According to Cloudary Corp’s(盛大文学) latest filing with the SEC, the online literature service of gaming powerhouse Shanda lost US$ 2.19 million on revenue of 48.18 million in the first half of this year. For Q2 of this year, Cloudary lost US$ 1.64 million on revenue of 27 million.
Cloudary disclosed in the file that its net losses in 2008, 2009, 2010 and first half of 2011 were largely due to copyright licensing cost, head-count related expenses and sales and marketing expenses, while its profitability depends significantly on its ability to control the copyright licensing cost relating to its online business.
It’s noteworthy that the online literature company predicts the online and mobile literature industries in China may not grow as quickly as expected, which leads to the concern over its revenue and business prospects.
Regarding competition, Cloudary listed Zongheng.com, 17k.com, Zhulang.com as well as internet portals including QQ.com, Sina.com and sohu.com as major competitors, while the company actually takes over 70% of China online literature market after a succession of acquisitions.