KongZhong Q2 2007 Earnings Call Transcript

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2007-08-20 17:48:40.0

Tags: Revenue, MSN, U.S. Bancorp Piper Jaffray Inc., Call Transcript, IVR, Earnings, Kong.net, Interactive Voice Response (IVR), Seeking Alpha

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from the line of Michael Olson with Piper Jaffray. Please proceed with your question.

Michael Olson - Piper Jaffray

Thank you very much. I just had one question about the Microsoft, or the MSN China deal. When do you think you are going to start to see material revenue from that deal?

Sam Sun

Hey, Mike. Thanks for calling in. I think the deal with Microsoft, the very first part is the traffic to Kong.net. Under the cooperation, we provide the content to MSN 3.0 users so they have the choice to browse the news provided by Kong.net and they could click the link and then the traffic will be directed to Kong.net. I think the number one is really the traffic to Kong.net and then the users through MSN 3.0, a lot of users may well be more and more familiar with the Kong.net product. This was our number one concern when we signed the deal with MSN 3.0.

Of course, there will be some revenue, especially on the game downloading part but so far, we haven’t seen any significant revenue contributed by this MSN 3.0 deal. Of course, we hope with the development, with the spreading of MSN 3.0, the game downloading revenue directly from MSN 3.0 will become significant.

Michael Olson - Piper Jaffray

Okay, that makes sense. So basically the key is more traffic.

Sam Sun

Yes.

Michael Olson - Piper Jaffray

Are you -- regarding WVAS revenue for Q3, are you expecting that it will be essentially flat quarter over quarter?

Sam Sun

Yes, pretty much flat quarter over quarter.

Michael Olson - Piper Jaffray

Okay, great. That’s all the questions I had. Thank you.

Operator

Your next question comes from the line of [Adele Mao] with SIG. Please proceed with your question.

Adele Mao - SIG

Good morning, Yunfan, Nick and Sam. I have a couple of questions. The first one is what kind of product did contribute to your IVR growth in the second quarter? And will this growth be sustainable in the next quarter?

Sam Sun

For the IVR revenue, we actually set up a few cooperations with -- because in the past, KongZhong was not a big player in this IVR field. So starting from Q2, we signed a few cooperation agreements with some other companies in this field, in this IVR field. They helped us promote the IVR part. They actually also helped us develop new IVR products so that we can increase our IVR revenue.

 

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