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Advertising As Source of Internet Profit Doubted
Two Internet professionals at the Third Asia-Pacific E-Business Roundtable ended in Hong Kong Wednesday pointed out that the Internet companies should not depend their profit on advertising.
"The concept that you can build an Internet company purely based on advertising is completely disapproved now," said Graham Brant, general manager of Microsoft Hong Kong Limited at the two-day meeting, attended by more than 150 senior executives.
"Internet profit should be a combination of transaction fees, subscription fees and advertising fees," he added.
Brant held that Internet is an additional way for the traditional businesses to get to their customers and these businesses are the major force pushing forward the Internet's development.
"The companies started up to be pure Internet companies are indeed facing some major challenges in terms of revenue," he said.
He cited his own company as an example.
"Microsoft, as a business, is very successful for a traditional business. It ran MSN.com, which does not make much profit at present, to promote its products," said Brant.
Khoo Ken Wee, managing director of the Hong Kong CASH Group, which widely adopts Internet technology in its securities business, shared the view of Brant.
"Earning by advertising is not going to be the best way to do on-line business. There should be some sort of transaction engine in the long run to sustain revenue growth," Khoo said.
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