SecProbe.io

December 23, 2011
 Via U.S. Mail

Mr. Wilfred Chow
Chief Financial Officer
SearchMedia Holdings Limited
Floor 13, Central Modern Building
468 Xinhui Road
Shanghai, China 200060

Re: SearchMedia Holdings Limited
Form 20-F for the fiscal year ended December 31, 2010 Filed June 30, 2011
  File No. 333-158336

Dear Mr. Chow:
 We have limited our review to only your fina ncial statements and related disclosures and
do not intend to expand our review to other portions of your documents. In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
 After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have additional comments  Form 20-F for the fiscal year ended December 31, 2010

 Item 5 Operating and Financial Review and Prospects, page 41

1. Since a substantial amount of your consolidated  operations are attribut ed to your variable
interest entity, please provide the following disclosures:
a. Your assumptions, risks and uncerta inties in accounting for VIEs and
consolidating the operations of the VIEs.
b.  A condensed consolidating balance sh eet, income statement and cash flow
statement, presented in tabular form, for the most recent periods presented.  The information should be in sufficient detail  to allow investors to understand the
assets and operations that are not subject  to involvement with the consolidated

Mr. Wilfred Chow SearchMedia Holdings Limited December 23, 2011 Page 2

 variable interest en tity, so investors may understand the uncertainties that could
cause the reported financial information not to be necessarily indicative of future
operating results or financial condition.
c. a discussion of risks and uncertainties th at may result in deconsolidation of the
variable interest entity.

Consolidated statement of operations, page F-6

2. Revise to present the “loss on impairment of goodwill and intangible assets,” “loss on
impairment of fixed assets,” “loss on aba ndonment of lease” and “loss on disposal of
fixed assets” within loss from operations.

3. We note that revenues increas ed in 2010 when compared to 2009; however, we note a
decrease in revenues from VIEs in 2010.  Tell us  the reason for the significant decrease in
revenues from the VIEs in 2010 as compared to 2009.

Notes to consolidated financial statements, page F-9
1. Principal activities, organization and basis of  presentation, page F-9
VIE arrangements, page F-9

4. Disclose any substantive kick-out rights of  the VIEs to unilaterally terminate the
contracts and also disclose how the contract can terminate and whether the VIEs can
force termination (e.g., VIEs can exit w ith payment of termination fee).

5. Disclose the significant activities of the VIEs that are covered by the contractual
arrangement, considering limitations in scope to  a particular set of activities or phase of
entity’s life cycle and limitations in length of  term or conditions that could result in
shortened term (e.g., must VIEs agre e to extension of fixed term?).

6. Disclose uncertainties and risks th at may be encountered, such as:
• VIEs may breach the contractual arrangeme nts for various reasons (e.g., dispute,
dissatisfaction with contract terms, be tter opportunities outsi de of contractual
arrangement),
• Agreements may not be enforceable for various reasons (e.g., equity pledge
agreements were not registered, l ack of recognition by PRC government),

Mr. Wilfred Chow SearchMedia Holdings Limited December 23, 2011 Page 3

• PRC government may restrict activitie s of operating entity (VIEs), or

• PRC government may prohibit contra ctual arrangements altogether.

7. Describe any change in facts or circumstances  that change the activities of the VIEs or
nature of WFOE’s involvement:
 Agreements terminated and equity pledge agreements were not registered,

 Dispute between VIE owners and WFOE, or

 Government intervention.

8. Please expand the disclosure of your basis fo r consolidation to in clude all significant
judgments and assumptions made in your anal ysis pursuant to ASC 810-10-50, including:
• Significant judgments and assumptions made in determining whether to
consolidate VIEs or disclo se involvement with VIEs;

• Nature of restrictions on consolid ated VIEs’ assets and carrying amounts
of such assets;

• Nature of, and changes in, the risks a ssociated with involvement in VIE;

• How involvement with VIEs affects reporting entity’s financial position,
financial performance, and cash flows;

• Policy regarding how net income is a ttributed to noncontro lling interests;

• Whether owner of OpCo are diffe rent than owners of WFOE;

• Description of significant terms to contracts (i.e., length of term/remaining
term, renewal provisions, penalties fo r operator to get out  of contract);

• Description of how contract terms grant power to direct significant
activities and right to economic returns; and

• Whether enforceability of contracts represents significant judgment/assumption.

Mr. Wilfred Chow SearchMedia Holdings Limited December 23, 2011 Page 4

4. Acquisitions, page F-18

 I. 2010 acquisitions, page F-18

9. We note that the equity owners of Xhejia ng Continental are entit led to contingent
consideration based on a predetermined earn- out formula applied to audited operating
results through December 31, 2010 and 2011.  Pl ease disclose the details of the pre
determined formula so the readers can determine the amount and timing of future payments.   Please provide us w ith your proposed disclosures.

10. We note that you recognized the consideration at  fair value based on best estimate. Please
disclose how you determined the fair value of  the contingent consideration including the
methodology and assumptions used.  Furt her it is unclear how you accounted for
subsequent changes in the fair  value of the contingent c onsideration.  Tell us how you
complied with paragraph ASC 805-30-35-1.

II. 2008 Acquisitions, page F-19

11. We note that in 2008 you completed the acquisiti on of several businesses.  We also note
that most of the purchase consideration for these acquisitions is contingent pursuant to
earn-out agreements.  For each of the 2008 acquisitions please provide a detailed discussion of the contingent considerati on original and amended agreements. Your
disclosure should include the methodology used  to determine the amount and timing of
past and future payments and whether you are required to pay cash or stock. Please
provide us with your proposed disclosures.

12. Tell us whether any of the acquired entitie s “ex-owners” became employees of your
company.

13. It is unclear to us why you were required to pay contingent consideration and then
immediately recognize goodwill impairment. Revise your disclosures on page 46 in
MD&A to explain the rationale behind the contingent considerat ion in light of the lack of
an increase in fair value of the reporting units during the peri od covered by the contingent
consideration. Please provide us with your proposed disclosures

Mr. Wilfred Chow SearchMedia Holdings Limited December 23, 2011 Page 5

 Please file all correspondence over EDGAR.  We urge all persons who are responsible
for the accuracy and adequacy of the disclosure in  the filing to be certain  that the filing includes
the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules
require.  Since the company and its management  are in possession of a ll facts relating to a
company’s disclosure, they are responsible for th e accuracy and adequacy of  the disclosures they
have made.                In responding to our comments,  please provide a written st atement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

 You may contact Ivette Leon, Assistant Chief Accountant, at (202) 551-3351or Carlos
Pacho, Senior Assistant Chief Accountant, at (202) 551-3835 if you have questions regarding
comments on the financial statements and relate d matters.  Please contact me at (202) 551-3810
with any other questions.
Sincerely,
 /s/ Carlos Pacho for  Larry Spirgel Assistant Director