Linktone Revenues & Net Q3 08 to Q3 09

Chinese value-added services (VAS) company Linktone (LTON) reported earnings after the US markets closed on Monday. You may notice that there's some discrepancy between the comparable Q2 2009 and Q3 2008 revenue numbers in their release and my numbers above, which are based on what most financial sites have on record. I'll reconcile these if I determine the financial sites are incorrect. Either way, China Wireless News summed it up nicely by calling the Q3 numbers "dismal". Indeed the company seems stuck in a bit of rut and it's clearly not yet seeing meaningful results from diversification into services beyond the SMS & IVR vending of graphics, tones and fortunes or their international expansion initiatives beyond China. Investors are definitely not impressed and have been punishing the stock all morning... it's been down over 20% for most of the early trading session. I think that in order for Linktone to get back in the market's good graces and provide meaningful competition to China's #1 mobile content player, KongZhong (KONG), they're really going to have to step it up in the mobile games space, broaden their offering of 3G oriented services (like their recently announced MLB video deal) and quickly prove that they can be a relevant player in new markets they're pursuing in South East Asia.

Linktone Hits A Stock Market Homerun With MLB Mobile Video Deal For China

Beijing based mobile entertainment content publisher (and Cabana Mobile Stock Index component) Linktone (LTON) announced a deal with China National Radio Mobile Media that will allow it to distribute video highlights from Major League Baseball games to mobile phones throughout China. This comes on the heels of a company announcement late last month that it had entered multi-year deal with Major League Baseball Advanced Media (MLBAM).

"This partnership is an early example of the many possible product applications arising from Linktone's recently announced exclusive license for Major League Baseball related interactive media rights. Baseball will be coming to the portable screen in China via 3G technology, enabling baseball fans to follow their favorite teams and players anywhere and anytime," said Hary Tanoesoedibjo, Chairman and CEO of Linktone.

The chain of events indicates to me that despite having secured the rights from MLBAM, the company needed to get approval from (and partner with) the national broadcaster before moving forward. As those who have done business in China know well, "partnerships" with the appropriate government agencies or appointees, and staying in their good graces, is critical to success/survival in that market (just ask MonsterMob). Linktone, which has been around since 1999, definitely knows the ropes and has a long and impressive track record of bringing Western content to Chinese mobile users.

Investors clearly love this news and Linktone's stock is up over 20% in late trading. Let's hope, for all the parties involved, that the country's nascent 3G networks are capable of delivering a compelling user experience and that Chinese fans get addicted to baseball on the very small screen.