LETTER TO THE EDITOR
SingTel push into digital ads is risky
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<!-- end of header //--> TWO years after investing US$321 million in Amobee and still not turning in a profit although revenue doubled in 2013, SingTel now decides it needs to spend a further US$359 million to buy another two companies, Adconion and Konterra Technologies, to boost its digital business. No mention was made whether these two acquisitions are profitable yet.
In 2013, Amobee bought Gradient X for US$15 million. Amobee will have to face giants like Google and Facebook as it builds its share in the global mobile advertising market and its chairman has indicated that it will be another three to five years before it contributes to SingTel's bottom line.
It may even have to buy more companies in the interim if the recently appointed CEO's comment that "it had to make the transformatic acquisitions so that it can increase in scale and scope" is an indication of what SingTel shareholders can expect.
SingTel expects Amobee to be its money spinner in the mobile advertising business but it should not lose sight of the growing lobby against "push" type of advertising, like using SMS, which has even led to Singapore introducing the Do Not Call registry for those who do not want these advertisements in their handphones.
SingTel push into digital ads is risky
print |email this article
<!-- end of header //--> TWO years after investing US$321 million in Amobee and still not turning in a profit although revenue doubled in 2013, SingTel now decides it needs to spend a further US$359 million to buy another two companies, Adconion and Konterra Technologies, to boost its digital business. No mention was made whether these two acquisitions are profitable yet.
In 2013, Amobee bought Gradient X for US$15 million. Amobee will have to face giants like Google and Facebook as it builds its share in the global mobile advertising market and its chairman has indicated that it will be another three to five years before it contributes to SingTel's bottom line.
It may even have to buy more companies in the interim if the recently appointed CEO's comment that "it had to make the transformatic acquisitions so that it can increase in scale and scope" is an indication of what SingTel shareholders can expect.
SingTel expects Amobee to be its money spinner in the mobile advertising business but it should not lose sight of the growing lobby against "push" type of advertising, like using SMS, which has even led to Singapore introducing the Do Not Call registry for those who do not want these advertisements in their handphones.
