AdSociety & Tokyu Agency, Japan's 4th Largest Advertising Agency Jointly Announce the Formation of an Internet Advertising, Marketing & Sales Joint Venture

HONG KONG, May 24, 2001 – AdSociety, the first pan-Asian broadband advertising, marketing and sales network and a majority-owned joint venture of PCCW (SEHK: 0008, NYSE: PCW [ADR]) and Tokyu Agency Inc, Japan’s fourth largest advertising agency jointly announces the formation of a new joint venture company in Japan.  Called Kabushiki Kaisha (KK) AdSociety Japan, the joint venture heralds both companies’ full-scale commitment to the Internet and broadband advertising landscape in Japan.

Tokyu Agency is a core member of the Tokyu Group, a 78-year old diversified consumer services conglomerate with annual revenue of US$38 Billion (4.2 Trillion Yen) and employs approximately 108,300 employees. Tokyu Agency has been in operation for 40 years and has over 1,000 people in 7 offices across Japan with Year 2000 annual revenue of US$1.87 Billion.

“At the dawn of the 21^st century, digital technology and globalization of services are opening up a new era in communications.  The introduction of broadband infrastructure will pave the way for more versatile digital media communication methods.  We must be ready to adjust smoothly to these dramatic changes and take precise and swift action to satisfy our clients’ needs,” said Hisahi Nagatoshi, President and CEO, Tokyu Agency, and Executive Vice President & Director, Tokyu Corporation.

“KK AdSociety Japan represents the first-ever equity joint venture established by Tokyu Agency.  We’re extremely proud to be their partner of choice to jointly take lead in the new media epidemic that is sweeping Japan creating many new windows of advertising opportunities,” said Patrick Jonathon Wong, founder and CEO of AdSociety.  “Both companies will contribute its extensive experience and network of customers’ relationships gained from the traditional and interactive media to the table.  Combined, KK AdSociety Japan will no doubt become the leading Internet advertising force in Japan with the goal to assist companies migrate from the old to the new media economy.”

“Armed with sales and media experience in the new economy as well as superb business performance, AdSociety is the perfect partner to form this alliance with.  Tokyu Agency wishes to fully utilize this alliance as the first step forward to attain our global strategies and goals towards a digital economy,” said Katsuhiro Shibata, Manager, International Affairs, and one of the four board of directors of KK AdSociety Japan.

AdSociety will bring its pioneering new media experience including the best in breed online, broadband, wireless and email advertising and marketing solutions, including its extensive global sales networks in Asia, the United States and Europe to the joint venture.  Together, the joint venture aims to bring integrated marketing solutions and services that range from the conventional Internet advertising formats such as banners and e-mail ads to next generation broadband interactive advertising formats such as multi-media, streaming video and TV/web convergence.

KK AdSociety Japan has secured the sales rights of a number of premier broadband websites in Japan, adding to the global repository of online inventories represented by AdSociety’s affiliate network consisting of over 1,000 narrowband and broadband websites. 

Tokyu Agency counts consumer-orientated brands including: Ito Yokado (supermarket), Seven Eleven (Convenience Store), Pepsi and Nestle (food and beverage), Fancl (Cosmetics), Kainz (retail), Lion (toiletries) and NTT (telecommunications) as their major customers.

According to industry analysts, online advertising revenues in Japan amounted to US$425 million in 2000, projected to increase to US$1.6 billion in 2003, and US$3.1 billion in 2005 (Source: Dentsu Inc, Forrester Jan 2001).  According to the Nihon Keizai Shimbun, Japan’s Internet advertising is expected to leapfrog traditional radio advertising to over US$2 billion in 2002.

Japan currently encompasses the second largest wireless market in Asia with a population of 60 million at the end of 2000 and forecasted to reach 98 million by 2003 (Source: Lehman, Brothers). Also, a report by Ovum (November 2000) projects Japan’s wireless advertising revenues to reach US$77 million in 2001 and climb to US$1.95 billion by 2004.  Currently, there are well over 22 million NTT DoCoMo i-mode mobile subscribers in Japan.

KK AdSociety Japan becomes AdSociety’s second announced majority-owned joint venture in Asia.  In November, the company and LG Advertising, the second largest publicly-listed advertising firm in Korea officially launched AdSociety Korea in the world’s largest broadband market.  More recently, AdSociety signed a pan-Asia advertising sales partnership with SkyGo Inc., the US authority in wireless advertising, which includes the provision of pioneering wireless advertising and marketing solutions in Japan.    

About AdSociety

AdSociety, a majority-owned joint venture of PCCW (SEHK: 0008, NYSE:PCW [ADR]), is the first pan-Asian broadband and wireless advertising, marketing and sales network. AdSociety currently provides advertising, marketing and sales services to PCCW-related companies as well as provides pioneering online, broadband and wireless marketing solutions and services to marketers and to over 1,000 member websites.

With operations commenced in June 2000 and headquarters established in Hong Kong, AdSociety has offices in Beijing, Seoul, Shanghai, Singapore, Sydney, Taipei and Tokyo and currently employs over 120 media professionals with a proven track record in pioneering advertising sales for broadcast television and the Internet in Asia. Its founder and management team were part of the core team that pioneered advertising sales for Star TV, the first pan-Asian satellite broadcasting television network (a News Corp company) and were also the core team who pioneered advertising sales for 24/7 Media Asia, the first pan-Asian Internet advertising network (a Chinadotcom company).

AdSociety's investors and strategic partners include Tokyu Agency  (a Tokyu Group company), LG Advertising (a LG Group company), AdForce (a CMGion company), L90 (Nasdaq : LNTY), Interactive Media ContentSuite AG (a Axel Springer Verlag company), SkyGo Inc (a Vanguard Investee), AdClick (a KT Internet company), e-Brilliant (a joint venture between Hong Kong-listed e-New Media and US-listed Brilliant Digital Entertainment), Media Genesis (an Icon MediaLab company), Australia Media Holdings (a SportsWorld company) and B2BWorks. More information on AdSociety can be found at www.adsociety.com.

About Tokyu Group

Founded 1922. With railway as its flagship business, Tokyu Group took the beautiful English town of Letchworth as its model and created Denenchofu, Japan’s most famous upscale, planned residential community. From 1953, the Group began the regional development of Tama-Denenchofu (southwestern part of Tokyo), an upscale community of 5,000 hectare.  The population of this area has excelled 500,000 today.  The inhabitants in this area are highly educated and have high-income level, making them an interesting indicator for future trends of Japanese market.

Through its 78 years history, Tokyu Group currently covers a wide range of business categories including transportation, community development, retailing, resort development, hotel and culture & entertainment, with total annual sales in excess of 4 trillion-yen or 30 billion US dollars. Among these various business categories, the total sale of the retailing category general exceeds 1 trillion-yen or 7.5 billion US$. Accumulated highly valued consumer data collected through this retailing category are also effectively utilized by Tokyu Agency for its clients.  (Head company: Tokyu Corporation, Number of companies in the group: approximately 500, total sales 4 Trillion JPY, total employee 100 Thousand) http://www.tokyu.com

About Tokyu Agency

Established 1961. Originally started from Tokyu Railway lines transit advertising sales. After an aggressive business drive and handling of Tokyu Group companies accounts in the initial 5 years, it has managed to be ranked within top 10 in sales. Continuous growth after then, it is now ranked No. 4 in Japan and No. 17 in the world.

The only ad agency to own home-scan-panel type consumer purchase survey system called QPR (Quick Purchase Report). The abundant consumer data are effectively utilized for marketing and brand management strategies planning.

Tokyu Agency is also acquainted with in-store/point of purchase know-how, through its services to major retailing clients including Tokyu Group companies. Moreover, it has many experiences in culture & entertainment and urban development activities. Hisashi Nagatoshi, President & CEO, hold the concurrent post of executive vice president of Tokyu Corporation.  (Nationwide network: Tokyo Head office and 6 branches, Annual billing in fiscal year 2000: 200 billion-yen, Number of employees: 1,100 approx., Major clients: Seven Eleven, Pepsi, Nestle, ExxonMobil, NEC, NTT, Shiseido, Hyundai Motors, Zurich Insurance, etc. http://www.tokyu-agc.co.jp)

For further information, please contact:

Samantha Chan                                                                    

Director of Corporate Communications

AdSociety Limited

Tel: +852 2509 2236                                                                

Email: Samantha.chan@adsociety.com