In this update, we will provide a bit more color to yesterday’s announcement and on our overall acquisition strategy.
Yesterday, we announced that Softbank C&S, a subsidiary of Brightstar Corporation, has signed a reseller agreement to provide NQSky and the complete set of secure enterprise mobility management solutions to its corporate clients throughout Japan. Softbank C&S is an ideal partner for us in our expansion of the NQSky platform outside of China. With more than 9,000 sales partners, SoftBank has a strong history of distributing various IT-related products, which is its original business. NQ Mobile will be able to leverage the many SoftBank Group synergies in this expansion. We would expect the Softbank C&S relationship to contribute to our NQSky business in 2015 following the completion of the product customization, localization, and channel preparation.
The NationSky acquisition is just one example of our strategy to position our business advantageously in many of the fastest growing segments of the technology sector. Through various synergies, including product collaboration, R&D, IP sharing, and carrier relationships, we have been able to rapidly grow this business. Maximizing value from acquisitions like NationSky, FL Mobile and more recently, Yinlong (MusicRadar), Huayong (vLife), Showself and Yipai, is an important part of our strategy.
We are very excited about the recent Showself and Yipai acquisitions. In fact, we expect each to contribute more to our financials than FL Mobile did in its first year after acquisition. Showself is a real-time online entertainment social platform. Users create and organize groups for self-expression and diverse interests such as singing, disk jockeying, live talk shows, dating, games and others. Showself also collaborates with TV stations, modeling and casting agencies, advertising agencies, media groups, online video websites, and mobile gaming companies to create both online and offline events that engage users and drive virtual goods traffic. Showself already has millions of users and a profitable and growing revenue base.
Yipai provides PC and mobile intelligent interactive advertising services, through the integration of media channels. Through user modeling and image recognition technology, Yipai analyzes and searches for potentially interesting merchandise and services provided by advertisers. Once it finds the match, Yipai displays the advertisement in the form of a floating layer on top of the picture or around the related contents. Yipai’s primary business is currently business-to-business (B to B) and highlights a partnership with many mobile and Internet media companies. A business-to-consumer (B to C) offering exists and is part of the future roadmap. We believe Yipai offers its customers much higher click through rates with this new form of image-based search advertising as compared to traditional online advertisements. Earlier in 2014, its daily traffic volume already exceeded 10 million and current advertisers include VIPShop and Taobao.
Our tweet from today: $BIDU CEO says, in 5 years 50% of search will be speech and image. We agree. We’re ready #Yipai #MusicRadar #Doreso Finally, there are three questions that we are getting frequently enough to warrant a direct response in this forum:[question]When are you going to report your quarterly results for 2014?[/question] [answer]Now that we have completed the annual report for 2013 on Form 20-F filed with the SEC, our Finance Department is working closely and diligently with our auditors to prepare the financials for the first, second and third quarters of 2014. We will report all three quarters at the same time. We will announce the date and time of the earnings release and conference call formally by press release as soon as the exact date is determined.[/answer] [question]Now that you have filed your form 20-F, is the Company or Management able to buy stock?[/question] [answer]The trading window remains closed until 48 hours after the report of our quarterly results. Refer to the previous answer as to when we will report our earnings.[/answer] [question]Why did the number of shares outstanding increase dramatically from 54.8 million to 88.8 million between end 2013 and mid-October 2014, as per the 20F?[/question] [answer]Actually, the difference is not as big. The confusion stems from using different accounting methods to determine the number of shares outstanding on each of these two dates as reported in our 20F as follows:[/answer]
- 54,796,309 ADSs on December 31, 2013 represents the total weighted average number of shares outstanding under U.S. GAAP. (see page 4 in the 20F)
- 61,986,808 ADSs on December 31, 2013 represents the number of shares actually in circulation on that day. (see page F-3 under the Equity section in the 20F)
- 88,759,861 ADSs on October 15, 2014 represents the number of shares actually in circulation on that day. (see page 104 in the 20F)
This leaves us with a difference of 26,773,053 ADSs which includes the consideration of several investments and acquisitions previously announced including the Huayong (vLife) investment described on our April 10, 2014 earnings release and Yinlong (Music Radar) detailed throughout 2013.
The majority of the remaining difference, outside of the investments already disclosed previously, came from Showself and Yipai, both businesses described above in this blog post. We look forward to providing more details and financial projections related to these investments on our earnings call.
We remain confident in our strategic positioning and excited about our future growth outlook.
Forward Looking Statements
This blog post contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. All statements other than statements of historical fact in these blog posts are forward-looking statements and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These forward-looking statements are based on management’s current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties. Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.