Mediaboss Marketing

BEIJING, March 8, 2012 /PRNewswire-Asia/ -- Ku6 Media Co., Ltd., ("Ku6 Media" or the "Company", Nasdaq: KUTV) a leading internet video company in China, today announced unaudited financial results for the fourth quarter of and full fiscal year ended December 31, 2011.

Background

In 2010, Ku6 Media (formerly known as Hurray!) completed a series of transactions including acquisition of Ku6 Holding Limited in January 2010 and disposal of its wireless value-added services ("WVAS") and music businesses to Shanda Interactive Entertainment Limited ("Shanda") as well as acquisition of online audio business from Shanda in August 2010, and became a company focusing on online advertising business on its online video platform of http://www.Ku6.com. As a result, the operating results of WVAS and recorded music were presented as "Operating Results of Discontinued Operations" in the income statements.

Highlights

Business results

Total revenues, representing advertising revenue from online video portal operation, were $4.42 million in the fourth quarter of 2011, representing an increase of 4.5% from $4.23 million in the third quarter of 2011 and a decrease of 34.7% from $6.77 million in the fourth quarter of 2010.

In the second quarter of 2011, the Company started to generate revenues from performance advertising using a system called Application Advertisement ("AA"). The performance advertising revenue was realized through an affiliated advertising agent. 79.2% of total revenues in the fourth quarter was from this source, as compared to 72.3% of total revenues in the third quarter of 2011.

Cost of revenues was $4.23 million in the fourth quarter of 2011, representing a decrease of 22.8% from $5.48 million in the third quarter of 2011 and a decrease of 66.1% from $12.46 million in the fourth quarter of 2010. The change of content strategy since the second quarter of 2011 fromlong-form professional content to UGC is the main reason for the decrease in cost of revenues. As a result, gross profit was $0.19 million in the fourth quarter of 2011, as compared to a gross loss of $1.25 million in the third quarter of 2011 and a gross loss of $5.70 million in the fourth quarter of 2010.

Operating expenses were $4.38 million in the fourth quarter of 2011, representing a decrease of 61.2% from $11.28 million in the third quarter of 2011 and a decrease of 55.2% from $9.77 million in the fourth quarter of 2010. Fourth quarter operating expenses include a $0.98 million favorable adjustment due to increased forfeitures of equity compensation awards caused by greater than anticipated headcount reductions in the Company's strategic transition.

Operating loss was $4.19 million in the fourth quarter of 2011, representing a decrease of 66.6% from $12.53 million in the third quarter of 2011 and a decrease of 72.9% from $15.46 million in the fourth quarter of 2010.

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Ku6 Media Reports Unaudited Financial Results for the Fourth Quarter and Full Year of Fiscal Year 2011