Internet megabrands such as Yahoo!, MSN and Google have been understandably frantic to make an impression in Asia. It is, after all, about keeping up with the lift-off of the world's fastest-growing medium in the world's fastest-growing advertising region.
It was never going to be easy. This vast market remains highly fragmented, and strong local players hold their own in the continent's major markets.
Internet usage is mouth-wateringly high across the region. Estimates suggest that the number of web users in China will have risen by a staggering 30 million this year (to 90 million), while South Korea is the world leader in broadband penetration.
The growth prospects for online advertising are highly encouraging. Over the next four years, MSN expects Asia's share of the global internet ad cake to balloon from 20 to 33 per cent. But, sadly for Bill Gates, no one player can claim regional hegemony. This means that cross-border campaign planning involves cherry-picking the most suitable sites from each country.
"You can't really say there's one website that dominates the region," Alice Manners, the Asia-Pacific director of mOne, MindShare's online media division, says. "Yahoo! and MSN still operate on a market-by-market basis, although MSN does have a regional team who will negotiate across the region for you. Yahoo! doesn't even have that."
The MSN International general manager of sales and trade marketing, Chris Dobson, says that MSN, Yahoo! and Google have all accepted that localised content is the way to generate appeal and site loyalty. "There are a lot of local players who don't let the multinationals have it all to themselves," Dobson concedes.
AOL has yet to gain a real foothold in Asia, while Lycos pulled out of many Asian markets more than a year ago and is no longer a major force.
Whereas Yahoo! typically fully or majority-owns its international operations. It made an exception in Japan with a joint venture with the local outfit Softbank (which owns 52 per cent of Yahoo! Japan). The Japanese market is especially tough for multinationals to crack. EBay withdrew after failing to make much of an impression.
In Taiwan, Yahoo! became the leading portal after acquiring the local provider Kimo five years ago.
In China, three portals command the lion's share. Sina, Sohu and Netease account for more than 60 per cent of China's online adspend. Netease, Sina and another Chinese portal, Tom Online, have developed lucrative wireless content service businesses. Tom Online has also focused on partnerships with content providers. It was the official Chinese site for the Euro 2004 football championships, and has a partnership with ESPN Star to provide English Premier League football content.
In April 2004, Yahoo! entered Chinese e-commerce space when it announced a joint venture with Sina to create the online auctions product 1PAI (pronounced "eee-pie", the Chinese characters mean "get a good deal"). Yahoo! followed this up in June with the launch of the Chinese-language search engine Yisou.
"From what we've observed in the past few years, Yahoo! has had a headstart in wooing Asian audiences," the Mediaedge:cia worldwide client services and solutions managing partner, Connie Chan, says. "It's all about localisation and Yahoo! started earlier than MSN. Yahoo! has more local Yahoo! properties than MSN and also appears to be more aggressive in the promotion of its properties. MSN's approach is more through content partnerships or channels it owns, such as Hotmail and MSN Messenger."
Of course, English-language news-driven sites with print or TV parents have carved out space for themselves in Asia. CNN, The Wall Street Journal, the International Herald Tribune and the technology site CNET are all major players. But these tend to deliver an international audience of "C-level" executives, as Manners puts it.
"Local language is extremely important," she adds. "In Singapore and India, English is fine. But in Hong Kong, Thailand and Indonesia it becomes a problem. In Japan it absolutely has to be Japanese."
Use of search engines is growing strongly and, as elsewhere in the world, Google leads the way. It has a presence across much of the Asia-Pacific region and recently bought a stake in Baidu.com, China's largest search engine. Search, along with gaming and mobile internet, is expected to continue growing vigorously.
Since many of the online ad networks, such as 24/7, Engage, Ad Society and DoubleClick, shut up shop in Asia in 2002, there has been little in the way of central ad packages across the region. Most ads are locally targeted, King Lai, Initiative's chief operating officer for Asia-Pacific, says. "While there is a wide range of content sites in most Asian markets, local portals attract the largest audiences."
The strength of local portals, especially in China, Korea and Japan, has ensured that the multinational players have their work cut out in attempting to build audiences. Putting the likes of Yahoo! and MSN on the media schedule may often make sense - but it is seldom the complete answer.
ASIA'S MOST ADVANCED INTERNET MARKETS
Market Internet Internet Population Broadband Use growth
penetration users (millions) penetration 2000-2004
(per cent) (millions) (per cent) (per cent)
South Korea 55.3 26.3 47.6 73.2 61
Singapore 51.3 2.3 4.5 23.2 78
Japan 44.9 57.0 127.4 21.0 42
Australia 42.6 8.4 19.7 3.7 102
Taiwan 38.2 8.6 22.0 32.3 85
Malaysia 28.6 6.5 22.7 0.4 134
Thailand 7.7 4.8 62.4 0.1 203
China 4.6 60.0 1,300.0 3.0 287
Indonesia 1.7 4.0 231.0 0.3 304
India 1.6 16.6 1,050.0 0.02 270
Sources: Initiative, Business Times, Internet World Stats, Telecom
Regulatory Authority of India,Telechoice. 2003 data.