If you think that Facebook
Despite a 31% increase in monthly unique log-ins, Renren
China's leading social networking website was bailed out by its in-house game development. It was a 122% spike in online gaming -- now accounting for a little more than half of Renren's total revenue -- that resulted in an overall 48% top-line advance to $44.8 million during its second quarter. That may have been better than what Wall Street was targeting, but Renren's widening deficit of $0.06 a share was worse than the $0.04-a-share loss that analysts were forecasting.
It doesn't help that Renren's operating expenses more than doubled as it ramped up its game development and spent far more than it took in with its group-buying website Nuomi.
China may offer investors a unique opportunity to buy into the Internet migration process at an earlier and more lucrative stage than where we're at closer to home, but many of the country's dot-com darlings, including Renren, Sohu.com
It also isn't helping Renren that Facebook's busted IPO is turning investors off to social networking websites in general. Renren and Quepasa parent MeetMe
Renren's guidance also isn't going to win it new friend requests. It may have bested the market's revenue target for the second quarter, but the $49 million to $51 million that it's eyeing for the current period is short of the $52.2 million that analysts are projecting.
Renren has been a busted IPO since shortly after going public last year. Until it learns how to dish out welcome surprises, resume its display advertising growth, and start clawing its way back to profitability, Renren's going to stay busted, too.
The Motley Fool owns shares of Facebook. Motley Fool newsletter services have recommended buying shares of Sohu.com, SINA, and Facebook. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
More from The Motley Fool
1 Major Clue That Facebook Wants to Expand Into E-Commerce
The social network adds a respected finance executive to its board.
Why Shares of Facebook, Inc. Were Up 53% in 2017
The company was firing on all cylinders, and investors took notice.
It's Official: Facebook Messenger Has Become "Too Cluttered"
The social network vows to simplify one of its most popular messaging services in 2018.