Conflict Arises in Sohu, 24/7 Asia Pact

[August 30, 2000–HONG KONG] The meaning of the phrase “exclusive” seems to be at issue in an advertising alliance signed by China portal Sohu.com (Nasdaq:SOHU) and 24/7 Media Asia last week.

A joint statement issued August 21 by 24/7 Media Asia, its parent company, chinadotcom corporation (Nasdaq:CHINA), and Sohu.com said, “Under the agreement, 24/7 Media Asia will become Sohu’s exclusive global agent to sell its advertising space.” The statement was subtitled, “Exclusive Global Advertising Strategic Alliance with chinadotcom’s 24/7 Media Asia,” in a version available on chinadotcom corporation‘s Web site at press time.

The matter came to light Wednesday when Sohu.com and Hong Kong-based advertising network Admomentum issued a statement announcing Sohu’s appointment of AdMomentum “as Overseas Advertising Sales Agent,” it said. “This is the third non-exclusive appointment made by Sohu.com this year. BMC Media was appointed first in June, followed by the appointment of 24/7 Media earlier this month,” the statement said, as found on PR Newswire.

AdMomentum representatives did not respond to requests for comment. Sohu.com representatives in Beijing could not be reached.

BMCMedia.com’s vice-president for business development Alex Jordan said, “We have received it in writing from Sohu that we still have a full agreement with them and that everything is working fine.” Jordan said that Sohu’s explanation was, “24/7 has the same deal that [BMCMedia.com] have and it is not exclusive.” He said that their contract with Sohu.com included worldwide representation for the markets in which BMCMedia operates, excluding China. Jordan said they had not altered their efforts on behalf of Sohu in any way.

chinadotcom and 24/7 Media Asia representatives postponed comment until clarification from Sohu.com management is received regarding the term “exclusive,” and whether AdMomentum and other contracts pre-date last week’s agreement.

24/7 Media Asia is a wholly-owned subsidiary of chinadotcom corporation. AdMomentum is a member of DCP Holdings Limited (SEHK 497), formerly known as Ocean Information Holdings Limited.

–By Steven Schwankert, Managing Editor, asia.internet.com