United States Internet giant Yahoo! expects Hong Kong's online advertising market to be worth only US$10 million to US$12 million this year, calling into question the business models of the SAR's swarms of dotcom start-ups.
Although this would represent significant growth from last year's estimated HK$50 million market, the pie would still be far too small to provide substantial cash-flows to support the SAR's myriad dotcoms.
Assuming that Hong Kong's overall advertising market were to stay the same this year at HK$23.65 billion, online advertising would still only account for 0.004 per cent of the entire market.
While the estimates made by different organisations vary, none appeared bullish enough to justify the sky-high valuations afforded to Internet stocks.
Some of the biggest estimates came from the Internet Advertising Bureau of Hong Kong and PricewaterhouseCoopers, which recorded HK$118.32 million of cash-based Internet advertising expenditure last year.
Of this, HK$58 million came from the last quarter of the year, hinting at a strong growth trend.
