Wednesday, October 31, 2007

To a friend and colleague

An announcement has just been made which leaves the world in which I work a much poorer place. My friend and colleague, Briac Le Mouël, from UFI in Paris has died suddenly and unexpectedly.

Briac, just 37, was Operations Director of UFI and closely involved in all aspects of its work. A man with a lively mind and great charm, he had friends around the world who will be mourning his loss this week.

French to the core (and proud of his Breton roots), Briac was an internationalist par excellence with a wondefully broad world view. We shall miss his most Gallic of Gallic shrugs, his wry smile and his sharp wit.

Monday, October 29, 2007

Strange goings on in B2B

I don't have this blog properly set up for guest bloggers but, I'm going to post this message I received from my colleague Mark Cochrane on that basis. To describe this news as strange would have to be the understatement of the week:

Kenfair started trading again this morning. The share swung wildly from HK$1.96 down to HK$1.52 and is now at HK$1.60 [PW note: it closed the day down $0.16 at $1.49 on a day the Hang Seng Index was up 1,181 points!]. They released an 'odd' 28 page document from which, at first glance at least they seem to be buying a coal mine.

Unrelated, but equally strange, TradeEasy's parent company has purchased a huge strip of land in Indonesia for the timber and is using TradeEasy as the vehicle for the purchase.

Strange times in B2B media.

You can say that again Mark. Heck, whatever next? They'll be listing a company and valuing it at 5 times the total worth of the market. Oh, yes. That has happened too.

Sunday, October 28, 2007

Contrary views on Alibaba

Once the IPO is obviously a cracking success, it seems to be becoming increasingly de rigeur to post clever-clever dumps on Alibaba. However, the China Law Blog is always workth reading and I would commend this post to you titled "I Hate Alibaba (The Website, Not the Company)". The basic theme is thus:

But then I think about all the harm Alibaba has caused to so many Western SMEs and I change my mind about calling my broker/brother. Alibaba makes the naive think China sourcing is easy. I realize blaming Alibaba for the mistakes companies make in using its site is really not fair to Alibaba, but at the same time, I do not see much use for the site beyond its serving as a really good directory of potential manufacturers of particular products.
Many would disagree and the real 'secret' value of the company would seem to me to lie in the subscriber base for the Chinese site and not the glorified yellow pages which is the English site they are writing about here.

However, let 100 flowers bloom and then try to get your hands on some Alibaba shares. They're surely going to pop quite gloriously. "Then what?" is anybody's guess.

Saturday, October 27, 2007

Asia = 36.9% of world Internet users

The World Internet Usage Statistics website provides several layers of fascinating dipping. It signaled an update to me today and, sitting in an airport lounge in Munich provides the rare leisure for poking around.

Things that caught my eye include:

  • There are now 1.24 billion Internet users around the world;
  • Over 459 million of them - 36.9% - are in Asia. That's way ahead of Europe which is number 2 with 337 million and N. America with 234 million. No wonder the boys and girls and getting excited about buying a piece of Alibaba.
  • Penetration levels in Asia are still very low as the following chart shows.

Click through the Asia data and this will catch you eye: Asia may already be 36.9% of world Internet users but it is also 56.5% of the world's population. There's plenty of upside here. Hong Kong tops the tables with 68% penetration while East Timor is worse even than Burma at 0.1%. North Korea scores zero.

Versailles, Pattaya and Internet advertising in China there a connection? There is if you're me. Despite the best efforts of striking Air France crew to keep me here, I am heading from the UFI Congress in Versailles to the ICCA Congress in Pattaya where I'm speaking on Monday.

ICCA represents an important and quite different slice of the business events pie - Congresses as opposed to exhibitions. There will be more than 800 people at the event in Thailand and a lot to talk about.

I'll try to be more successful on blogging from there than here.

In the meantime, I've followed a couple of posts from Thomas Crampton on internet advertising in China with great interest. The issues of measurement and sales techniques are crucial to understanding how money is being generated in this sector in China and where the cracks in the system lie. I encourage you to read these posts. They're very interesting.

Thursday, October 25, 2007

Will Alibaba break the HK$ peg?

"Probably not" is the answer, but it's remarkable that the question is being asked. The Wall Street Journal is measured in its coverage of how the Hong Kong Monetary Authority just purchased US$100 million to steady pressure on the peg, set at HK$7.80 = US$1 since 1983. The article notes:

The Hong Kong dollar has been bolstered by strong demand for local stocks, including the coming initial public offering from Corp., which could raise US$1.49 billion in the biggest IPO of a Chinese Internet company.
The South China Morning Post noted " Hot demand for's shares helped push the Hong Kong dollar to a three-year high yesterday" while the Standard commented "An expansion of the qualified domestic institutional investors program whereby mainland investors can buy Hong Kong stocks and the upcoming debut of mainland e-commerce portal fueled heavy demand for the local currency".

Meanwhile, Global Sources continues to benefit from the Ali-halo effect with its shares now trading at over US$35 on NASDAQ, double where they were on 17th September ($17.62).

Wednesday, October 24, 2007

In Versailles

I feel a million miles away from the frantic scramble for IPO forms having arrived here in France this morning. Striking train drivers meant the 40km on the road from the airport to Versailles to 1 hour and 40 minutes which is a bit pathetic but the day is crisp and clear and the town is delightful.

I'm here for the annual congress of UFI, the global association of the exhibition industry and will try to post a little more on that in the next couple of days as things unfold. The Congress has attracted a record crowd with strong groups from Asia including Korea, Thailand, Singapore and Hong Kong.

Tuesday, October 23, 2007

Let's not be immature about all this

Go to the back of the class and face the corner all those of you who turned straight to the back of the prospectus to find out how much the Directors earned (page I-29 if you haven't looked yet). Surely there's more important information near the front.

My colleague Mark Cochrane is beavering his way through the big orange book and there'll be a BSG report for our Tracker Service subscribers at the beginning of next week. Tough **** blog readers, we're not giving our opinions on this one away for free.

I'm off to Versailles for the UFI Congress. A record crowd is expected and I'll try to blog from there.

Monday, October 22, 2007

And, hey, they'll have even more to spend

Relying as we continue to do on unconfirmed sources, we now learn from Bloomberg thinks Alibaba has raised its price. The report says: Corp., will sell shares for HK$12 to HK$13.5 apiece in Hong Kong, said the people, declining to be identified before a public statement. The shares were initially marketed at HK$10 to HK$12.
If confirmed, this would raise US$1.5 billion. The report notes "that would value Alibaba at $8.8 billion, or 54 times estimated 2008 profit before stock-based compensation, the people said". And remember, the analysts are talking about 2008 profits of US$160 million - almost equivalent to Global Sources' total revenues.

...and what will they spend it on?

Today's South China Morning Post reports (behind its irritating firewall, sorry) that the institutional portion of Alibaba's IPO is over-subscribed by 50 times. Surprise, surprise. There's nothing else much new in the story which doesn't repeat the suggestion in the weekend FT that the pricing is "relatively undemanding"....for Martians perhaps.

The SCMP does say that " says it will use HK$1.57 billion of the offering's proceeds for strategic acquisitions and business development". This, of course, pours fuel on the already raging fire of speculation of who they will buy. The gossip in the exhibitions industry is that Kenfair is considered the most likely candidate despite Alibaba's protestations that it is not interested in running exhibitions. I actually have my doubts and suspect that, if they do any acquisitions, they may surprise us.

Friday, October 19, 2007

Reed Exhibitions China boss moving on

Congratulations to Dan Londero who, after 3 years running Reed's China business will be moving to London to head up the International Sales Group. He will take a seat on the RX Board in this role, according to an announcement from Chairman Mike Rusbridge.

When Dan took over in Beijing, the company had a relatively small business and was definitely 'boxing below its weight' in the industry there. He told me the other day that they now have 350 people in China and what is widely regarded as a pretty strong business.

His successor in Beijing will be coming from elsewhere in the region.

There's also change down in Australia too (which Londero ran before moving to Beijing). Reed has announced that Debbie Evans will take over there as CEO in January.

Wednesday, October 17, 2007

ad:tech presentation

I'm not sure if this will get distributed, so I thought it might be of interest to readers to see the presentation I gave at the ad:tech conference.

Please feel free to reference this but I'd obviously appreciate acknowledgment if you choose to use our data.

Tuesday, October 16, 2007

News from China

I was going to try to blog from the ad:tech conference in Beijing. Running around all day today, I only managed to make it to the session in which I was speaking, so I would direct you to Thomas Crampton who is blogging feverishly and fully on the proceedings here. Great job!

Meanwhile, my friends at VNU Exhibitions Asia have announced the return of Michiel Kruse as Director International Business Development. He was with the company in Shanghai from 2000 - 2005 before branching out to launch his own golf show. CEO David Zhong says "In his new role Kruse will focus on the relations with international customers, partners, agents and media and on further expansion of international activities" and proclaims himself "thrilled" that Kruse has returned.

The Chairman of VNU Exhibitions Asia, Jimé Essink will be heading off to take up the reins at CMP Asia on 1st November.

Thanks, by the way, to the ad:tech organisers. I won an iPod in their lucky draw at the reception this evening. In the words of the late, great Frankie Howard, my flabber has never been so gasted.

Update: B2B panel chairman, Eddie Choi, has also blogged on the conference today. There's even a photo of our session. Thanks guys, you're all making this very easy for me: 3 sentences and a link. That's lazy man's blogging.

And more: Marketing in the age of Multitasking.

Monday, October 15, 2007

Ali-IPO price set

Reuters is reporting that the IPO will be priced in the HK$10 - 12 range and that it will raise US$1.32 billion as a result. So much for my punt last Tuesday that it would be $8.88.

The Reuters piece goes on to note that "the indicative price range represents a price-to-earnings multiple of 40 to 48 times the syndicate earnings forecast for 2008". That means the company would have to make $150 - 160 million in profits next year, almost double what Goldman Sachs is forecasting for it this year.

I trust there are some money printing machines for sale on These growth targets look awfully steep for a company earning real money in the real world from real live exporters who are operating on wafer thin margins.

FT's going to the wrong party

It may be the great bastion of British capitalism and it may be pink, most certainly not red. But, we don't expect the Asia edition of the Financial Times to commit basic gaffes on significant issues such as the structure of the Chinese government. And, they make the mistake twice on the same page.

The "Week Ahead" section on today's back page suggests that Hu Jintao is hosting "the National People's Congress". No he's not boys. The National People's Congress is China's toothless apology for a parliament which passes its laws. What Hu is hosting is the 17th National Congress of the Communist Party of China. The meeting may be just as boring, but, given that the CPC still basically controls all key decisions in China, is actually much more important than the NPC over which Prime Minister Wen Jiabao presides.

Tut, tut, boys. Too much staying up late watching the rugby I fear and not enough time checking your facts.

MICE media mayhem

Actually, it's not that bad, I just couldn't resist the 3rd "m". However, I was interested to see my friend Kenny Coyle popping up as editor of a new magazine, Mix (the "i" is upside down in the logo). It's always a good sign that the economy is heating up when travel-related media start to proliferate.

Mix joins Kenny's former magazine, Haymarket's CEI Asia/Pacific and TTG MICE from my former colleagues down in Singapore. They all focus primarily on the corporate meetings and incentives elements of business events (the "M" and the "I" of the MICE acronym), competing vigourously for hotel advertising.

If you've already clicked on the Mix hyperlink above, you'll see it takes you to Panacea Publishing, the company spun off from Euromoney in 2005 to publish Business Traveller. I met the boss in Singapore in July: Julian Gregory led the MBO and I'm pleased to see this relative newcomer of a company doing well. Its Asia operations are run from Hong Kong by another former colleague of mine, Peggy Teo.

I have worked with people involved in all three of these publications, so wish them all well. However, it's hard for me to believe that this relatively niche market has room for 3 competing magazines in Asia. Who will blink first?

Update: Thanks to Kenny for setting me straight. There are actually 4 magazines in this space in Asia. Reed's TravelWeekly group in Singapore still has its Events magazine which I have to confess I'd forgotten about.

Thursday, October 11, 2007

Oh, what a week it's been. Thank you Jack

...and quite the day yesterday. Look at the chart showing the take-off of both Global Sources and Ninetowns on NASDAQ yesterday. And remember, the market's been flatt-ish this week. At one point, Ninetowns was up 70% on the week!!

It seems that the smart money (which immediately excludes mine) has finally determined that the Alibaba halo effect is going to focus a lot more attention on these two. I wonder which others might benefit? Suggestions in the comments box please.

Wednesday, October 10, 2007

Suspensions all around

As far as we know, Kenfair's shares are still suspended with acquisition deadlines pushed out to Friday (12 October). Now we see that the other Hong Kong listed exhibitions business, Info Communication, parent of Eddie Leung's Paper Communication, has also suspended its stock "pending release of an announcement in relation to a potential disposal of shares by a substantial shareholder of the Company, which is price sensitive in nature".

I wonder if they're related or if there is a separate reason for both these transactions taking place at the same time? We shall see within a few days I suppose.

Indian e-commerce boom forecast

Both and VentureWoods report on the latest Internet and Mobile Association of India (IAMAI) report which forecasts a 30% boom in e-commerce from 2006/07 to 2007/08. Contentsutra notes that this will be driven by "strength in the classifieds, subscription and downloads businesses" while VentureWoods comments that "the high base effect of online travel is coming into play (almost accounting for 65-70% of the market)".

Highlighted sectors include:

  • Online travel: up 27%
  • Online classifieds: up 52%
  • Paid content: up 50%
  • Digital downloads: up 50%
  • Online retail: up 30%
The paid content line there may catch some our publisher readers by suprise. It's from a pretty low base: Rs30 (US$7.6 million) crores is predicted, from Rs20 crores. Online travel, by contrast is predicted to hit Rs7,000 crores (US$1.783 billion).

Tuesday, October 09, 2007

The money-go-round gets confusing

See if you can work this out: Yahoo!, which owns 39% of Alibaba Group is, according to Dow Jones, going to invest $100 million in the IPO. Now, as we reported earlier, 73.5% of the listed stock will belong to Alibaba Group. Now, unless I'm being thick (always possible), that means that $28.665 million of that effectively goes straight back into Yahoo!'s control.

On another piece of idle speculation, what betting that the offer price is HK$8.88? They have been reportedly looking to raise US$1 billion for a while. The leaked term sheets are talking of selling 858.9 million shares. That equates to US$1.164 per share which comes out at HK$9.00. Investors will love $8.88.

Watch out, your term sheets are slipping

A Dow Jones piece from Hong Kong claims to be based on a leaked copy of the Alibaba IPO term sheet. Highlights:

  • Alibaba, it says, will sell 858.9 million shares, equivalent to 17% of its business-to-business unit's enlarged share capital.
  • Only 26.5% of the shares in the IPO is new stock not traded privately before the offering.
  • The rest, therefore, comes from Alibaba Group which will use the proceeds to develop its newer, unlisted businesses such as Taobao.
  • The global share offering will be launched on Oct. 15, with the listing on the Hong Kong Stock Exchange expected Nov. 6.
  • Revenues are expected to be Rmb2.03 billion (US270 million) with net profits jumping 74% to Rmb622 million (US$82 million).
Not everything listed on the Alibaba sites (or, to be fair, other similar ones) are quite what they claim to be. In six days time, we'll know whether this was based on an authentic Ali-term sheet won't we.

Monday, October 08, 2007

XFML ties us in knots

My colleague Mark Cochrane has been struggling manfully for the past two weeks or so to keep up with the twists and turns of developments of Xinhua Finance and its NASDAQ-listed subsidiary Xinhua Finance Media. Friday, we decided to push ahead and publish the report on which he'd been working for our Asia Business Media Tracker service. I think he's done a great job on untangling the rather complicated web of events and businesses.

Inevitably, however, Saturday's FT sees a report of a major new development there: the sale of the Glass Lewis shareholder advisory firm for $46 million. The report notes that the company bought Glass Lewis just a few months ago for $45 million. I fear that the $1 million 'profit' will just about cover the transaction costs...if they're lucky.

XFL Founder and CEO Fredy Bush is quoted as saying “We believe this transaction is in the best interests of both Xinhua Finance’s shareholders as well as Glass Lewis employees and clients.” I'm sure they'll feel happy to see that water flowing under the bridge and get on with running what is, in my opinion, one of the best business information operations in the region.

Friday, October 05, 2007

Facebook for events?

I have written about Facebook and Asia's media industry a couple of times (most recently here). To be honest, I remain unclear whether it has any value beyond the truly social and amusing. It's certainly an addictive interface.

The now very occasional TSMI's Trade Show Marketing Report blog reports on a Facebook app (widget) directly aimed at events. It notes that Event Connector "is basically a widget that announces to the world that you're going to some event and will compile a list of friends and friends of friends on Facebook who have also stated their intent to attend the same event. You can also place the widget on TypePad and Blogger blogs".

Along with the blogger, I am a bit sceptical of this impact of this on mainstream trade shows. But, heh, who knows?

Update: this is obviously on other people's minds too. An interesting post here on the Web 2.0 Asia blog with some experience from Korea which pre-dates MySpace or Facebook.

Next hurdle safely cleared

This blog is becoming a bit of a one trick pony with its slightly obsessive focus on Alibaba's IPO. However no apologies for that: it will certainly be by far the largest ever B2B IPO in Asia along with a rash of other superlatives that I'm sure we'll be hearing more of in the coming days.

Anyway, on to the point of the post: today's South China Morning Post (and, I think it really is them this time, not Bloomberg) reports the following:

  • Alibaba "secured in-principle approval from the Hong Kong stock exchange yesterday for a US$1 billion initial public offering".
  • The company was asked to submit additional information to the stock exchange's Listing Committee because "the committee was concerned that Alibaba might face internal competition in the search engine marketing business".
  • The expectation of a listing some time this month is repeated.

Thursday, October 04, 2007

Reuters targeting Indian farmers

We wrote just the other day about Reuters advertising-supported India service. We thought that relying on advertising was probably smart in this market where getting subscribers outside a very limited market of high-end financial services users will be very tough.

No we see them taking a different approach with the launch of a mobile information service for Indian farmers "Reuters Market Light". The press release notes that "Successfully trialled since April 2007, the service already has over 7,500 farmers signed-up and is being actively supported by The Government of India". It adds "Reuters will be developing Reuters Market Light, from an information service, to a full mobile news, information and price facilitator".

The trial in Maharashtra was free. The company is now going to try a monthly fee of Rs60 (US$1.50). It will be interesting to see how many of those 7,500 keep going and how many sign up from other places. A very interesting test of the mobile business information concept in a challenging, developing market.

Running like a Swiss watch

Our good friends at Alibaba, not content with all the excitement of the impending IPO, are now setting their sights on Europe and have opened a new Switzerland. The Tribune de Genève reports Vice President Kenneth Liu saying "Europe is already one of the biggest markets for the company “and I see the day coming where a major share of trading in Europe will take place on our website”". Nothing short of ambitious these guys.

12 employees in Geneva will cover "key customers targeted in Britain, Italy, France, Turkey, Germany and Dubai" the report says. Lucky them. Nice place. Not cheap!

Wednesday, October 03, 2007

Ali-IPO "this month"

Somebody at the South China Morning Post appears to be confident in their belief that Alibaba's IPO will take place this month. Although the plan to make a Hong Kong listing is public knowledge, the exact timing has been a closely-guarded secret. But a Business Post 'fluff' piece (i.e. not real news and sorry, the link's only good for subscribers) on Morgan Stanley CEO John Mack says the following:

Mr Mack was determined to make Alibaba the centrepiece of Morgan Stanley's drive to become No1 for the first time in the market for initial public offerings in Hong Kong.

When Alibaba raises US$1 billion this month, it will be at least the 10th non-state mainland public offering arranged by the world's second-largest securities firm this year, bringing Morgan Stanley's share of the market to about 25 per cent, more than its two competitors combined.

That seems pretty clear. Surely, the Morgan Stanley PR people who placed the article didn't slip up and reveal the timing did they?

Correction: Somebody at Bloomberg appears to be confident in the date being this month. That story is popping up all over the place (e.g in Australia and here's the Bloomberg original).

Monday, October 01, 2007

B2B web sites - where to look for 'real' data

Regular readers will know that we've written on the topic of the inadequacies of our reliance on ratings (most recently here, back in April). The main problem we have is that really don't see any better alternatives.

The China Web 2.0 Review blog has an interesting post today on this topic. It talks about the potential to use search engines to compare web sites' popularity. The basic principle appears to be that the more times people have searched for a particular site would indicate (a) that it is more popular than others and (b) that its traffic may be comparably higher. Those who rank poorly on these tests would, of course, argue that it's simply because those doing the searches are not regular users and that may be a fair point.

The article refers to Baidu Index, Google Trends and Yahoo Buzz. Play around with them. I got some interesting results which not be entirely popular everywhere.

"Auntie" buys Lonely Planet

This isn't really a business media story, but it caught my eye and it's a holiday here today anyway, so travel-related tales are de rigeur. There are few organisations in the world associated with the staid establishment than the BBC. There are few publishers which have captured counter-culture chic and made scads of money out of it than Lonely Planet.

So, imagine our surprise to see that BBC Worldwide has bought 75% of the offbeat guidebooks company from founders Tony and Maureen Wheeler. The Asian twist here is that the company is headquartered in Melbourne.