to be achieved in a step-by-step way and not because of sudden changes in market performance." Mr Ma's claim of 5-10 years of advertising revenue to occupy 50% of the overall revenue is an ideal state, in fact, there is no specific timetable. ”