Rivals unite to challenge Sohu Olympic coverage
Mainland internet heavyweights Tencent, Sina and NetEase have formed an alliance to unite their news coverage of next year's Beijing Olympics, setting themselves up against Sohu, the country's second-largest online portal and official internet sponsor of the games.
The Olympic Coverage Alliance formed last week and later joined by 10 more mainland internet companies would combine their media resources for the Olympics, Tencent, Sina and NetEase executives said at a ceremony in Beijing, according to media reports.
The alliance is challenging an impression that Sohu has exclusive rights to Olympics news reporting over the internet while it also seeks to grab a larger share of Olympics-related advertising spending.
The mainland online advertising market grew 43 per cent last year to 4.63 billion yuan, according to Beijing research firm Analysys.
The Olympics might add an extra 10 to 20 percentage points to internet advertising growth next year, said Richard Ji, executive director of Morgan Stanley. The US bank believes the total internet advertising market will grow 40 per cent to 50 per cent next year.
The three alliance leaders will be joined by Tom Online, MSN China and China Yahoo. The websites of Phoenix TV, Chinese blog Bokee and ChinaByte subsidiary Yesky.com will also join the alliance and so will Oak Pacific Interactive's online community Mop.com and forum content aggregator and search provider Qihoo.
Hexun, a consumer financial information website owned by Hong Kong-listed SEEC Media Group and finance website China Finance Online complete the alliance list.
The formation of the alliance 'dispels some claims that Sohu made to advertisers', said Dick Wei, JP Morgan's China internet analyst.
Sohu has given its role in the games a high profile since it was selected as the official internet sponsor by the Beijing Organising Committee in November 2005.
Under the agreement, Sohu will construct, operate and host the game's official website, www.beijing2008.com. It would also enjoy advantages over other websites, such as the right to have first interviews with athletes, exclusive participation at official events and first-hand access to Olympics information, said Mr Wei.
'However, it does not mean other websites cannot report Olympics news - an impression some advertisers were falsely led to believe in,' said Mr Wei.
'The alliance may negotiate with the Olympic committee for additional rights, for example using the Olympic logo.'
The addition of competition also means greater marketing costs for Sohu.
'If Sina, Tencent and NetEase cooperate for a large-scale promotion campaign, users may turn to the alliance sites for Olympics news and Sohu may need to increase marketing spending to match,' said Mr Wei.
On the other hand, the alliance might also entice advertisers to increase online spending during next year's Olympics, benefiting the whole market, he said.
The remaining uncertainty over the next year's Games coverage was who would get the mainland real-time online broadcasting rights with the Olympics committee still to name its pick, said Mr Wei.
The winner's prize will be big. Millions of people would be watching the Olympics live online from their offices or as they go about their business because the alternative, watching television, was less possible as the games would be held during working hours, said Mr Wei.
The alliance dispels Sohu claims of exclusive rights to games coverage
Value of the mainland online advertising market last year 4.63b yuan