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KINIBIZ Businessman Tong Kooi Ong’s online news portal FZ Sdn Bhd is understood to have secured a conditional licence issued by the federal government, enabling it to publish a daily free newspaper, sources say.

It is understood that Tong, who also owns The Edge Communications Sdn Bhd, which publishes the weekly business newspaper The Edge , daily business newspaper The Edge Financial Daily and Personal Money , among others, had been applying for a publishing licence for a daily general paper since 2008, and has finally gotten it now.

KiniBiz understands that the licence is for a general paper is rigged with conditions, but what these conditions are remain unclear.

“Initially it was slated to happen prior to the general election. It’s been a long, long wait for Tong and The Edge (Communications), but now it’s finally happening... just a few things - the conditions - to sort out,” the source said.

Tong’s executives, who are presently part of his newspaper arm, however claimed that they were not aware of FZ obtaining its licence anytime soon.

KiniBiz could not get hold of Tong’s media lieutenant, Ho Kay Tat.

It is noteworthy that FZ is not parked under The Edge Communications. The reason is that Tong has been looking to float the shares of The Edge Communications on the Bursa Malaysia, and FZ being a new online news portal could weigh valuations down, as it struggles to post profits in its fledgling years.

FZ, which stands for Financial Zoo, first came about in October last year, and is likely to take a considerable length of time before posting any decent financials.

Despite the rising popularity, the problem with online media sites is its inability to monetise the large number of viewers it can get as advertising is limited by space constraints.

A check on the Companies Commission of Malaysia revealed that FZ’s financials are yet to be filed.

However with the publishing licence, FZ could post profits earlier and be injected into The Edge Communications, to strengthen its earnings.

Tong has been a proponent of an asset-light media company, preferring to even outsource its printing, and not buying any buildings.

The Edge Communications for its financial year ended December 2011, posted after tax profits of RM9.7 million from RM56 million in sales.

malaysian media congress forum 030407 sun newspaper However it is noteworthy that previous attempts by Tong to apply for a licence were thwarted by the likes of Utusan Melayu (M), and Star Publications (M), which are both politically connected to the ruling Barisan Nasional coalition. The Sun which is owned by well-connected businessman Vincent Tan Chee Yioun’s Berjaya Media are also understood to be uneasy with the award of the licence to FZ.

While Utusan is 49.8% controlled by the United Malay National Organisation or Umno, Star is 42.5% controlled by the Malaysian Chinese Association or MCA. Tan, meanwhile, is known to be close to a whole host of politicians.

Back in the 90s Tong was known to be a close associate of former deputy prime minister Anwar Ibrahim, who is now head of the opposition. How close his ties with Anwar are these days is not clearly known.

Tong was in the wilderness

For a period when Anwar fell from grace, Tong was in the wilderness, and was forced to sell his flagship Phileo Allied Bank to Malayan Banking, under a consolidation exercise.

He was also in the spotlight recently when he divested his property development arm Sunrise to Khazanah Nasional-controlled UEM Sunrise (formerly UEM Land Holdings).

While FZ could create waves, it would appear to be at the expense of The Star , the flagship of Star Publications, and the largest selling English daily in Malaysia.

azlan The Star ’s main competitor is The Sun .

At one time Tan and Tong were partners, and The Edge and The Sun were sister publications both helmed by Ho, but a fallout resulted in Tan and Tong going their separate ways in 2008.

Back then, under Ho’s stewardship, The Sun was made a free paper, and ate into The Star’ s market share and gained considerable ground, as the second largest English daily. But since then The Sun has lost much ground, and Tan is said to be looking to sell about 30% of his interest.

NONE It is also noteworthy that Ho ( left ), prior to re-joining The Edge Communications as its publisher at the end of last year, had a short stint of about two odd years (July 2010 to end 2012) with Star Publications, where he played a key role in the company as its managing director and chief executive officer.

According to Star Publication’s annual report for FY2012, the combined print and digital daily circulation of The Star , as verified by the Audit Bureau of Circulations, averaged 298,288 copies between Jan 1, 2012 and June 30, 2012, compared with 288,529 copies in the same period of 2011.

The Star ’s readership meanwhile according to Nielsen’s Consumer and Media View survey showed its weekly readership at 1.839 million in 2012, compared with 1.515 million in 2011.

However things haven’t been going too well in 2013, prior to and after the general election in May.

Judging by its financials, The Star’ s grip on advertisers may be loosening.

For its six months ended June this year, The Star Publications net profits were RM54.6 million from RM471.9 million in revenue. In contrast to the corresponding period a year ago, The Star Publications net profits were down close to 29% while revenue fell 10.9%.

On its outlook, The Star Publications said, “Advertising expenditure has remained soft but is expected to gradually pick up in the second half of this year as sentiment improves with the seasonality effect… The company and the board of directors expect the business environment in the media industry to remain highly challenging in 2013, and will do its best to ensure a satisfactory performance for the financial year ending Dec 31, 2013.”

A problem with The Star has been its slant or at least the perception of being pro-government, while another issue has been its online version (which is being viewed for free), cannibalising its subscriptions.

Other than The Star , the media company has four radio stations, RedFM, CapitalFM, SuriaFM and 988 FM and television company Li TV Holdings Ltd. Collectively however, these two segments only make up some RM28 million of Star Publications RM471.9 million six-month revenue.

Other businesses Star Publications owns include event management and online portals, which have yet to make a significant impact as well.

Star Publications closed at RM2.60 last Friday, inching up two sen.

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