Dentsu plans Chinese online ad joint venture

TOKYO (Reuters) - Dentsu Inc, Japan's biggest advertising firm, said on Tuesday it plans to set up an Internet advertising joint venture in Beijing with Focus Media Holding Ltd to tap China's booming market.

The joint venture, to be established at the end of March, will be capitalized at $9 million, with Dentsu taking a 67 percent stake and Focus Media the rest, Dentsu said in a statement.

"Western mega-advertising agencies like the WPP Group Plc are making significant investments in China's Internet ad market," a Dentsu spokesman said. "We are teaming up with Focus Media in order to compete against them."

Dentsu will be consolidating its existing online ad subsidiaries in China into the venture. It said the venture's first-year sales are targeted at around $47 million.

In China, where Internet users are rapidly growing at an annual rate of more than 50 percent, the $1.3 billion Internet ad market is expected to nearly triple by 2010, Dentsu said.

(Reporting by Yoko Kubota; Editing by Mike Miller)