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In China, feature phones still dominant, help drive Internet usage, mobile search

Michael Kan | Aug. 13, 2012
While smartphones have been the craze in China's tech market, feature phones are still helping to drive Internet usage in the country, especially with search. A case in point is Easou, a mobile Internet search company with more than 200 million users in the country, many of whom are using less advanced handsets from Nokia and local Chinese brands.

Advertising revenue in China's mobile Internet market, however, is still small compared to the more lucrative PC-based Internet ad business, said Mark Natkin, managing director for Beijing-based Marbridge Consulting.

Local Chinese media have reported that Easou made 300 million yuan in revenue last year, which the company declined to confirm. In comparison, Baidu made 5.46 billion yuan in revenue in this year's second quarter alone.

"One major challenge is screen size," Natkin said. "It's just not so attractive for an ad to be on a small mobile screen." Mobile phones users in China are also less accustomed to purchasing products with their handsets, and generally only go online to view entertainment news or pornography, two areas difficult to monetize, Natkin said.

To sell more ads, Easou has targeted small and medium businesses in 50 cities across the China, by using its offline sales offices, according to Wang. Asked if he was concerned about competition with Baidu and Tencent, Wang said the landscape of China's Internet market continues to change, allowing new companies to rise.

"If in three to five years, the mobile Internet market rises, then Easou will truly become a magnificent company," Wang said.

 

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