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How Do Anti Virus Offers Make Money? (3)

08-15-2015 12:08 AM #1 malachii (Member)
How Do Anti Virus Offers Make Money?

Can some intelligent fellow out there enlighten us on this?

How do you monetize a mobile Anti Virus app or something similar? I know they push downloading apps which they get paid for, but is there anything else that they do that's not obvious?

This might be obvious for someone in the industry, but can someone explain it for someone who's not in mobile?

Thanks!

08-15-2015 01:41 AM #2 imphocused (Member)

Freemium models generally profit based on in-app purchases, or simply getting the user to upgrade to the 'better/premium' version after getting hooked into the free version. Quoted from the CEO of Avast

So, we do have a set of premium products targeted at businesses and home users that need extra capabilities. Sales of these products allow us to support our business.

But instead of selling these through middlemen (retailers, computer manufacturers, etc.), we use our free product to make users aware of the premium products. So when you use the free product, you will be told at registration and expiration time about the differences between the free and paid products. If you decide you need the extra capabilities, you can buy the product directly and seamlessly from us via our online store. If you decide you don’t need those capabilities, you just continue using the free product.

Cheetah Mobile is a leading mobile internet company with approximately 444 million mobile monthly active users in March 2015. Its mission critical applications, including Clean Master, CM Security, Battery Doctor and Duba Anti-virus, help make the internet and mobile experience speedier, simpler, and safer for users worldwide. Cheetah Mobile is the publisher of Clean Master, the #1 mobile app in the Google Play Tools category worldwide by monthly downloads in March 2015, according to App Annie.

The Company also provides various platform products such as Duba.com, Cheetah browser, game centers, and mobile app stores to provide multiple user traffic entry points and global content distribution channels for its business partners.

At that point it doesnt matter as much if people are paying/upgrading from free, you now have a traffic source of all these users who you can now show ads to. Alas... that's what they seem to be doing with Cheetah Ad Platform which states

Massive Global Reach

Over 440M monthly active users
Engaged audiences deliver performance

Note the wording is 'users' not 'visitors'. Now let's get a little more detailed, shall we?

Reading through their 2015 Q1 Results (PDF) you see:

Revenues from online marketing services increased by 141.1% to RMB559.9 million (US$90.3
million) in the first quarter of 2015 from RMB232.2 million in the prior year period. This
increase was primarily driven by the strong demand for the Company’s mobile advertising
business in overseas and domestic markets as well as the rapid growth of the worldwide mobile
advertising market.

· Revenues from internet value added services (“IVAS”) increased by 35.3% to RMB97.2
million (US$15.7 million) in the first quarter of 2015 from RMB71.8 million in the prior year
period. This increase primarily reflected the growth of revenue from mobile and PC games
published by the Company.

· Revenues from internet security services and others increased by 32.0% to RMB15.5 million
(US$2.5 million) in the first quarter of 2015 from RMB11.7 million in the prior year period. The
increase was primarily due to the sales of the Company’s air purifier product.

By platform, revenues generated from mobile business increased by 584.1% to RMB367.4 million
(US$59.3 million) from RMB53.7 million in the prior year period. This increase was primarily due to the
increasing popularity of the Company’s mobile marketing services in overseas and domestic markets, as
well as the rapid growth of mobile advertising market globally.

Obviously this is not the same case for all of the other antivirus (or other) apps that you see, but this gives you an idea of where the money is made. The investor snippets I pasted above do not tell the full story, as any investor can tell you (revenue != profits), but that's some research you can do on your own.

Hope this helps, and maybe someone can chime in.

08-17-2015 01:25 PM #3 cbrughmans (Member)

Apps generally make money in three ways:
1. The user has to pay for the app
2. The app is for free but the user has to pay for upgrades or extras (freemium model)
3. The app and all its functionalities are free but the user has to tolerate the fact that the app is distributing in-app ads
4. A fourth and less common way is that the app owner aggregates all the users' data and sells this "consumer data" on to big research companies such as Nielsen, GFK, etc.

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