Mail.Ru Q1 Earnings: Revenues Up 45% To $160M

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Mail.ru, the Internet giant — and 2 percent owner of Facebook — today reported Q1 revenues of $160 million, up 45 percent over last year and posted annual earnings with a full-year net profit $208.6 million — a impressive rise of 158.2 percent as it launched a range of new products and continued its push into international territories using games as its main assault weapon.

The company runs one of the country’s biggest social networks and its biggest web mail service, both of which saw significant growth over last year. With Mail now numbering 32.7m Russian subscribers and Odnoklassniki (“OK”) with 25.3m monthly active users as of March 2012.

Mail.ru’s biggest revenue driver is also its biggest growth segment: it’s the rather vague-sounding “Community IVAS” or community Internet value-added services: these encompass things like virtual gifts, in-game purchases and a variety of other paid services around its core products which run through Mail.ru’s money platform. These totaled $57.9 million — a jump of 110.8 percent on the same quarter a year ago.

Second-most important to Mail.ru is its advertising business, which reported $50.5 million of revenue for the quarter. Within that display accounted for $34 million and context ads $16.5 million, both growing at over 30 percent.

Meanwhile gaming brought in $35.9 million, but with growth of only 12.2 percent. This is important in that Mail.ru is using its games and gaming platform as the basis of its strategy to grow internationally. The low growth signifies that perhaps games have reached maturity in its core Russian market — and that growth has yet to really take off abroad.