CyberAgent Reports First Half Results; Group Sales Rise 12.4%, Operating Income Rises 41.2%

JCN Newswires,  May 13, 2008  

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Tokyo, Japan, May 13, 2008 - (JCN Newswire) - CyberAgent, Inc. (TSE: 4751), a Tokyo-based leader in Internet media markets, has reported consolidated results for the first half ended March 31, 2008, with net sales rising 12.4%, and operating income and ordinary income also rising significantly on the previous first half.

These gains were driven by solid growth in site listing (search results) advertising for the Internet advertising agency business, as well as firm mobile advertising for the Internet media (advertising/fee collection/content) business.

Operating income rose 41.2% to 2,923 million yen from 2,069 million yen in the previous term. Although there were upfront investments to expand page views for Ameba, there was an increase in income as a result of greater sales for the internet advertising agency business, firm earnings from foreign exchange margin transactions and mobile advertising for the internet media (advertising/fee collection/contents) business, and contributions to income from the disposal of shares in Mixi Inc. by the investment development business.

Net income fell 36.1% to 492 million yen from the 770 million yen in the previous term, because of extraordinary losses of 924 million yen on the evaluation of securities held for investment purposes and tax expenses, including income tax and adjustments to income taxes.

The Internet business market continues to expand, bolstered by the diffusion of the broadband environment and the introduction of flat-rate systems for mobile phones. According to Dentsu Inc., the Internet advertising market grew 24.4% from 482.6 billion yen in 2006 to 600.3 billion yen in 2007, surpassing both radio advertising and magazine advertising. The Internet business market is likely to expand even further, with the development of diverse Internet media, expansion of the EC market, and possibilities for new services.

In this promising environment, the CyberAgent Group has continued to work to strengthen its Group media, centered on the blog media Ameba, to reinforce its marketing power through its Internet advertising agency business, and to broaden its investment development business that makes use of the other two businesses. In particular, the company will continue upfront investments and considers page views (PVs) as the most important indicator when developing the blog media Ameba, the company's core media.

I. Consolidated Financial Results for the First Half Ended March 31, 2008

                                                       (millions of yen)
------------------------------------------------------------------------
                                First Half ended Mar. 31,    FY Sept.30,
                             2008      %       2007      %         2007
------------------------------------------------------------------------
Net Sales                  42,078   12.4     37,450   38.0       76,007
Operating Income            2,923   41.2      2,069   70.1        5,501
Ordinary Income             2,864   43.5      1,996   55.4        5,143
Net Income                    492  (36.1)      770   (83.9)       2,016
------------------------------------------------------------------------
Net Income/Share (y)            757.19          1,167.28       3,055.49
Fully Diluted
  Net Income/Share (y)          756.81          1,165.64       3,050.70
------------------------------------------------------------------------

Consolidated Financial Position
------------------------------------------------------------------------
                                      As of March 31,        FY Sept.30,
                                   2008           2007             2007
------------------------------------------------------------------------
Total Assets                     55,325         51,347           49,162
Shareholders' Equity             29,385         32,973           31,170
Shlders' Eqty Ratio (%)            42.8           53.4             51.9
Shlders' Eqty/share (y)       36,517.42      41,515.45        38,645.57
------------------------------------------------------------------------

Consolidated Cash Flows
------------------------------------------------------------------------
                             First Half ended March 31,      FY Sept.30,
                                 2008           2007               2007
------------------------------------------------------------------------
Cash Flow from
 Operating Activities           1,542             66             2,849
Cash Flow from
 Investing Activities          (1,615)        (2,399)           (4,631)
Cash Flow from
 Financing Activities          (1,142)          (494)             (102)
Cash and Cash Equivalents
 at Period End                 16,595         17,044            17,848
------------------------------------------------------------------------

II. Results by Business Segment

The traditional business segments - internet media business (advertising, EC (sales), EC (commission/fee collection), and other), internet advertising agency business (company tie-up media, other company media, and other), and investment development business) - were based on business division criteria from an internal management perspective. However, internal management divisions and traditional business segment divisions were no longer consistent since the blog business, centered on the blog media Ameba, was designated the priority business; there had been a reorganization in order to develop the blog business as a core business; and advertising and earnings types had become more diversified following changes in the Internet market. Therefore, business segments were reorganized into the internet media business (blog), internet media business (advertising/fee collection/contents), internet media business (commerce), internet advertising agency business, and the investment development business, making them consistent with internal management divisions.