There's a press release on our latest report on M&A activities in Asia over on our corporate blog.
Thursday, January 31, 2008
I have had my doubts about China Finance Online. It's a small company which has struggled to define a compelling strategy and justify its NASDAQ listing.
So, it's very interesting to see, less than 10 days after the Xinhua PR Newswire deal with Kong.net, the China Finance (JRJC) is linking up with China Telecom. The deal is designed to "to deliver a variety of compelling financial information services to more than 40 million broadband users across China Telecom’s internet platform and offline distribution network". It goes on to note that "CFO will provide accurate, timely and comprehensive financial content to “JRJC-Vnet Finance”, the co-branded finance channel, and develop subscription-based financial information and analytical products, including free-trial and fee-based versions, dedicated to China Telecom’s broadband subscribers. China Telecom will distribute CFO’s products through the Vnet portal as well as its over 10 thousand business halls, and the two parties will split the revenues according to the agreed-upon scheme under the alliance agreement".
We'll be watching the next few quarters with great interest. Stock watching site Seeking Alpha thinks this is a great deal. "As the reality of the strategic alliance surfaces, the stock has tremendous potential to form legs and continue the run. Given the fact that China Telecom’s 40 million broadband subscribers only comprise 20% of its total customer base, the number of subscribers to the financial portal can only continue to grow", it says.
Tuesday, January 29, 2008
When I posted a couple of pictures from the deserts of Dubai last week, I promised an explanation. Travel and other work commitments have delayed that explanation for which apologies.
I was at the 6th International CEO Forum, an annual event for the top dogs in the exhibitions industry. It was being held outside Europe for the first time and attracted around 85 participants.
Dubai is clearly an attraction. The market grew 25% last year according to Sandy Angus of Andry Montgomery and by a factor of 5 in the past decade. The huge new Exhibition City is now under construction to give room for expected future growth. The country continues to predict 11% annual GDP growth and a representative of the government told delegates that they were now spending half of their budget on improving transport links which have become strained by the city's success.
Economist Roger Martin-Fagg from Henley Management College is a popular speaker at these events, being able to translate better than most the complex gyrations of the global economy into concepts easily grasped by business people. His projections:
- The US will be in full-fledged recession in Q4 2008 and Q1 2009.
- The traditional link between economic growth and oil prices will be re-established and, as a result the price of oil will begin to drop. Even if it goes down to $60, that won't affect too much growth prospects for the Middle East which can survive very happily at that price level.
- The key economies will begin to grow in mid-2009.
- UK property prices will fall 7% in 2008.
- The downturn in Japan will be sharper than either the US or the UK.
- India is a better long term prospect than China because he does not see domestic consumption in the latter kicking in hard enough. I don't agree with him on that.
- By the end of 2008, the Euro/US$ exchange rate will be $1.60.
Friday, January 25, 2008
Wednesday, January 23, 2008
I have had the pleasure over the past couple of years to participate on the sidelines of the formation of a new industry association, the Business Information Industry Association Asia/Pacific and Middle East, or BIIA. It is currently holding its annual Credit Management and Information Forum in Hong Kong.
Yesterday, the group's members met and were given an overview of developments in global business information trends by Chairman, David Worlock of Outsell. David is predicting a gradually slowing of growth in some sectors of the information industry including some falls, "for the first time" in some sectors of the digital media business. With the exception of search, most parts of the business are expected to grow as slowly as 3.5% in the next 2 - 3 years....glacial by the standards of the digital industry.
As I do, David believes that mobile is the big untapped opportunity in business information. How much more true is that in this part of the world even than in Europe and north America. Alongside that, information companies will have to learn to work with software providers as they strive to integrate their data into workflow.
As usual these days, Alibaba come up in conversation as a potential 'unexpected' competitor. It has just launched a seller credit service with China Construction Bank and, just days before that, the launch of a SaaS marketplace. Both of these are key components of the future business model Worlock is predicting and Alibaba's reach into the 10s of millions of Chinese SMEs makes it a powerful player that the large, traditional business information providers, tied as they are into the western corporate model, may find hard to match in China.
Monday, January 21, 2008
Physorg.com reports that the Singapore government is launching an 8 month competition to develop a new, world-beating multi-media search engine. The prize for the winner is $100,000. "Contestants are required", he report says, "to create a search engine that can identify search terms found not only in text within websites, but in music and video files as well".
Sounds like the holy grail of search engine development to me.
Bloggers altogether more distinguished and expert than I, including searchengineland and Googleguru John Battelle, question whether 8 months is really long enough and whether the prize correctly reflects the scale of the challenge.
Come on Singapore. You just had a record year. Dig deeper. Add a few zeros. That will really get the bright sparks flying.
I spent Friday in Macau and stayed the night at the Venetian. Very nice it was too.
With Macau's success and its 27 million visitors in 2007, the ferries have become more and more crowded. The Venetian's parent, Las Vegas Sands, has been trying to alleviate the impact of this by launching its own ferry service, CotaiJet.
This has been hampered by some mysterious legal challenges which smack of dirty tricks. Destination Macau reports on the resumption of service. Scan down to the bottom of the piece, though, as you'll see that the dirty tricks are perhaps not entirely over. Somebody (we offer only very short odds on correctly guessing who) is 'squatting' on the obvious domain name cotaijet.com, leaving punters having to remember the slightly less obvious com.mo address.
Ah well, as the Venetian nears welcoming its 8 millionth visitor, they can presumably indulge in the luxury of regarding this as a minor fly in the ointment.
Thursday, January 17, 2008
It's been a while since I posted on mobile media and business information (click on the "Mobile" label to see some of the older ones). It's a topic that continues to niggle with me though. So many phones and so few interesting business applications.
It was interesting, then to see this announcement from Xinhua PR Newswire, the jv between Xinhua Finance and United Business Media's PR Newswire. They're linking up with NASDAQ-listed Kong.net to add "XPRN's entire daily corporate press release file to Kong.net's 40 million subscriber base". The releases will then be available to all mobile phone users that use Kong.net for browsing and searching.
XPRN Director Yujie Chen is quoted as saying that adding Kong.net "is especially important due to the ability to reach mobile phone users in large numbers".Kong.net is building out a financial channel and we'll watch with interest to see if others sign up as real business information suppliers.
Apologies for the 'radio silence' in the past few days. I've been in Chengdu and find it disconcerting that, while in China, I can post to the blog via blogger.com but can't read it through blogspot.com which remains fully jammed.
I was in Chengdu for the annual CEFCO conference - China's biggest meeting for the exhibitions industry which regularly pulls in an audience of 650 or so. It's a good opportunity to catch up with industry friends and contacts from around China and around the world.
The organisers have worked hard over the past couple of years to put on a more engaging and interesting series of sessions and I've have to say that they seem to me largely to have succeeded. I moderated a panel discussion with CMP Asia' s Jimé Essink, Messe Munich's Manfred Wutzlhofer, last year's UFI President and former Cologne Messe CEO Jochen Witt and CIEC's Zhu Heping. They gave varied accounts of their view of the opportunity for exhibitions represented by China. All basically agreed that the rapid explosion of business seen in the past 10 years has to begin to give way to a greater focus on improved professional standards and a greater focus on customer satisfaction. In his annual report on the Chinese exhibitions industry, CCPIT Vice Chairman Wang Jinzhen told delegates frankly that exhibitor satisfaction with fairs in China is declining.
On a less serious note, this is now the 2nd time I've visited Chengdu and not managed to get to see the pandas. A return visit is clearly called for. There is a huge exhibition centre there and Business Media China is announcing a new partnership with them. So, I have an excuse.
Next year in January, the 5th CEFCO will take place in Nanjing. I expect I'll be there.
Sunday, January 13, 2008
CMP has just run its first jewellery fair in Macau. I'll be interested to hear reports of how people think it went although it clearly had good support from the Israeli diamond trade as well as Hong Kong jewellers.
For years now, the big jewellery fairs in Hong Kong have generated regular (and fairly similar) stories about ambitious efforts to relieve the exhibitors of their jewels. In some cases, it has appeared to be more an effort to relieve the insurance companies of their profits.
However, you might argue that the fact that jewel thieves appear to have targeted CMP's brand new show - or so this Macau Daily Times piece would have us believe - is a sign that it is already being taken seriously by all elements in the jewellery trade.
Saturday, January 12, 2008
I started off reading a fairly old story from my old friends at Express Computer about Alibaba's "Open Sesame" event in Mumbai last month. Interesting stuff and I had a bit of a poke around Alibaba's Indian channel.
I then noticed that this had taken place during the 5th China Products Exhibition at the Mumbai Grand Hyatt (well, to be precise, in a tent outside the Mumbai Grand Hyatt). This is officially organised by CCPIT as you would expect. What caught my eye, though, was that it is actually managed by Worldex India Exhibition & Promotion Pvt Ltd. Worldex is Thai company whose main business is selling space to Thai companies in over-seas shows. They're pretty good at it.
Interesting then, that they should be moving into event management in India. It's a market that appeals to Thai companies. We know that Khun Ladda's NCC exhibitions team is also active there. I am assuming that we'll see more of these 2 or 3 way ventures between Asian companies as the intra-Asian trades become increasingly important...particularly if the N. American export market falls off its perch.
Friday, January 11, 2008
We've been talking in the office over the past few weeks about how the share prices of Global Sources and Alibaba appear to have started moving almost in tandem. We took a closer look at that today and found out that it wasn't quite as true as we'd thought.
Until early-December, they were really joined at the hip but, as this Yahoo! Finance chart shows they have since diverged. Although the prices move in similar patterns, Global Sources is down about 18% since Alibaba's Day 1 close while Alibaba itself is now down 40%. As we write, it's trending up a little bit with the market.
Thursday, January 10, 2008
When I blogged Warren Buckley's departure back in November, I suggested that the gamblers amongst you might place your chips on the appointment of Pieter Idenburg to full his shoes. I wish my own bets were on the mark more often but was pleased to see the announcement that Pieter will, indeed, be stepping up to the Suntec hot seat.
Congratulations Pieter. We wish you well.
Perhaps somebody there can send me a bigger picture. This was the biggest one I could pinch from the web today.
Slowly, but surely, the Asian B2B media M&A scene is creeping onto the radar. Our tracking of deals in 2007 saw an almost 70% increase in value to US$456 million, up from $269 million in 2006. Average deal value was well up at $15.7 million (although that's still pretty small) over 29 deals, up from 22 in 2006.
More detailed analysis will be sent to our Asia Business Media Tracker Service subscribers later this month. If you want to see this report, let us know.
Predictions for 2008: 37 deals worth $650 million. For the record, we predicted 25 transactions and a deal value of $300 – 350 million in 2007. So, we weren't too far off the mark on deal numbers but way under-estimated total value. Let's hope for another year like that in 2008!
Wednesday, January 09, 2008
There's a very interesting piece on the China Daily site which reports B2B transactions rising sharply in the PRC. It reports:
Business-to-business (B2B) transactions hit 1,250 billion yuan ($168.9 billion) in China last year, up 25.5 percent from 2006, according to a survey released on Tuesday.It goes on to note the Alibaba.com has a 70% market share.
The "Netguide 2008" survey, which provides a wrap-up of 2007, polled more than 300 web sites and about 200 enterprises, with 50,786 interviewees around the country.
Continued steady growth is expected with the report forecasting that "China's B2B trade volume will exceed 1,620 billion yuan in 2008 and 2,130 billion yuan in 2009". That's 30% this year and 31% next.
Now, if the media sites can start to work out ways to take some share of these transactions rather than just facilitating them, then there's clearly much money to be made. Unfortunately, the B2B media has been grappling with that conundrum since about 1996 and doesn't seem to have made too much progress.
Monday, January 07, 2008
This one has taken a couple of weeks to filter its way through to me but I note with great interest the Shah family's decision to sell its Jasubhai Digital Media subsidiary. The company has been acquired by 9.9 Mediaworx for an undisclosed sum and is to be re-named 9.9 Digital Media.
According to a Business Standard article just before the deal, 9.9 was established by former ABP CEO Pramath Sinha. ABP is the publisher of Businessworld magazine.
ZDNet India, which is run by Jasubhai Digital Media, quoted Sinha saying "We believe that the media industry in India is at its infancy and niche, sharply targeted media brands such as those of JDM have exponential growth opportunities." The article also notes that "the Jasubhai Group will continue to have interest in the business through a financial stake in 9.9 Media".
Friday, January 04, 2008
- Sen. Obama, far closer in age to being a toy-user than any of his opponents, said just before Christmas that he thinks that Chinese toys are nasty and should be banned. By 23rd December, he had retreated a little from that position.
- The fact that his position was ridiculous is made clear by this Hong Kong Standard piece about prospects for the toy industry which notes that "86 percent of toys sold in the US market are made in China".
- The piece also refers to next week's Toy Fair, the first big exhibition of the year in Hong Kong. It will be an interesting event to watch for any signs of fall-out from last year's toy safety scandals and the threat of a slowing US economy.
I wrote last in November about the evolution of the conference away from Powerpoint and talking heads. In that post, I wrote "Nobody though, as far as I can see, has really come up with quite the right solution to making these events marketable, truly valuable and profitable for the organisers".
Well things seem to be changing fast. CMP Media in the US just paid US$1.2 million (with a possible $3.8 million more to come) for Mass Events, an 'un-conference' business. And, one of America's most respected magazine and B2B bloggers, Rex Hammock is speculating today that 2008 will be a big year for the "unconference" business. Such a big year, in fact, that he thinks we'll be begging for the phrase to be banished by the end of the year. I think I already am. What a silly word.
Rex's post is tongue-in-cheek, but it does highlight the degree to which conference and business event organisers are deeply nervous that their simple recipe for reaping profits doesn't taste so good any more to those who have to pay.
We will be watching carefully for the evolution of this trend in Asia into profitable business.
Thursday, January 03, 2008
Thanks to CMP Asia's Mike Tan for pointing us towards an acquisition that we missed last year: Suntec Singapore's sales of its events business, Suntec Integrated Media to a new Singapore-based company. It's now known as TMX Show Productions and is run by Herman Ho.
The press release is here and I shall send myself to the bottom of the class as punishment for paying insufficient attention. There are certainly lots of changes afoot over at Suntec with Warren Buckley's return to Canada and Marketing Director Elena Arabadjieva heading off to the Genting project on Sentosa.
Wednesday, January 02, 2008
HKTDC's chief economist Edward Leung can be seen here making his predictions for 2008. He expects Hong Kong export growth to drop from 9% in 2007 to 5-7% in 2008. He thinks that digital electronics and jewellery exports to Europe will be the hot sectors this year.
Who knew, by the way, that our friends at the TDC have their own YouTube page. How very trendy of them!