Focus forecast down as mobile ads scrapped

Shanghai - Chinese digital media group Focus Media will cut its full-year revenue by $40 million after closing its mobile advertising business.

Despite a 214.7% increase in annual revenue to $162 million from $51 million of last year, CEO of Focus Media Tan Zhi said the group has been facing a shortfall in mobile ad revenue.

The group announced in March it had put in place a policy to prohibit its subsidiaries sending junk messages to users without their permission.

Digital out-of-home ad revenues was 108.7 million, showing an increase of 113.4% compared to the first quarter of 2007.

Ad service revenues from commercial location network, including LCD display network, outdoor digital and non-digital billboard networks and movie theatre ad network, grew 97% to $62 million.

In-elevator poster frame network revenues rose 130% to $29 million while internet ads received $50 million, the weakest quarter for ad revenues in Focus Media's history.

In addition, Zhi speculated the Sichuan earthquake will have a negative impact on its operation in China in the second quarter.