Mobile social network GREE adds 2 million members in 3 months, makes lots of money

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GREE, a mobile social network only operating in Japan, is adding members at an incredible speed. In April 2008, the number of registered users hit 10 million members already, but GREE expects a whopping 2 million more as early as the end of this month.
GREE offers dozens of (essentially) free games to play on cell phones and is probably more of a social gaming site. And the company is printing money, it seems (via ads and, much more importantly, avatar-related and in-game item sales).
Here are some numbers GREE is expected to hit for the current fiscal year (that ends June 30 for the company):
– Sales: $138 million (4.6 times more than in fiscal 2008)
– Pretax profit: $76 million (7 times more)
– Net profit: $40 million (7 times more)

These numbers don’t come from nowhere and exceed the company’s own expectations. For the current fiscal year, GREE invested 3 times more in ads than last year. The $20 million promotion budget goes into web ads, offline ads (for example in commuter trains and public spaces) and TV spots.
Here is a GREE commercial featuring Japanese “idol” Yukina Kinoshita that’s currently on heavy rotation on Japanese TV:

The stock market rewards this performance with a market cap that currently stands at a whopping $1.4 billion. GREE, which went IPO in December last year, dwarfs former rival Mixi whose market cap currently reaches just $700 million. (With 17 million members, Mixi is Japan’s biggest social network, but it doesn’t have gaming content and is much stronger on the fixed web).
And GREE itself is highly optimistic for fiscal 2010, too. The company expects sales to jump to $200 million and wants to boost ad spend to $40 million in that year.

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