August 2008 : Market opportunities and fast growth in Africa and South Asia have led to local ICT company BuzzCity securing US$10 million financing from new investor Naspers, a South African-based media company.

“We’ve seen phenomenal growth in markets in South Asia and Africa and in the coming year, we expect to see this growth to include markets in Europe and the USA." said Lai Kok Fung, CEO of BuzzCity, the Singapore-based provider of global wireless communities and consumer services.

BuzzCity will use the money to extend the market share of its Web property, myGamma.com, and its network of sites. The company’s strategy is to continue expanding the membership base of myGamma, which currently reaches 2.7 million users across 70 countries, according to Juniper Research.

BuzzCity will also focus on developing more user-generated content through member services and applications; investing in applications that maximise partnership opportunities and bringing in more advertisements.

"The common footprints we have make this a strategic relationship for developing our media properties, particularly in South Africa, India and Thailand. We look forward to working closely with the group to ramp up our growth," says Dr Lai.

"The past year for us has also been marked by partnerships with some of the world's leading WAP publishers and mobile digital agencies. BuzzCity has been on an aggressive development programme and secured overwhelming interest from businesses to be part of our growth plans.

"Users are clearly loving what BuzzCity is offering; the number of users has grown exponentially, and traffic to myGamma network of partner sites has exceeded 6 billion pageviews in the first six months of 2008," he adds.

Global market for mobile phone users

Juniper Research recently predicted that the number of mobile phone users globally will increase from 577 million to 1.7 billion by 2013, with applications such as social networking and user-generated content being key drivers for this growth.

Ian Chard, analyst at Juniper Research, says the market opportunity for BuzzCity is clear. BuzzCity's myGamma community has made stunning headway in the mobile social networking space. As an off-deck application, it has successfully applied the D2C business model in an operator-dominated market, and established a strong advertising base that hit 1.7 billion paid ad impressions in July 2008 alone. (D2C refers to the "direct-to-consumer" business, bypassing the middleman.)

Demographically, myGamma serves two distinct audiences: the newly-connected emerging middle class in developing markets, and blue-collar users in developed regions.

According to Dr Lai, BuzzCity first started talking to MIH (the investment arm of Naspers) two years ago. BuzzCity's primary growth driver then was paid mobile services, not mobile advertising as it is now. But Naspers didn't find this business strategy exciting enough.

“By end-2007, our mobile ad business was showing tremendous growth, so I contacted MIH again. Now that our business model had become ad-driven, we spoke a language that media companies understand. It didn't take long for MIH to make up its mind. By the beginning of 2008, MIH signalled it wanted in.”

How will BuzzCity use the money

This investment will enable BuzzCity to expand more aggressively than it would have otherwise, Dr Lai notes.

“We'll put more people on the ground to talk with advertisers and publishers. We can build more localised versions of myGamma. And best of all, we now have the luxury of taking a longer-term view. We can take time to build the brand by investing in marketing and public relations so that more potential business partners know about BuzzCity and the opportunities that exist in mobile social networking and mobile advertising.

“I expect BuzzCity will expand in Africa, Middle East and Latin America, and strengthen our operations across Asia, Europe and the US.”

About Naspers

Naspers is a South African multinational company with operations in print and electronic media. Its electronic business includes pay-television, Internet and instant-messaging subscriber platforms and the provision of related technologies. In print media, its subsidiary Media24 is Africa's largest publisher, printer and distributor of magazines and related products as well as one of its largest newspaper publishers.

Naspers’s main operations are in South Africa, from where it generates more than 70 percent revenues. Other significant operations are in Sub-Saharan Africa, Greece, Cyprus, the Netherlands, the United States, Thailand, Brazil, Poland, Russia, India and China.

In May 2001, Naspers acquired a 46.5 percent interest in Tencent Holdings, the operator of an instant messaging platform in China called QQ, which subsequently developed into the leading business of its kind in China. The company also acquired a 9.9 percent interest in the Beijing Media Corporation in December 2004. BMC is mainly engaged in selling advertising space for the Beijing Youth Daily as well as the production of newspapers and the trading of print-related materials.

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