DAVOS-China advertisers balking at long-term deals- Sina CEO
DAVOS, Switzerland |
DAVOS, Switzerland Jan 30 (Reuters) - Lack of confidence among clients is hitting the Chinese advertising market, clouding the outlook for revenue growth this year, the head of Internet media firm Sina Corp (SINA.O) said. J.P. Morgan last week cut its 2009 earnings forecast and price targets for Sina, together with top Chinese Internet search firm Baidu.com Inc (BIDU.O) and Sohu.com Inc (SOHU.O), citing slowing economic growth and advertising revenue.
Charles Chao, Sina's chief executive and president, declined to give a revenue projection for this year, saying there was not "enough visibility" in the present economic situation.
"It's hard to say right now, because if you look at the overall market conditions, obviously there is a lot of caution in the market," Chao told Reuters.
"People are more reluctant to make a long-term commitment or long-term budget for the year, and so we'll just have to see as we go through the year," he said on the sidelines of the annual meeting of the World Economic Forum.
China's advertising market grew by 15 percent in 2008 but could face an abrupt slowdown this year, Beijing-based research firm CTR Market Research said last week.
Chao said he was "reasonably confident" the government would provide significant further support to the economy, which would help advertisers.
"When confidence comes back, people (will be) more willing to spend money on advertising," he said.
Chao said Sina's planned purchase of Focus Media Ltd's FMCN.O core assets for more than 1 billion dollars in shares would help its growth in the future.
Analysts reacted to what could be the biggest acquisition for a Chinese Internet company by downgrading Sina, citing the price tag, integration risks and the shift in corporate strategy.
"Collectively, we're going to have predominant market share in the new media advertising in China," Chao said. "I think the new media no doubt will take more market share in advertising this year and going forward."
He said Sina was not on the lookout for further acquisitions.
For full coverage, blogs and TV from Davos go to www.reuters.com/davos (Reporting by Jason Subler; Editing by Timothy Heritage)
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