Gaopeng Lay-Offs Auger Ad Spending Downturn 1高朋裁员预示网络广告支出或大幅下降

By newsdoug on August 8, 2011

Group selling looks tough for Gaopeng There’s more negative buzz coming from Gaopeng, the group buying joint venture between Groupon and Tencent (HKEx: 700), which, when combined with other industry noise indicates a sharp downturn in online ad spending may be on the horizon. Just two weeks after reporting that Gaopeng had stopped advertising on Baidu (Nasdaq: BIDU) and Google (Nasdaq: GOOG) because they were too costly (previous post), Chinese media are reporting that Gaopeng has begun laying off staff to cut costs. (English article) The reports seem a bit fragmented and indicate a gradual lay offs began as early as April. But what does seem clear is that Gaopeng isn’t gaining nearly enough sales and revenue in China to justify the rapid build-up in its staffing and ad spending since its formation late last year. The latest Gaopeng developments echo similar recent buzz, with e-commerce executives saying competition has become incredibly fierce and unsustainable, and many players will be forced to cut back their advertising spending in the months ahead to keep from losing money. None of this should be surprising, since China now boasts at least three other big group-buying sites that have received major new funding this year (previous post), and the e-commerce space has also become a jungle in a very short time, with names like Wal-Mart (NYSE: WMT) joining a space that was already crowded with big homegrown names like Alibaba and 360Buy. (previous post) This kind of hyper-competition can hardly be comforting for companies that derive a big part of their revenue from advertising spending, most notably Baidu, Sina (Nasdaq: SINA) and Sohu (Nasdaq: SOHU), whose sites are popular with advertisers. I would look for all three of these companies to report sharp slowdowns in revenue growth starting late this year, and some consolidation in both the e-commerce and group buying space, which could see Gaopeng close down as Groupon focuses on more promising growth markets.

Bottom line: Web firms that rely heavily on ad spending will see a sharp slowdown in revenue growth around the end of the year, as advertisers slash spending amid fierce competition.

美国团购网站Groupon和腾讯<0700.HK>合资的高朋团购再传出负面消息，结合业内其它消息来看，网络广告支出大幅下降或初露端倪。两周前有报导称高朋因费用太高已停止在百度<BIDU.O>和谷歌<GOOG.O>的广告投放。目前中国媒体报导称，高朋网已开始裁员，以削减成本。这些零散报导指出，高朋网早在4月就开始逐步裁员。但可以确定的是，高朋网自去年底成立以来，其在华销售和营收表现一般，与其雇员人数和广告支出的迅速增加不成正比。业内近期出现类似情况，电子商务高管称，团购行业竞争白热化，发展变得不可持续，许多团购网未来几个月为避免亏损，将被迫削减广告支出。这些都并不令人惊讶，中国今年至少有三大团购网获得大规模融资，电子商务领域竞争也变得异常激烈，本土已有阿里巴巴和京东网等巨头，而沃尔玛也进军中国电子商务领域。这种激烈竞争让收入主要来自广告的公司很难感到欣喜，例如百度、新浪<SINA.O>和搜狐<SOHU.O>。我预计，今年底开始，这三家公司的收入增长将大幅下降，电子商务和团购网领域都将出现整合，由於Groupon关注更具增长潜力的市场，可能会关闭高朋网。

一句话：由於团购网和电子商务领域竞争激烈，广告商将大幅削减开支，严重依赖广告收入的网络公司营收增长将在年底大幅下降。