Internet news portals eye expansion after gloom

Internet news portals eye expansion after gloom

Fitri Wulandari, The Jakarta Post, Jakarta

All is quiet in the local online media industry after the
dotcom collapse in America emptied out the industry, but months
of restructuring has shifted a handful of survivors from survival
mode to expansion.

As the subsidiary of the giant daily newspaper Kompas, PT
Kompas Cyber Media (KCM)'s strategy is providing news over the
Internet that is accurate and credible. Now it is considering
selling books online as well, KCM operational director Andrey
Andoko said.

"We're still focused on delivering news with high accuracy and
credibility," he told The Jakarta Post last week.

Real time news updates can be found at www.kompas.com, which
attracts about 600,000 to 700,000 hits daily.

This has helped it generate advertisement revenues of Rp 300
million (about US$32,000) a month. Its only e-commerce venture so
far is selling classified ads for Kompas, earning Rp 60 million
per month.

"Since the beginning, we didn't want to go all out, we didn't
want to run out of breath and spoil our chance to grow," Andrey
said.

KCM's cautiousness roots with the slowing growth of Internet
usage in Indonesia. The Indonesian Internet Service Providers
(APJII) said growth of Internet users was slowing after doubling
every year for the past three years.

For this year, APJII has said the number of people using the
Internet would reach just 5 million from 4.2 million in 2001.

M-Web is another major online media player and is a subsidiary
of South-Africa based telecommunications and Internet firm Myriad
International Holding (MIH).

It burst onto the local scene with a string of acquisitions of
local news portals since 2000, combining Satunet.com, Astaga.com,
and kafegaul.com.

The three local websites continue to operate independently but
need strict cost cutting measures to prevent them from collapsing
altogether.

Like KCM, M-WEB relies on advertisements for its revenue and
has also what it calls "value added features" for which users
must pay. One feature allows browsers to download mobile phone
ring tones or news, provided however that the mobile phone
handset supports technologies such as Wireless Application
Protocol, better known as WAP.

Page hits stand at 1.6 million a day, according to an M-Web
executive who declined to be named.

He did not say how much the company made it terms of
advertisements and e-commerce revenues, but said M-Web planned to
develop its value added features to boost its bottomline.

"The business climate isn't very good because of the stagnant
growth in Internet users ... so it's rather difficult right now
but there is a chance of an upturn," the source said.

KCM's Andrey agreed that with conditions like this, it was
best to refrain from aggressive expansion plans.

"Unlike the newspaper, TV or radio industry, the online media
industry is still immature. People are unfamiliar with this form
of media. However once they get to know it, we can expand our
business," he said.

Indonesia's leading online media, Detik.com, has also felt the
brunt of the dotcom crash. Last year Detik.com closed down
inefficient business units and laid off a number of staff.

However chief editor Budiono Darsono said the website was now
aiming for a richer content in partnership with several
publishing and media companies.

It also planned additional features to provide revenue next to
those from advertising, he said.

He said over the past three months, advertising revenue had
increased almost 200 percent to Rp 1.1 billion.

Boediono attributed this to several companies shifting their
advertisement spending from other websites to Detik.com.

Detik.com had 1.7 million hits per day, he claimed.

However, any expansion plans were on hold pending its internal
restructuring, he added.

"Until the end of this year, we'll keep strengthening our
online and web services; starting next year, however, we're ready
to venture into other businesses," he said.

Budiono, as did Andrey and the M-Web source, warned that even
though many competitors had folded since last year, the small
share of advertisement spending over the Internet required the
remaining players to improve their quality further.

"Indeed there are only a few players left and there's hardly
competition but we have to do something to stay in the business,"
Andrey said.

Budiono added the battle was now in the inside of the company
rather than outside. "And this is more difficult."