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Vkontakte suffers massive drop in profit

0 18 July 2014



In the past 12 months the net profit of social networking website VKontakte experienced a catastrophic drop to $225,000. This is less than a sixth of the $1.5 million profit made by the network in the previous year, according to Vedomosti, and a tiny fraction of the $15 million profit registered in 2011-2012. 

Mail.ru Group, which holds 52% of Vkontakte shares, stated that the drop is due to growing administrative costs, which grew by 17% to more than $150 million in 2013.

The introduction of online advertisements between 2012 and 2013 provided a minimal source of revenue for the site. However, Mail.ru expects Vkontakte's EBITDA to remain relatively low. 

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