Purple Lounge going down?

Overall Media Corp are in the money and have seen a rise in second quarter profits, though their Purple Lounge gaming section isn’t doing so well

It is not looking good over at Purple Lounge despite the fact that Media Corp said it was pleased with its quarterly results. These record results came despite the fact that their poker revenues are way down on the same time last year. The microcap internet advertising and gaming group gave an upbeat projection for their earnings over the rest of 2011, arguing that they are extremely well positioned to expand their portfolio by acquiring new businesses. The total group sales for the second quarter were down £400,000 from the same period in 2010 at £11.4 million. It was the shrinking revenue coming from their online gaming division, Purple Lounge that is responsible.

The lowering in profits from Purple Lounge comes despite the fact that 4,500 new customers have been playing with them taking their numbers from 110,500 to 115,000. There has been a massive drop in revenue from £11 million to £9.5 million. The parent company, Media Corp, blame this on the global drop in poker revenues since the events of Black Friday, last April.

They are still smiling at Media Corp owing to the fact that this loss was offset by their internet advertising company, Eyeconomy whose revenue stream doubled from the same period in 2010. The giant have not been known to be patient with loss making entities under their control, having previously sold Gambling.com and Sport.co.uk at the start of 2011. When asked about the sale of the two sites the Chief Executive of Media Corp said that “The group is now well funded following the sale of Gambling.com and Sport.co.uk at the beginning of the financial year and we continue to consider a number of earnings enhancing acquisition opportunities that will enhance both the scale and profitability of the group,” Investors are pleased by the way Media Corp is being run and their shares have gained in value by 3.2%.

It’s unlikely that Media Corp will be the only company affected by a lowering of income from poker based sites. As Media Corp themselves stated there is a global trend downwards towards online poker that doesn’t look set to end any time soon. With the reverberations still being felt by thousands of players around the world from the implosion of Full Tilt Poker it is likely that poker fans will be wary about depositing funds in any site without some kind of protection against that site going belly up.