Shanda Interactive Q2 profits down 95%

Online media company Shanda Interactive Entertainment (SNDA.NASDAQ) reported Wednesday that second-quarter net profit declined 95% year-on-year as rising expenses cut into revenues, the Wall Street Journal reported. Shanda Interactive’s net profit in the three months ended June 30 was RMB8.8 million (US$1.4 million), down from RMB169.9 million a year earlier. Analysts had expected profits of around US$13.75 million. Shanda Interactive has struggled to find other sources of profitability to buttress its gaming business, which generates most of its revenues but has already matured in China. The company expanded into online book publishing and video, and other internet value-added services, but the new investments have also increased expenses. Shanda Interactive spun off its gaming unit (Shanda Games; GAME.NASDAQ) in 2009, but continues to collect revenue from the subsidiary.