Linktone (ticker: LTON) presented at the Goldman Sachs
Internet Conference in Las Vegas last week. Here are key points from a
presentation by outgoing CFO Mark Begert and President and CEO Raymond Yang:
General Company Description
- Interactive entertainment company.
- Services: personal and media, game entertainment, and online and wireless community.
- SMS, WAP, MMS, Java and online games.
- 700 employees in 25 provinces.
- Acquired online casual game company Brilliant.
- Brilliant is #5 in users and revenue in China.
- Acquisition is accretive.
- Announced new CFO.
- Initiated stock repurchase program - confidence in business and availability of cash.
- 30 million wireless users.
- 7.3 million unique paying wireless users.
- Brilliant has 15 million registered users for casual games.
- Wireless - average revenue per user (ARPU) is $0.69.
- Providing wireless community services.
- Will be launching wireless instant message service called iChat.
- Ringtones still incredibly popular and expect continued growth.
- Deliver ringtones through telecom operator platform.
- Non-SMS growth strong.
- Working with telecom operators to increase and improve services.
- Providing content to broadband companies.
- China is largest wireless market in the world.
- Mobile penetration still low.
- Opportunity for PHS and 3D.
- Wireless value added services (WVAS) - optimistic about growth
- See growing number of users and growth in higher margin businesses.
- Plan to capitalize on growing Chinese disposable income.
- Local sales strategy.
- Provincial operator relationships.
- Diversified marketing channels.
- Alliances with international partners.
- Comprehensive service platform.
- Management track record.
- 4 or 5 companies including Linktone have significant critical mass.
- Mobile operators are increasingly more selective about partnerships.
- Gap widening between top players - Sina (ticker: SINA), Tencent,
Linktone (ticker: LTON), Tom Online (ticker: TOMO), KongZhong (ticker:
KONG) - and 2nd tier players.
- Subtle differences between these wireless value added service companies.
- Other than Tencent which has a unique product, none have a killer app.
- TOMO and LTON have broadest service offerings. Others are niche in product and in operator relationship.
- Success is about operating expertise and agility.
- SMS stabilizing.
- MMS, IVR and RBT showing rapid growth.
- Wireless gaming is promising opportunity.
- Rolling out wireless instant messaging - iChat.
- Mobile search and SMS entertainment search engine coming soon.
- Envision interactive entertainment, multi-platform, seamless between wireless and online.
- Muti-user games over wireless and online.
- SMS is here to stay.
- SMS is a powerful marketing tool - can use SMS to promote all sorts of services.
- Linktone wants to be in position to offer services directly to consumers.
- To do this need mcommerce, online payments, and / or debit and credit card processing.
- Newly acquired casual game company Brilliant has some of this infrastructure in place.
Why CFO is leaving his post
- Not going anywhere.
- Will still be involved as director.
- Focus on international strategy.
- New CFO has expertise in financial management - which the company needs now.
Comment: Click here for a link to the audio presentation.