Li Xiao

Last week, Focus Media (Nasdaq: FMCN) announced that its Internet business to its subsidiary company Allyes 62% stake sale to private equity investment fund Silver Lake Silver Lake, received $ 124 million.
In March this year, when Focus Media announced that management will be the good Lord MBO, has invested $ 13.3 million 38% stake in the good Lord.
Enterprise official website that description: Allyes is a technical service online advertising, online marketing services and marketing services as one of the effects of professional interactive marketing services company. "We are now the largest Chinese online advertising industry, advertising agency network, is a professional comprehensive interactive marketing solutions provider."
No doubt, people remember, in March 2007, Focus Media to $ 70 million in cash and $ 155 million Focus Media ordinary shares of the acquisition of the good Lord. So, there is considerable difference between the middle.
Of course, logic is on sale I guess, if Jason Jiang said it was not, it is not good.

Capital market environment changes: a period of time, the new media company in a favorable market trend. Financing, advertising coverage upgrade, re-financing, to further improve coverage, listing, through mergers and acquisitions, access to other types of new media companies, and then through physical association, mainly cross-service customers, and invisible association, mainly financial support to enhance the M & A, followed by spin-off, listed ... ...
Of course, this model is ideal, but no longer today's market environment. One reason can be explained, there are too many new media companies, investors' attention is becoming scarce.
September 2008, the good Lord split plan, but that is what the market environment. In the end of the year, a more imaginative plan is to merge with Sina, Focus, Focus Sina attract business, but the good Lord is still retained in the listed company, which is equivalent to achieve the listing, plans were not complete.
Transformation of industrial capital thinking thinking: just as people are always confused in the housing rental ratio as too large seems to explain than to buy a house rental is wrong. In fact, it reflects the thinking and industrial capital of thinking are different. There is no right or wrong between the two, but a cliche, do not fight with market trends.
Capital markets will emphasize the business's market position, while the industry thinking is the key to efficiency. The essence of professional efficiency.
Focus Media CEO Jason Jiang explained, "In this transaction, Focus Media will focus attention on our core business - commercial buildings LCD expanding network, the store network, poster frame and other living area of ​​influence of media platforms."
Although, before the stress, and client resources to promote business on the Internet. But the question here is whether this is the customer's understanding? Focus Media in the first quarter from the Internet advertising service revenue was $ 28.1 million, gross profit of $ 5.7 million, because the proxy nature of the business, gross profit is not high.
Of course there is a problem of corporate executives focus. First-quarter earnings that the number of LCD screen and digital frame has been reduced, mainly due to the Company continued to optimize its network. Undoubtedly, this work detailed and cumbersome.
TV is building a sophisticated model: from the beginning of 2009, amended the capital market's understanding of Focus Media, is actually a revised model for building understanding of television, from the very optimistic to too pessimistic, the new understanding.
Buildings television is television advertising, which means that advertisers do not need to re-create. This advantage is not small, if installed in a taxi LCD, limited to the screen, may have to re-create the advertising and creative - the customer confirmation - change ... ... so will lengthen the period of advertising. Different from other media, building the content of television is not, so there is no content creation costs.
Because Focus Media has been a leader in this field, competitors of similar size is difficult to replicate the network, corresponding to a single party involved in the limited amount of property, so building your TV is not actually put pressure on rents.

Capital market response is very important, Focus Media shares rose 2.2%. Market capitalization of $ 2.44 billion. From the market point of view, this adjustment does not have the assets. You can also expand on what the market value, end of 2007, Focus Media's peak market capitalization of over $ 7 billion, but in July 2005 when the NASDAQ market capitalization of $ 700 million.
The key is innovation and efficiency in the implementation mode, the Internet does have a lot of high-growth areas of the case, but on the Internet, there are also many high-growth case, Focus Media is one, and not high-growth companies in each stage of development are the pursuit of of.
Results, as of March 31, 2010, Focus Media holds a total of $ 598.6 million in cash and cash equivalents.

360 Jason Jiang: Rereading the capital market, Focus Media
http://tech.qq.com/a/20081120/000136.htm