Chinese e-commerce firm Alibaba.com Corp announced yesterday it
has entered the fray of Internet advertising with an online
platform for websites and advertisers to match up.
Its new unit - Alimama.com - which has gone through 100 days'
trial operation, will compete with other Chinese online ads
alliances led by Baidu.com and Google Inc in attracting small
websites, including bloggers' spaces, to help them make money out
of their traffic.
"We are just offering a practical business model for the small
sites to grow," said Jin Jianhang, vice president of Alibaba.
Jin added that the small Websites "deserve a better model" than
relying on the commission from search engines by serving as their
extended advertising space, as Alimama's model is more transparent
in that it allows small Websites to deal with advertisers
Baidu, China's No. 1 search engine, and Google have teamed up
with hundreds of thousands of smaller Chinese websites that joined
their ads revenue sharing program. The small sites display the ads
from the search engines' customers on their sites and are paid by
the number of clicks.
It has become increasingly important for the search engines to
boost sales. For Baidu, traffic acquisition cost in the third
quarter accounted for 12 percent of total sales, up three
percentage points from a year ago, due to a rising sales
contribution from its approximately 200,000 Baidu Union
Meanwhile, Alimama copies the business-to-business trading model
of Alibaba's already successful division Alibaba.com Ltd. Alimama
charges eight to 15 percent of the ads value.
Advertisers such as Bank of China and Citic Bank as well as some
online game companies have signed contracts with Alimama to place
ads on the site.
It has 150,000 small and medium Websites and 135,000 bloggers'
spaces ready to take placements.
(Shanghai Daily November 21, 2007)