Big money from a simple idea

May 12, 2006 by Dave Haynes

Focus Media has quickly become arguably the biggest success story in digital signage, with a sneakernet collection of 1,000s of digital screens in the elevator lobbies of office buildings all over China.

A new story in the Wall Street Journal takes a look at the young guy who pulled it off:

Three years ago, Jason Jiang was an unknown Chinese entrepreneur with an offbeat notion to sell ads in elevator lobbies. Then he persuaded the money men to back him.

Today, Mr. Jiang's company, Focus Media Holding Ltd., has a market capitalization of almost $2.9 billion. Its share price has quadrupled since the company's initial public offering in July on the Nasdaq Stock Market. Mr. Jiang has amassed a personal fortune of more than $700 million, including a 25% stake in his company.

A couple of particularly interesting things about the company:

The screens are not on a connected network. Employees and contractors ride their bikes out to each building, each week, to swap flash memory cards and change the ad cycles. Labour is cheap in China, but the biggest reason for the sneakernet is a government restriction on Internet-based content distribution.

And Focus built out its network rapidly by franchising into secondary cities in China, and then buying the franchises that did well.

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