XFMedia Acquires 30-Year China Youth Net Advertising Rights

XFMedia (Nasdaq: XFML), a leading media group in China, announced today that it has obtained 30-year exclusive advertising rights to the China Youth Net web portal “youth.cn “, one of China¡Ã‚¯s top youth websites, and 50 associated sites and channels with a total of five million page views daily.

Under the agreement, XFMedia will be able to sell advertising into and offer content for all of these sites, including http://sports.youth.cn . XFMedia will also have the right to set up 600 new advertising billboards on up to 120 university and college campuses and to organize events, including those on university campuses, in the name of China Youth Net.

XFMedia CEO Ms Fredy Bush said, “XFMedia plans to link this agreement to its broadcast strategy, with particular focus on streaming sports content, which has high interest levels amongst the key demographic of university students, who are eagerly wooed by advertisers.”

“The websites and outdoor media assets provide a focused channel to reach the educated, upwardly mobile demographic that is at the heart of XFMedia¡Ã‚¯s business model,” Ms Bush said.

A report from Morgan Stanley in June states that Internet users in China now outnumber those in the US and will total 300 million by the end of this year. The report said that the majority of Internet users in China are under 30 years old and that the Internet is the primary way they receive content.

The report also said that the Internet is powering a huge growth in content consumption amongst young people in China. A quarter of all China Internet users have college degrees, compared to only 3% of users of “old media”, and have spending power that appears to significantly exceed that of average Chinese consumers.

Richard Young, Managing Director of Sports for XFMedia, said, “the young people in China today want to have a wider selection of sports programming. These sites and channels will allow us to reach this audience and entertain them with different sporting competitions including those from major international leagues.”

The website youth.cn, is one of nine officially designated news portals by China¡Ã‚¯s central government, and has been granted an online audio and video license by SARFT (the State Administration of Radio, Film and Television). The portal youth.cn and its 50 associated sites and channels include a wide variety of content for visitors including news, sports, online shopping, chatrooms and blogs. XFMedia will handle all advertising on all parts of the portal.

The agreement for China Youth Net is for 20 years plus an option of a further 10 years covering exclusive advertising, as well as content, billboards, and events rights. The agreement on billboards on up to 120 campuses is for 15 years and covers universities in Beijing and the central city of Wuhan. China Youth Net is owned by China Youth League, which is a key organization within the Chinese government structure with about 75 million of members by the end of 2007.

XFMedia will make an initial cash payment of US$3.5 million and issue 2 million ADS upon signing the Agreement. XFMedia will make a further cash payment of US$1.5 million and 2 million ADS if certain conditions are met.

Xinhua Finance Media (“XFMedia”; NASDAQ: XFML) is a leading media group in China with nationwide access to the upwardly mobile demographic. Through its synergistic business groups, Broadcast, Print and Advertising, XFMedia offers a total solution empowering clients at every stage of the media process and connecting them with their target audience. Its unique platform covers a wide range of media assets, including television, radio, newspaper, magazine, outdoor, online and other media assets.

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