The social networking internet platform in China announces its unaudited financial results for the second quarter ended June 30, 2012. The service performs well in online gaming but its advertising activity seems to suffer from the financial crisis.
- Total net revenueswere US$44.8 million, a 47.5% increase from the corresponding period in 2011.
- Operating losswas US$22.2 million, compared to an operating income of US$0.7 million in the corresponding period in 2011.
- Net loss attributable to Renren was US$24.9 million, compared to a net income of US$0.8 million in the corresponding period in 2011.
- Adjusted net loss (non-GAAP) was US$21.8 million, compared to an adjusted net income of US$2.3 million in the corresponding period in 2011.
Internet users are becoming mobile users
The online game business dra the activity : revenues were up 122.1%, at US$22.5 million. Joseph Chen, The RenRen CEO, also outlines the better-than-expected performance of the Nuomi. The group-buying business net revenues were US$3.6 million for the second quarter of 2012. The CEO recognizes that brand advertising remained challenging : Online advertising revenues were US$15.1 million, a decrease of 10.5% from the corresponding period of 2011. This bad performance was due to macro conditions, increased competition and the continued migration of our user traffic from PC to mobile. This migration is one the key challenge for facebook.
priceless games ?
The Chinese social network user base reached over 162 million compared to 124 million at the end of the second quarter in 2011. Monthly unique log-in users also increased to 45 million in the month of June, representing 31% of year-over-year growth. According to RenRen, the increase in cost of revenues for the second quarter was largely due to increased bandwidth investments and increased costs of Renren's recently launched games.