BEIJING: People.cn Co Ltd, the online platform of the People’s Daily’s, has seen first-half revenue growth drop by 33.11 percentage points, after the suspension of its Internet lottery business.
According to its latest half-year figures, total revenue hit 725 million yuan ($113.8 million) during the period, a rise of 17.07 percent from a year earlier. At the same stage last year, it recorded growth of 50.18 percent. Net profit for the first half of this year was 58.28 million yuan, a 39.42 percent fall year-on-year.
The report suggested the profits were slashed after increased investment in the site’s mobile services, and the suspension by the authorities of the Internet lottery business, Okooo.com.
Okooo’s revenue was 46.08 million yuan, a 48.61 percent fall year-on-year. The lottery subsidiary was created in 2013.
Income at the company’s overall mobile business, however, increased by 44.66 percent compared with the same period last year, mainly from its short messaging service, reading, animation and games activities, despite a 27.98 percent rise in its own operating costs.
Yan Honghui, an analyst at Internet consultancy Analysys International in Beijing, said People.cn’s mobile strategy does not expect to be profitable in short term, but in future does expect to become an essential source of group revenue.
Li Zichuan, a P2P financial services platform expert, said the suspension of Internet lottery businesses has forced many related enterprises to transform.
“Some companies were closed and others turned to financial advisory services－but there are still companies waiting for the issue of operating licenses.”
Li said the government is looking to strengthen its supervision of Internet lotteries, but not put a stop to them altogether, and new licenses are expected to be issued by the end of this year.
People.cn has been expanding its business through multiple channels. In 2013, it bought Guqiang Technology to enter the online reading sector, and last year it acquired the Shanghai-based mobile gaming company, Microbeam.
However, two of its executives were investigated for corruption last month.
