 According to KongzhongĄ¯s financial results for Q3, its total revenue reached 17.12 million dollars, a decrease of 31.7% YOY, or an increase of 0.9% sequentially. Compared with Q2 2007, revenues from 2.5G business, including WAP, MMS, Java etc, declined by 12 percent. The fallen was mainly due to China mobileĄ¯s new policies that implemented since May 2007. These policies including displaying GPRS fees while downloading WAP products and removing Kongzhong and other third-party WAP service providers from mobile phone built-in menu. Revenues from KongzhongĄ¯s 2G businesses (including SMS, IVR, CRBT, etc) were 11.29 million US dollars, down 19.6% YOY, or up 8% sequentially.
2G businesses growth improved KongzhongĄ¯s total revenues
KongzhongĄ¯s revenues mainly come from 2G and 2.5G businesses. Revenues from 2G business accounted for 65.9% of total revenues, while revenues from 2.5G business accounted for 32.3%. According to iResearch, the rebound of KongzhongĄ¯s performance mainly due to the improve of promotion and sales of 2G business. In addition, mobile advertising and Java business increased significantly in Q3, 2007. Their sequentially growth rate respectively reached 18.8% and 34.9%
Mobile advertising continued growing with the advantage of WAP portal
The value of wireless media has been gradually been accepted by advertisers. Mobile adverting became a new growth point of revenues. In Q3 2007, KongzhongĄ¯s revenues from Mobile advertising increased 250% YOY, 18.8% sequentially to 270,000 US dollars. Mobile advertising occupies a low percentage, only 1.5 percent, in the total income of Kongzhong. But with the rapid development of mobile advertising market, it will became an important source of KongzhongĄ¯s profit.
Java is expected to be the backstop of 2.5G businesses
KongzhongĄ¯s income from Java business is 850,000 US dollars in Q3 2007, an increase of 100% YOY, or 34.9% sequentially. Mobile game gradually becomes the main form of entertainment. With the coming up of 3G era, mobile online game will greet an unprecedented opportunity and will promote the mobile game business of main SP providers. According to iResearch, Java business only accounts for 5% of KongzhongĄ¯s total revenue and is expected to become a main source of KongzhongĄ¯s revenues.
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