Soros-Backed MediaV Sees Sales Jump as Chinese Cut Costs
MediaV Holding Co., a Chinese online advertising company backed by billionaire George Soros, expects sales to jump as much as 80 percent this year as a slowing economy prompts more customers to use its services to cut costs.
Revenue may rise to about 900 million yuan ($142 million) this year, Willy Yang, chief executive officer at Shanghai-based MediaV, said in a phone interview yesterday. Slowing industry growth this year is favoring the part of MediaV’s business that helps smaller advertisers with limited budgets, he said.
MediaV buys advertising spots from online portals including those of Sina Corp. (SINA), Sohu.com Inc. and Tencent Holdings Ltd. (700), and resells to clients to allow multiple companies to share the same space. Yang, whose company won an investment from Soros Fund Management LLC last year, expects China’s online advertising market to post “a small-scale recovery” in 2013.
China’s economy “won’t be too good” in 2012, Yang said. “That’s not a bad thing for our targeted-marketing business,” he said. “In China, the potential of the advertising market for small-to-medium businesses is still not totally explored.”
Soros Fund Management’s Quantum Strategic Partners were among investors in a $50 million financing round for MediaV last year, according to the advertising company’s website. MediaV’s clients include Procter & Gamble Co. (PG) and Suning Appliance Co. (002024), and about 300 Chinese e-commerce companies, Yang said.
Soros had net worth of $21.9 billion, ranking him 20th in the Bloomberg Billionaires Index of the world’s richest people.
Sina’s advertising revenue, mainly from sales of display ads, rose 9 percent to $78.5 million in the first quarter, the New York-listed company reported in May. That compares with the 27 percent ad sales jump in 2011.
Sohu’s brand advertising revenue grew 7 percent to $61 million in the first-quarter, the Beijing-based company reported in April. Ad business at China’s third-largest search engine, “got off to a slow start” in 2012 amid “softening macroeconomic conditions,” the company said at the time.
MediaV helps advertisers focus spending on specific groups of users, Yang said. Demand for such programs is increasing as advertisers’ budgets become more constrained, he said.
Still, Sina may be able to double its online advertising sales within two years as clients boost spending on its Twitter- like Weibo site, Yang said. Ad sales on the Weibo site may match revenue generated from Sina’s web portal business within two years, he said.
Sina and Tencent are leading the race to increase ad sales based on demand for social-networking services among Web users in China, according to Yang.
To contact the editor responsible for this story: Anand Krishnamoorthy at firstname.lastname@example.org