Profile: Linktone Ltd. (LTON.O)

Linktone Ltd. (Linktone), incorporated in November 1999, provides entertainment-oriented telecom value-added services to mobile phone users over the 2G and 2.5G mobile telecommunications networks in China and is in the process of commercially launching services which are compatible with the 3G mobile telecommunications networks in China. Linktone specialize in the development, aggregation, marketing and distribution of user wireless content and applications for access by China’s estimated 641 million mobile phone uses, through three mobile network operators in China, China Mobile, China Unicom and China Telecom. The Company also provide certain audio-related services over the fixed line telecom networks in China.

The Company's 2G short message service (SMS)-based services include ringtones, icons and screen savers, interactive SMS messaging in certain television programs, adventure, action, trivia and fortune-telling games, lunar and Western horoscopes, POP Messaging, jokes, fan clubs, event-driven or entertainment news updates, and a virtual mobile amusement park called WonderWorld. Linktone is also focused on offering 2.5G services, which include multimedia messaging service (MMS), such as animated cartoons and screensavers, comic strips, magazine-style mobile articles on a variety of topics and event-driven news updates. In addition, its 2.5G offerings include wireless area protocol (WAP) services, such as WAP-based ringtones, screensavers, games and dating services, and advanced Java games, or JAVA games. Additionally, Linktone offers audio-related services such as ringback (RB) which replaces the common ring-ring sound heard by callers with high music and sound effects, and interactive voice response (IVR) services, which allow users to listen to songs, jokes, stories and coverage of major events.

Short message service

The Company’s ringtone, icon and screen saver downloads enable mobile phone users to customize the ringtone of their phones and the image, which appears on the phone screens. It offers over 5,000 ringtones, which have been tailor-made for the Chinese market with monophonic, as well as polyphonic (which sounds more like real music than the traditional electronic ringing sounds of mobile phones), capabilities. Linktone also offers more than 10,000 icons and screen savers, which range in complexity from simple black-and-white images and monochrome color to full color images. It offers interactive SMS-based games that can be played on the screens of mobile phones. Its game offerings include Endless Battle Space, Mobile Pet and Crystal Ball.

Through its contractual relationship with STAR TV and QTV, the Company also enable television viewers to interact with certain programs via SMS messages by, for example, sending an SMS message to vote for the winner of a contest on the program. Linktone offers a number of information-related services including POP Messaging, which allows users to receive wireless messages containing information regarding one of several categories of topical information, such as fashion, health and beauty. Users can also receive automatic messages from on selected topics such as jokes, news and horoscopes. Its WonderWorld service offers users access to a mobile amusement park where users take on a virtual identity, are able to interact with one another, and have access to a variety of games, chat rooms, information and other entertaining services.

MMS/WAP/Java

Linktone next generation MMS and WAP ringtones allow users to create their own customized ringtones. Linktone also offers more than 8,000 MMS and WAP color images and color animations. Linktone offer games based on the Java and Brew programming languages, which offers an effective way to create sophisticated 2.5G games. Linktone has about 26 Java games available on China Mobile platform includes Contract Blood, Magical Legend of the Leprechauns, UberSoldier, Terminator, Fire Drake Game, 3D Motion Knight and Super Fighter. Linktone also offers WAP-based card games and games of chance, such as blackjack, poker and mahjong, as well as WAP-based versions of its SMS games.

The Company offers an in-house developed BTPig, Xiao Mei and Xiao Xi, animated cartoon characters and several other local serial comic strips, which relate to different themes, such as holidays, romance and user hobbies and interests. Linktone offers WAP versions of its jokes, news, fan clubs and horoscope services.

Audio-Related Services

Ringback allows a mobile phone user to customize the sound callers hear when the user’s phone is ringing. Linktone supplies a variety of pre-recorded messages from celebrities, sound effects (such as sirens), and a range of music. It provides IVR services, which allow users to send songs, jokes and stories with personal messages to their mobile phones or to the mobile phones of their friends or others. Its IVR services cover, such topics as automobiles, jokes, sports, games and Chinese comedies.

Cross-Media Business

The Company sells advertising time on QTV, and provides related services. In July and September 2008, Linktone terminated its exclusive advertising arrangements with QTV and TJSTV, respectively.

Casual Games

Linktone offer online casual multi-player games such as billiards, card games and majong. Casual games are easier to play than multi-player online role-playing games, and can be played to a conclusion within a short period of time. The basic version of games are available free-of-charge, and Linktone sells virtual game enhancements, such as options for changing the appearance of the game-play or advanced tools, which players can use in the game, utilizing its prepaid point system. As of December 31, 2008, Linktone had 83 casual games.

The Company competes with KongZhong Corporation, MTone Wireless, Newpalm, Any8, 263.net, TOM Online Inc., TENCENT Inc., Enorbus Technologies, Solute Wireless, SINA CORP., Sohu.com Inc, Shanda Interactive Entertainment Limited, Focus Media Holding Limited, Nokia, come2us, Cybird, Yahoo!, Lycos and AOL.