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Ku6 Media Co., Ltd. Message Board

  • yhoomsg.investor1226 yhoomsg.investor1226 Oct 26, 2013 3:06 PM Flag

    Two areas I expect KU6 to improve drastically soon

    We all know that there are two key areas we like the company: the traffic surge and the new approach of Mr. Du (CEO) to address the cohesiveness of UGC by theme projects and partnering with TV channels. The advertising platform from the parent company also helps alleviate the issues of ad channels, but there are also two areas I would urge the company to address as soon as possible:
    1) one is the server performance. Honestly, if this issue is not addressed soon, people will go away given the short attention span of average surfers;
    2) the other is the monetization of its mobile platform: I am not sure if they have started it yet, but I believe that mobile users contribute to a big portion of the traffic, and it is the future of internet traffic. This is contributing to the bottom line of the business, and it is probably not as urgent as issue 1), although it is highly related to revenue and hence the stock price.
    I am looking for a 20x increase of my investment, so I am patient. Time will tell if we are right or wrong, but I have high confidence.
    I agree with Robbie that Q3 is probably not as explosive, but Q4 has to explode and then followed by nuclear explosion next year.
    Good luck and let us celebrate in a year or two.

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    • Investor,

      I agree 100% that the primary issue with KU6 is server performance. If you look at the Statscrop traffic graph for August, you'll notice days when traffic spikes down way below #200 before spiking back up above #100 the next day. By September, they had corrected this issue to some extent,and traffic speed on Alexa, which was in the bottom 7%, rose to 13% in one week. However, since then, not much has changed.

      I cannot imagine that KU6 management isn't dealing with this issue on a daily basis and is slowly trying to turn things around, but KU6 is in the strange position of having almost run out of cash at the exact time when the site has become a screaming success in China. Plus, the parent company is flat out loaded, but most likely Tianqiao Chen wants to test his management and see a profit before he loans his subsidiary money for servers. And they are expensive- Microsoft, Google and Amazon, for example, each have an estimated 1 million servers and multiple mega-data centers in cool climate places like Ireland and Norway which have cost a minimum total of $2.5 billion (per company) to build and maintain (roughly $1000 per server, and tens of millions per data storage center). KU6 isn't nearly as big as Google, but they'll eventually have to shell out tens of millions on infrastructure, as they might one day be as big as Youtube is now.

      As far as mobile monetization is concerned, KU6 has already started- The Coser, for example, runs the Kentucky Fried Chicken logo across the screen, seen from both mobile devices and PCs. However, you're correct that banner and video ads aren't there yet. Most likely KU6 wants to build "stickiness" before slowly introducing mobile ads the way Youtube has.

      Sentiment: Strong Buy

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