Saturday, 21 April 2012

Betting on a Winner?

It was very interesting to see People's Daily website raise 1.38 billion RMB ($219 million) in its IPO, more than twice its estimate.

People.cn is the first state media to be listed, selling 69.1 million shares at 20RMB each.

It had originally hoped to raise 527 million RMB to compete with new media companies such as Sina, Tencent and Sohu.com.

It's curious investors are so keen on putting their bets on state media, or maybe they think it's a sure win, as it's backed by the government. However, the whole point of having the IPO was because Beijing wanted to wean state media from public coffers.

Currently people.cn is ranked 49th in visitor numbers in China last year according to ChinaRank, an internet monitoring organization.

That's really pathetic, considering it's the Communist Party's mouthpiece. Or maybe the old school Party members don't know how to go online.

"We need to increase our popularity, expand the range of products and services we offer, reach a wider audience and increase page hits per visitor," People's Daily said in its IPO filing.

How it's going to do that is another story, as we all know Chinese state media organizations aren't the most nimble outlets on the mainland.

While money can buy the latest technology, strong interesting content is vital to get repeat customers, day after day.

Is people.cn up to the task?

We'll have to wait and see, but don't hold your breath.

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