THE Shanghai Media Group and Intel Corp announced a strategic cooperation deal yesterday that will see the world's biggest chip maker investing US$12 million through a venture capital arm to help SMG improve its broadband TV services.
The investment helped SMG, the biggest local media conglomerate, to expand into the new media sector, which companies like China Telecom are also focusing on.
Intel Capital, which announced a new fund of US$500 million for China on Tuesday, will provide SMG US$12 million for software and service research, product development and platform design.
"The Chinese new media is transforming the traditional media industry. Its new methods for broadcasting, communication, and consumption demonstrate strong potential," said Li Ruigang, SMG's president.
SMG has launched a diversity of new media services including Interactive TV, mobile phone TV, IPTV (Internet Protocol TV) and a broadband online TV subsidiary SMGBB.
People can access to SMGBB for free online video if they agree to see advertising content.
China's online advertising revenue is expected to hit 6.87 billion yuan (US$981.4 million) in 2008, double the level of 2005, and this is widely seen as a challenge to newspapers and TV, according to Analysys International, a Beijing-based IT consulting firm.
Shanghai Telecom, the city's biggest fixed-line phone operator, has also gone into the IPTV sector recently. Users can enjoy a two-year free package if they watch IPTV eight times a month, according to China Telecom, whose traditional fixed-line phone business decreased for the first time in 2007.
Intel's new fund will target mainly wireless broadband, technology, media, telecommunications and "clean tech" sectors, said Arvind Sodhani, president of Intel Capital.