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September 22, 2009

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Ad slump puts Focus into red

CHINESE digital advertiser Focus Media, which is listed on the Nasdaq market in New York, reported a second-quarter loss, citing declines in income from ads on the Internet, billboards and in movie theaters.

The company posted a net loss of US$23 million, or 18 cents per share, turning from a profit of US$36.1 million a year earlier.

Revenue slid to US$171.3 million from US$211.7 million.

The company has agreed to sell all its digital out-of-home advertising networks to Sina Corp in an all-stock transaction that was valued at US$1.8 billion last December. The deal is still awaiting regulatory approval.

"We may consider extending the closing deadline for the transaction or altering the deal structure if we don't get approval from the Ministry of Commerce by the end of September," Focus said in a statement.

Assets to be sold to Sina, defined as discontinued operations, showed a 15 percent revenue drop from a year earlier to US$89.2 million.

Continuing operations showed a net loss of US$44.5 million, widening from US$2.3 million in the same period of 2008. Revenue fell 23 percent to US$82.1 million.

Internet advertising sales fell 12 percent from a year earlier to US$66.7 million, and income from traditional outdoor billboard advertising and movie theaters was down 26 percent at US$14.8 million.

The company forecast third-quarter revenue will be between US$126 million and US$128.5 million.


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