by winston » Fri Jan 23, 2015 5:16 am
not vested
Tencent awaits moment for WeChat ads
Tencent (0700) has conducted an internal test allowing advertisements to appear in WeChat's "Moments" or "Circle of Friends," the popular's app's equivalent of Facebook's News Feed, which is predicted to contribute 10 billion yuan (HK$12.5 billion) of annual income to the internet giant.
"The minimum advertising fee will be 5 million yuan, and current target customers in the early stage will be confined to car and consumer electronics, computer and communications [companies]. It's not open to just any brand," a Tencent staff member told mainland-based National Business Daily. The report has not been confirmed by Tencent officially.
Anyone on Moments will have to see the ads. "To ensure a good user experience, if the user ignores the ads, they will vanish by themselves in six hours. The user can also choose to close the ads at the right top of the window," Wechat Team said. Ying Hao, analyst at Yuanta Securities in Shanghai, said the move is unlikely to result in customer loss as loyalty is high and no competitor can pose a threat to its price.
Deutsche Bank expects Tencent to officially open Moments for advertisements in the second quarter. The Moments advertisements will contribute 1.7 billion yuan in 2015, 4 billion yuan in 2016 and 7.6 billion yuan in 2017.
Barclays predicts Moments will be the big income engine for Tencent. But as Tencent needs to maintain the user experience, it is in no rush to commercialize Moments, and cell-phone ad income will not see obvious contribution until the second half of the year.
It gave Tencent an "overweight" rating and a target price of HK$142.
Tencent shares rose 2.25 percent to HK$131.60 yesterday.
Source: The Standard HK
It's all about "how much you made when you were right" & "how little you lost when you were wrong"