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Linktone Reports Second-Quarter 2004 Results.

Article Excerpt
SHANGHAI, China, Aug. 4 /Xinhua-PRNewswire/ -- Linktone Ltd. , a leading provider of wireless value-added services to mobile phone users in China, today announced its financial results for the second quarter ended June 30, 2004.

Linktone's gross revenues for the second quarter of 2004 were $12.1 million, more than three times the $3.3 million reported for the second quarter of 2003 and up 29% from $9.4 million for the first quarter of 2004. Net income for the second quarter of 2004 was $3.5 million, or $0.13 per fully diluted American Depositary Share (ADS). This was more than four times the $0.8 million, or $0.03 per fully diluted ADS, reported for the second quarter of 2003 and up 24% from $2.8 million, or $0.11 per fully diluted ADS, for the first quarter of 2004. Weighted average ADSs outstanding used in per-share computations on a fully diluted basis increased 30% year-over-year and 14% sequentially.

In the second quarter, the number of paying users per month averaged 6.9 million, up 15% from 6.0 million for the first quarter. Average revenue per user (ARPU) reached $0.58 per month for the second quarter, up 12% from $0.52 per month for the previous quarter.

Linktone's short messaging services (SMS) revenue for the second quarter was $11.0 million, up 19% from the first quarter of 2004. The company attributed the increase principally to its broader mix of marketing channels, expanded sales network and enhanced SMS product portfolio.

2.5G services, such as multimedia messaging services (MMS), wireless application protocol (WAP) services and Java games, and voice entertainment services, such as ring-back services and interactive voice response (IVR) services, together accounted for $1.1 million, or 9% of Linktone's second- quarter gross revenues, up sequentially from 1%.

"We sustained our revenue and earnings momentum through the first half of 2004 by attracting new users from a broader geographic base, migrating existing users to higher-value services and winning customers from competitors," said Raymond Yang, chief executive officer of Linktone. "In the second quarter, our SMS business continued to show strong growth as a result of targeted media advertising and Web site enhancements, new products and product upgrades, and localized sales penetration of second-tier provinces. At the same time, the revenue contribution of our 2.5G and voice entertainment services increased significantly, due to aggressive development and promotion resulting in traction with both central and local network operators."

Yang continued, "Looking ahead...