KongZhong reports drop in Q2 net income

Chinese wireless value-added services and media provider, KongZhong Corp. has announced a drop in its net income.

The Nasdaq-listed company said its net income has fallen to US$39,000 in the second quarter. The company has earned US$7.6 million in 2006 and US$1.56 million in the first quarter, the report said.

Zhou Yunfan, the company's chairman and CEO, said, "The first half was challenging for us given the tough operating environment for wireless value-added services, and we expect that to continue for some time."

However, Zhou is optimistic in the company's wireless Internet business, the report said.

KongZhong's total revenue was at US$16.96 million in the second quarter, in line with the company's guidance of US$16 million to US$18 million. Last year, revenue was at US$30 million in the corresponding period and revenue stood at US$20.13 million for the first quarter.

Mobile advertising revenues had increased by 92% quarter-on-quarter to hit US$223,000.

"We are happy that we have achieved double-digit quarter-over-quarter growth in mobile advertising revenue for the fourth consecutive quarter," Zhou said.

Earlier, the company announced its cooperation with MSN China, to be its sole content provider in China for the news and information channel and mobile games channel. In July also, KongZhong cooperated with Opera Software ASA to develop a "KongZhong Opera" browser solution for Chinese mobile phone users with Kong.net as the default home page.

KongZhong reported that revenue is expected to be between US$16.5 million to US$17.5 million in the third quarter.