Tom Online (NASDAQ: TOMO) announced its financial results for the third quarter ended September 30, 2004. The company voiced optimism for the future, as it said this last quarter was a troublesome one.

Wang Lei Lei, Chief Executive Officer and Executive Director of Tom Online, said in a prepared statement, "I am very pleased that we have gone through a tough quarter with record high revenue achieved. A crucial part of the success was due to the growing popularity of our 2.5G products which firmly demonstrated our first-mover advantage in that particular sector. The remarkable growth in online advertising revenues also showed that TOM Online is on the path to monetize its internet assets, which have a large following of young and trendy consumers in the country."

While online advertising revenues grew by 194% to US$2.4 million year-on-year and now comprises 8% of total revenues, total revenues grew 37% to US$31.4 million for the third quarter from the same period in 2003.

Net income for the third quarter of 2004 was US$7.3 million, representing an increase of 9% from the same period in 2003. Net income margin narrowed to 23% for the third quarter, compared to 29% for the same period in 2003. The

decrease in margins was in part due to a higher cost of services such as content acquisitions and portal-related business as the Company continued to invest in enhancing its branded content and portal offerings.