Linktone shows signs of life

Companies are struggling in China's troubled wireless value added services sector

Revenues at leading independent Chinese mobile services firm Linktone increased to $20.5m in the first quarter, but the company was still unable to turn a profit from the troubled wireless value added services sector.

The quarterly loss of $4.2m was, however, considerably reduced from the $7m loss suffered on revenue of $16m in the fourth quarter of 2007.

Linktone provides a variety of services, including information and entertainment for mobile phone users.

The company recently began acting as the sole advertising sales agent for a regional TV channel in Tianjin, a deal which drove an increase in advertising sales revenue from $1.3m to $4m in the first quarter.

"As we develop this partnership and integrate it into Linktone's business, this will help us strategically and cost-effectively to pursue numerous advertising and cross-selling opportunities," said Linktone chief executive Michael Li.

"We anticipate that continued growth from our media platform will improve our financial performance over time."

Following several lacklustre quarters, Linktone accepted a $68.4m investment from MNC, an Indonesian media investment firm, that gives MNC a 57.1 per cent stake.

"We have successfully completed MNC's strategic investment in April, and are confident that MNC will bring the value and in-depth experience needed to assist Linktone in achieving its success in growing its media platform," said Li.

"Additionally, the cash we received from the transaction better positions us to continue our efforts to execute and implement on our cross media strategy.

"We believe that this synergic partnership will significantly expand our presence in the media space in China."