Taiwan's online advertising growth is expected to slow to below 50 percent in 2001 from an earlier estimate of 105 percent as businesses cut advertising spending amid an economic downturn, the quasi-official Institute for Information Industry (資策會) said yesterday.
The institute's Market Intelligence Center (MIC,
It revision comes after many Internet portals failed to sustain much growth in first-quarter revenues, which mostly came from online advertising.
"The current recession has taken a big bite out of Taiwan's fledgling online advertising market since this year's growth is expected to fall under 50 percent, sharply lower from 150 percent in the preceding year," said MIC senior analyst Chen Chun-liang.
Taiwan's advertising on the Internet had been growing at some 100 percent each quarter before the Internet bubble burst last year, he said.
"As many businesses are tightening their advertising budgets, the Internet is among the last places where they would want to spend their money," said Chen.
The industry may have hit bottleneck at a time of the slowdown, but it shows tremendous potential for high-flying growth in the foreseeable future, he said.
"There's plenty of room for online advertising to grow because it currently accounts for a tiny fraction of the country's overall advertising market, which has a capacity of US$100 billion to US$120 billion a year," he said.
Taiwan's Internet users are expected to exceed eight million people this year from 6.3 million last year, according to MIC.
Indeed, the Institute has begun to make inroads into China, apparently attracted by the mainland's huge cyber market potential.
In its first ever cross-strait exposition of electronics market vision and cooperation which opened in Shanghai Tuesday, the Institute said it has successfully served as an e-commerce "matchmaker" for linking between TBCommerce Taiwan, an affiliate of the US-based TBCommerce, and the China Internet Incubation Center, an operation under China's Ministry of Science and Technology.
TBCommerce, which has actively tried to edge into China's Internet market in recent years, is mainly comprised of American-Chinese talents who have worked at AT&T and Bell Laboratory.
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