Embattled Chinese mobile value-added services firm Linktone (LTON) reports its unaudited financial results for the first quarter ended March 31, 2007 show a GAAP net loss per fully diluted American Depositary Share of US$0.14.

CEO Michael Li said, "Although we continue to face a challenging regulatory environment in our wireless value added services business which has primarily caused Linktone's financial underperformance over the last several quarters, we are beginning to see the benefit of investments we are making in our cross-media strategy. We believe our cross-media strategy will enhance our business by focusing on the development of new and traditional media channels while using our core wireless platform to reach a broader audience, and we feel confident this strategy will propel the company's future growth in China's new media space. This is a period of great opportunity for Linktone as we begin to take advantage of China's booming television and advertising market."

Linktone recorded revenues of US$14.2 million, compared with US$14.0 million in the fourth quarter of 2006 and US$23.0 million in the first quarter of 2006. It also had GAAP net loss of US$3.4 million, compared with net income of US$0.4 million in the fourth quarter of 2006 and US$2.3 million in the first quarter of 2006.

"Advertising spending in China continues to be a secular growth story, with total advertising expenditure over US$10.2 billion in 2005, and it showed no signs of slowing in 2006. Furthermore, growth trends in China's media market continue to show favorable demographics as evidenced by strong economic, disposable income and consumption numbers." said Li. "We believe that other major events in China, particularly the Beijing Olympics, the anticipated full scale roll-out of 3G wireless standard, and the World Expo Shanghai in 2010, will also spur future growth in this market. With a robust advertising market in China yielding strong growth year-over-year, we believe that bundling our wireless service expertise with new and traditional media creates enormous cross-selling opportunities and further diversifies our revenue stream."


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