Michelle Hsu, The China Post

Advertisements on the Internet for the first time recorded a decline in 2001 as the total ad value dropped 4.6 percent to NT$830 million, according to statistics published Saturday by the Market Information Center (MIC) under the Institute for Information Industry (III). The MIC, however, estimate a sharp 34-percent growth for this year on the expected economic recovery and better acceptance for Internet ads among local firms. The annual amount of the ads on the Internet is predicted to surge to NT$1.12 billion for this year. Despite the decline in value, the ratio of the ads on the Internet to the total advertisement market expanded slightly to 1.6 percent last year from 1.5 percent in 2000. This suggests that last year’s decline is much more associated with the worsening business environment last year than with attitudes toward the Internet as an advertising medium. According to the MIC, the total value of the ad market last year fell 10 percent to NT$53.8 billion. Ads in newspapers dropped a staggering 12.44 percent; non-cable TV fell 11 percent; cable TV 8.63 percent; and magazines 9.59 percent. Comparatively, ads on the Internet declined the slightest. The bankruptcies of several dot.com firms constitutes another factor leading to the decline in ads on the Internet.

Among the NT$830 million of Internet ads last year, Yahoo-Kimo took a lion’s share with approximately 50 percent. As the largest Internet portal in Taiwan after the merger between its two predecessors, Yahoo-Kimo is often criticized for slashing the prices of Internet ads, leaving the smaller portals in weak positions to execute countermeasures on a price basis. The sharp discounts for Internet ads may be another major cause of the drop in Internet ad value overall.