Expenses climb and Ku6 sinks into loss
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Nasdaq-listed video website Ku6 Media Co posted a net loss of US$11.8 million in the second quarter after operating expenses for the online video portal rose due to fierce competition.
Total revenue in the second quarter fell 17.6 percent from the same period a year ago to US$8.1 million.
Income from continuing operations, namely online advertising on the video site, doubled to US$2.4 million from US$1.2 million in the first quarter, which however only included February and March as Shanda Interactive Entertainment completed the purchase of Ku6 in January.
But Ku6 made a net loss of US$14.7 million in this segment in the second quarter.
Its operating expenses, including for marketing and general administration, rose to US$5.9 million from US$4.1 million in the first quarter.
"We expect the increase in advertising income to continue as we leverage on our online videos and we're aiming to become a media company that combines high-quality video content," said Kevin Li, CEO of Ku6.
Shanda Entertainment acquired Ku6 through a share swap via its Nasdaq-listed subsidiary Hurray! Holdings in November last year, which marked the first acquisition deal in the Chinese online video industry. The transaction was completed in January this year and Hurray! changed its name to Ku6 Media.
Ku6 said in June it would sell its wireless value-added services to Shanda Entertainment to focus on the online radio and video business.
Shanda remains the biggest shareholder of Ku6 with about 50 percent shareholding.
Ku6 competes with other domestic video sites including Tudou and Youku.
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