(Yicai Global) June 11 -- Chinese mobile internet company Cheetah Mobile reported over 50 percent less operating revenue in the first quarter from a year earlier after Google placed curbs on advertising insertions in apps, and its stock price plummeted nearly 5 percent yesterday as a result.

The firm posted a 51.4 percent decline in operating revenue to CNY528 million (USD74.8 million) in the first quarter, and CNY104.6 million in net losses compared with CNY7.1 million in net profit in the same period last year, per the first-quarter financial report it issued the same day.

Cheetah’s stock [NYSE:CMCM] fell 4.78 percent to USD3.19 after the report came out, trimming its market value to about USD440 million.

Google withdrew nearly 600 apps from its Google Play store because they displayed out-of-context advertising and banned the accounts of their developers on its advertising platform in February. Cheetah took one of the biggest hits among these, as all 45 of its apps got the ax, including its LiveMe live-streaming platform, which targets overseas users.

The Beijing-based company’s advertising cooperation with US social media giant Facebook was halted at 2018’s end. The firm has been in touch with it and Google, but their cooperation is still on ice, which applies great pressure on its overseas commercialization and user acquisition, Fu Sheng, its chief executive and co-founder, said at an analysts’ teleconference yesterday.

Changing Its Spots

Cheetah started a strategic transformation last year to cope with this strain, including hiking its investment in its artificial intelligence and robot segments and spinning off LiveMe from its financial statements in the third quarter last year.

The company’s revenue from AI jumped 12 percent to CNY31.8 million in the first quarter from the fourth, per its report.

More of its robots are in use in hospitals and public transport amid the Covid-19 pandemic, Fu said in the financial report, but warned, “We are not expecting the robot business to generate considerable profit in the short term.”

Founded in 2010 by Robert Darroll and Sheng Fu, the firm develops mobile applications and provides the Clean Master, CM Security, Battery Doctor and Duba Anti-virus internet security software. The company also supplies platform products such as Duba.com, Cheetah browser, game centers and mobile app stores to enable multiple user traffic entry points and global content distribution channels for its partners, according to tech media portal Crunchbase.

Its headquarters and major research and development center are in Beijing. It also has R&D bases in Zhuhai, Zhengzhou, Guangzhou, Suzhou and Hangzhou. Darrol now serves as president and chief executive at Cheetah Software Systems in Los Angeles.

Editors: Dou Shicong, Ben Armour