MEDIA-I: Rumours of Delirium layoffs rattle Taiwan

TAIPEI: The fragile confidence of Taiwan's interactive industry has

been dealt another blow by a fresh round of layoffs, this time at

recently merged web shop DeliriumCyberTouch. The company laid off 10

people, after earlier saying that it expected to grow by 50 per cent in

Taiwan this year.

The merger, which took place in early May, saw the 80 staff of Delirium

join forces with the 20 of Cybertouch. The company has been dogged by

recent rumours of massive layoffs, causing panic in the country's

internet community. General manager Linda Yu admitted that there had

been a streamlining, but said that 10 people had gone, rather than the

more extravagent figures that had been rumoured.

Last January, director of the Institute for Information Industry's

Market Intelligence Centre (MIC) Victor Chan announced that 80 per cent

of Taiwan's dotcoms had folded or were lingering on in the hope of being

acquired.

Even worse, Chan expected only 10 per cent to survive.

Then, on June 12, MIC revised its forecast for the year's online

advertising growth, cutting it from a cheery 105 per cent to a gain of

less than 50 per cent. In 2000, online ads totaled NTdollars 870 million

(USdollars 25.4 million).

MIC added that most online ads will be placed on Kimo, Yam and Yahoo and

other large portals, leaving most content sites in the cold.

"We are already halfway into the year and the industry outlook is poor,"

said Jack Lee, business director, OgilvyInteractive. "All we can hope is

that it holds at the current level.

"It's a necessary restructuring," Lee added. "Many of the experienced

marketing people who entered the field during the boom are realising

that the concepts and methodologies are different. To make money, there

has to be more than clicks. There also has to be some serious bricks and

mortar involvement."

The industry still has core clients, such as P&G or Unilever, that are

committed to interactive marketing. Other business sectors, such as

telecoms, are continuing to use the web aggressively, said Lee. But the

drying up of online advertising is forcing most consultancies to move

away from the front-end to the back-end of the business, and focus on

technology.

Managing director of Ionglobal Taiwan, Mike Rogero, expects "the major

focus of 2001" to be enterprise information portals. His company has

started its first such Taiwan project for Mercedes Benz.

DeliriumCyberTouch's Linda Yu agrees. "We are seeing a move away from

e-branding and websites," she said. "This year most of the value is

coming from consulting and implementation of applications services."

This general view is shared as well by the advertising community. Soh

Yew Peng, director of interactive marketing at Saatchi & Saatchi, said:

"The age of pure web design and banner production is over, and the new

business model seems to be total integrated internet solutions."