Cheetah Mobile (NYSE:CMCM), a Chinese internet company that has been actively expanding overseas, saw 24% of total revenues from mobile and 10% from overseas in the third quarter of 2014.
Mobile revenues grew 628% year-on-year. The revenue growth from overseas markets was driven by mobile advertising. Cheetah acquired HongKong Zoom Interactive, a mobile advertising business, in June this year to improve mobile advertising performance. Currently the revenue contribution from HongKong Zoom Interactive is small, according to the management.
The company is building its overseas user base through three free Android utility apps, Clean Master, Battery Doctor and CM Security. Fu Sheng, Cheetah Mobile CEO, said they saw the demand for these utility apps “was strong and even perhaps stronger than most people originally expected” at the latest earnings conference call. Baidu and Qihoo are direct competitors in this category. All three have the same strategy: building a large user base through free utility apps and then to monetize it through advertising and revenue shares from third-party content or service providers.
The company began to monetize the mobile end from the second quarter last year through mobile advertising, adding mobile gaming in the third quarter. Fu says they began testing mobile games for overseas markets last quarter. The company plans to launch more mobile games in the near future, including a female gamer-targeted title which is very popular in China.
Apart from the contributions from mobile and overseas, Cheetah’s product portfolio and revenue model are almost the same as Qihoo’s. Cheetah’s situation in the domestic market is similar to that of Qihoo a couple of years ago, where revenues are primarily generated through online marketing from a small number of advertisers and revenue shares through gaming.
After being a long-time runner-up to Qihoo, Cheetah Mobile’s current goal is to move faster in the overseas mobile market. It set up a business development center in San Francisco and a R&D operations in Taiwan. Recently Cheetah also reached partnership with two smartphone makers from outside mainland China, India-based Karbonn and Lava and Taiwan-based HTC, to promote its mobile apps, according to management.