Chinese Internet Sector Growth Rates Accelerate in Online Video, Social and Mobile Advertising

Wall Street Transcript

67 WALL STREET, New York - October 16, 2013 - The Wall Street Transcript has just published its Internet Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Data Hosting Centers - Cloud Computing Secular Trends - Colocation, Managed Hosting and Cloud Computing - Increased Mobile Content Traffic - Chinese Online Monetization Trends - Internet Infrastructure Build - Enterprise Adoption of Cloud Computing

Companies include: E-Commerce China Dangdang Inc. (DANG), SINA Corporation (SINA) and many others.

In the following excerpt from the Internet Services Report, an experienced global internet and telecommunications analyst discusses his outlook for Chinese internet stocks:

TWST: When we last spoke about a year ago, the two areas of the Chinese Internet sector that you highlighted as good opportunities were online video and social advertising. Are those still the areas where we see the best opportunities, and are there any segments that you would add to that list at this point?

Mr. Hellawell: Fast-forward to today, and we are seeing a broader-based and clearer recovery in digital ad spend in general. When we last spoke, many online advertisers were somewhat pressurized from macro issues and other challenges, and as a result growth was mainly focused on the newer, more targeted paradigms such as online video and social advertising. Brand owners, portals and other players in the digital advertising ecosystem cite ongoing macroeconomic improvements as a major reason why advertisers are committing more digital ad budgets.

Online video and social advertising remain two of the faster-growing areas. We are moreover starting to see some encouraging growth in mobile advertising, albeit from still very low levels. The mobile advertising category includes areas ranging from what you would call in-app advertising - the banner ads you would see at the top of a downloaded game on iOS or Android - mobile video prerolls, mobile search, whether doing a search against a digital map or just doing a straight traditional search, and other formats. All of these areas seem to be growing very encouragingly. So in sum, online video, social advertising should grow high-double digits again this year, and they are now being joined by a small but even faster growing set of mobile advertising tools. Even the very traditional kind of desktop banner ads business seems to be recovering slightly. These older venues of online advertising in recent years have become more cyclical; we are seeing a cyclical upswing there.

TWST: The shift to mobile obviously creates a lot of opportunities for Internet companies. What are some of the challenges or developing themes that are coming along with that?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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