Dwango Wireless suffered its third straight multimillion-dollar quarterly deficit, reporting a net third-quarter loss of $5 million.
The mobile entertainment publisher said it generated $968,000 in revenue during the period, up 9 percent from second-quarter figures. Dwango’s net third-quarter loss of $5 million, or 57 cents per share, was down slightly from a second-quarter loss of $5.6 million, or 64 cents per share.
Dwango has lost more than $15 million so far in 2005.
The company said layoffs and other cost-cutting measures helped trim its losses, and credited new product launches with Playboy and USA Today for the increased revenue. Dwango also distributes licensed mobile content from ESPN, Napster and Rolling Stone, but severed ties with Beliefnet, which provided faith-based content, in an effort to trim overhead.
Dwango parted ways with Dwango Co. Ltd., its Japanese counterpart, in October, and expects to undergo re-branding in December. The publisher said it will use consumer-facing, off-portal marketing to push racier content from Playboy as the industry adopts rating systems for adult content. Dwango offers Playboy images from the content deck of one Canadian operator, and an undisclosed U.S. carrier allows its subscribers to go off-deck to access Playboy content.
“Over time, each of the major carriers will have different ratings” in place, said Alex Conrad, Dwango’s interim chief executive officer. “We are going to be very aggressive with the off-deck positioning of this content, but as the carriers become ready, we will be on-deck as appropriate.”
Dwango reported $6.6 million in cash and short-term investments as of Sept. 30.
Meanwhile, Summus Inc. reported a third-quarter net loss of $1.09 million, or 8 cents a share, compared to a loss of $999,000 during the same period last year. Revenue jumped to $2.06 million during the period from last year’s $1.5 million.
The developer of wireless applications said increased operating expenses were largely to blame for the loss. Summus spent $916,000 on research and development during the period, more than doubling last year’s figure of $437,000.
Like Dwango, Summus hopes to use consumer-facing portals to push its content and lifestyle applications, said CEO Gary E. Ban. The developer is testing an off-deck portal and plans to launch a full version early next year.
“With a mobile content portal, we can distribute vast amounts of content directly to the consumer, and we can offer the creative pricing and bundles of content that mobile consumers are requesting,” said Ban. “Our vision of the marketplace is not just selling ringtones, games and wallpapers. … This portal strategy of ours we’ve developed over the last 16 months is a lot more.”
Like Dwango, Summus offers branded content from several high-profile partners, including images of models from Sports Illustrated, Hooters Restaurants and Maxim magazine. The company partners with Fuji Photo Film Co. Ltd. on wireless photo messaging applications, and markets a Texas Hold’em poker game from poker celebrity Phil Hellmuth.
Lastly, prepaid wireless services company SmartServ Online Inc. reported a net third-quarter loss of $2.21 million, or 35 cents per share, down from a loss of $2.23 million, or 74 cents per share, in the year-ago period. SmartServ, which was a content provider before becoming a mobile virtual network operator, generated $13.6 million in revenue during the quarter.
The company also completed a $3 million round of financing during the period.
“We continue to pursue the launch of our prepaid mobile-phone service, Uphonia, and investigate new strategic and financing opportunities,” said CEO Robert Pons. “At the same time, we are exploring ways to improve the margins of our prepaid calling card division.”
