With 3 successful IPOs on NASDAQ, China leads the world in the race of digital signage networks.
Digital signage is an emerging industry enabling the replacement of traditional printed posters by state-of-the-art flat panel displays. ROI analysis clearly indicates the effectiveness of the new technology over the investment period.
In 2005, China's leading digital signage network Focus Media (NASDAQ:FMCN) led the world to file the first IPO in the digital signage industry. Over 80,000 digital signs inside lobbies and other public areas in China deliver eye-catching advertising to millions of Chinese viewers each day. Its stock peaked at 66.30 in 2007, growing more than 200% since its IPO.
Two more IPOs in 2007 gave China a clear lead in the race. AirMedia (NASDAQ:AMCN) specializes in grabbing the attention of China's wealthiest: the air travelers. With over 16,000 displays in China's top airports, AirMedia is a great media for promoting China's luxury products. Another digital signage visionary player VisionChina (NASDAQ:VISN) follows with its IPO in December. Boasting a network of over 26,000 displays in buses, VisionChina builds a network where viewers spend longer time than the other two digital signage platforms.
The three public companies combined is enjoying a market capitalization of nearly $10 billion.
A fourth IPO by CGEN Media (Proposed NASDAQ:ADTV) was stopped when Focus Media acquired the company in December 2007 for $350 million in cash and stocks. Veterans of the digital signage industry would recall a similar incident when the media group Thomson acquired Wal-Mart's digital signage network operator Premier Retail Networks (Proposed NASDAQ:PRNC) back in 2005, soon after PRN files for the world's first digital signage IPO on NASDAQ.
Perhaps due to the few choices available in the nascent Chinese media market, digital signage is quickly getting the approval of advertisers. It remains to be seen if the same phenomenon will take place in other developing countries. Perhaps more interesting is whether similar business models will be successful in the Western developed markets—it will make a very rare occasions where the East leads the West in the capital market.