Yang Ning: KongZhong Greatest Success to the Wireless Internet Portal Upgrade

Last year, China's mobile operators have to keep a low profile or high-profile or to the "comprehensive information service provider", a large scale value-added services to the upstream areas of forward and with the content providers (CP) direct cooperation, the scenery has unlimited mobile value-added services providers (SP) of space for an unprecedented squeeze profits.

In July 2006, the Ministry of Information Industry launched against the SP "second confirmation" new policy requiring users must again confirm whether or not a purchase order business relationship can be. The domestic policy in a short period of time led to several Nasdaq-listed SP - KongZhong, Hurray, Linktone were varying degrees layoffs. KongZhong three consecutive quarter total revenue fell, in accordance with United States generally accepted accounting principles, KongZhong 2007 first quarter net profit of 1.56 million US dollars, up down 82%; second quarter net profit more drop of 10,000 US dollars.

Let outsiders surprised that, as of September 30 the third quarter fuels virtually all of the KongZhong quarter net profit also rose to 540,000 US dollars. Chairman and CEO Zhou Yunfan said that the third-quarter rebound performance, "mainly due to our mobile advertising revenues continued to grow, and our continuing implementation of effective cost control measures." KongZhong expected, do the same trend, the fourth quarter of this year revenues in the third quarter based on an increase of 1 million US dollars.

In competitors huge losses, or to withdraw from the market or on the lower reaches of content providers combined with the restructuring of the roads, this had on MMS and mobile games download large profits earned special SP, now in the wireless Internet portal hope that the mobile phone advertising harvest was on the third quarter earnings to the bright lights of its greater lung power - its mobile advertising revenue for five consecutive quarters of steady growth, reaching 265,000 US dollars, sequentially increased 19%.

"The recent two years, KongZhong greatest success is achieved from traditional to wireless Internet portal SP upgrades, and 'free content + advertising' that the traditional media and Internet proven profitable model transplanted to the wireless Internet." KongZhong president Yang Ning said.

In May 2007, China Mobile introduced a series of new policies, including the WAP mobile phone users to download product, indicate GPRS service costs reminded, and will KongZhong and other third-party service providers from China WAP mobile phone built-in menu customization deleted . Affected by this, KongZhong quarter 2.5G services (including WAP, MMS and Java technology) revenue fell 32 percent. Zhou Yunfan said at the time: "what we can do is to focus on new product development and promotion, to compensate for the losses caused by the new policy." He said to boost the morale of investors is expected to cell phone advertising business development within the next two years in strength, and ultimately make up for the companies in the wireless value-added services in the loss.

Compared with the wireless value-added services, from wireless Internet business operators by the relatively small number of restrictions, KongZhong that end has invested tens of millions of dollars, and good to fulfill the mission of the business also maintained a strong momentum of growth. 2007 first quarter, KongZhong wireless advertising sales than the fourth quarter of 2006 increased nearly 30 percent. KongZhong is expected in 2007 its advertising revenue from mobile phones will reach 1 million US dollars a year to achieve five times the growth of three to five years, wireless Internet business to mature, "can contribute to the whole company profits."

"We believe that the wireless Internet has just started, like a 2000 Internet the same." Yang Ning said, "China has 500 million mobile phone users, Internet phones have the opportunity to fully develop into a major industry." As early as last year, then brand KongZhong one of the media sector KongZhong wireless Internet has changed to the Department, this year in May since mid-KongZhong "mobile phone Internet, on the previous KongZhong" advertising landing Beijing main streets, subway stations and bus body. KongZhong firmly believe that wireless advertising with Internet advertising will embark on the same road.

The successful structures in the interactive entertainment platforms, information and community, and other 150 channels and columns, KongZhong formally proposed this year, media strategy, established the contents of the adhesion to win users to the users win profitable advertising revenue ideas, and in this line of thought under its comprehensive integration of product and market resources.

June 29, KongZhong announced an agreement with MSN China to become Mobile Messenger 3.0 information channels and mobile games channel in China's exclusive content providers. July 19, KongZhong announced with the famous phone browser developer Opera cooperation and common development for the Chinese mobile phone users, "KongZhongOpera" browser solutions, and KongZhong wireless Internet portal Kong.net as default Home. In September, KongZhong also formally announced a cooperation with the NBA, the NBA launched the official website of Chinese mobile phone.

Yang Ning told reporters, currently KongZhong phone advertising clients have included Nike, Red Bull, Blackberry, Motorola, Nokia and BMW, and other famous brands. "With the passage of time, various sectors of our well-known businesses will be interested in the advertising services," founder of the Chinaren, Sohu question for two years in the Yang Ning sure, "We do not anxious to wireless Internet, if you want to do media , inputs certainly very great. me to do when Chinaren and Sohu, have experienced a prolonged period of market development, spent 90 million dollars Sina, Sohu spent 60 million dollars to a profit. that many companies do not have confidence in the money, successively left, the results remain have become very great company. "

Source: 商务周刊 Dec. 8, 2007