Subaye, Inc. Announces Paying Core Online Video Customers Increased 11.5% in July 2010; Adding 3,942 Customers, 2,736 in 5 New Regions

    GUANGZHOU CITY, China, Aug. 16 /PRNewswire-Asia-FirstCall/ --  

    -- Online video customers increased 136% year-to-date for fiscal year 2010

    -- Cloud computing customers up 32% in July 2010 with 4,526 new cloud 
       computing subscribers added in last four months

    -- Over $65 million on annualized revenues from the two combined services

    -- Company launches new Group Buy Network for its online video customers

    Subaye, Inc. (Nasdaq: SBAY) ("Subaye" or the "Company"), a leading outsourced marketing services provider in China engaged in online video advertising and cloud computing business solutions, announced today it had 38,324 paying online video advertising customers as of July 31st, 2010, an increase of 11.5% for the month of July 2010. This represents an increase of 136% year-to-date for its fiscal year ending September 30, 2010, and an increase of 74% since the Company's second fiscal quarter ended March 31, 2010. The current level of 38,324 paying online advertising members generates a monthly run rate of approximately $4.5 million in revenues per month, or $53.8 million annually.

    Subaye saw strong new paying member growth from both its largest province of Guangdong and from its new markets. In July, it added 564 subscribers in Guangdong Province, where Subaye has the largest base of paying subscribers. Meanwhile, in July it added 2,736 new subscribers in 5 new regions: Anhui, Chongqing, Fujian, Jiangxi, and Zhejiang. Fiscal year-to-date, new member growth in Guangdong Province is up 42% while it added 15,343 new subscribers in new provinces since the beginning of fiscal 2010.


                        Number of Paying Subscribers        Growth Rate
    Regions:      9/30/09  3/31/09  6/30/10     7/31/10  6/30-7/31  FY 2010
                                                                    To Date
    Guangdong      16,211   16,998   22,417      22,981      3%        +42%
    Hong Kong          --    1,361    1,361       1,412      4%          --
    Taiwan             --      739      739         809      9%          --
    Hunan              --    2,921    2,921       3,298     13%          --
    Hainan             --       --    3,133       3,196      2%          --
    Hubei              --       --    3,811       3,892      2%          --
    Anhui              --       --       --         545      --          --
    Chongqing          --       --       --         471      --          --
    Fujian             --       --       --         373      --          --
    Jiangxi            --       --       --         342      --          --
    Zhejiang           --       --       --       1,005      --          --
    Total          16,211   22,019   34,382      38,324    11.5%       +136%
   

    Cloud Computing (CC)

    Since Subaye started promoting its Cloud Computing services in March 2010, it has increased the number of paying subscribers to 9,726, an increase of 4,526, or 87%. Growth has accelerated month-over-month in every month since March, increasing by 4% in April, 15% in May, 18% in June, and 32% in July. The cost-effective and easy-to-use functionality of Subaye's Cloud Computing services is the primary driver of the ramp in subscriber growth. The Company continues to see higher sales productivity from its expanded sales force. The 9,726 paying customers at July 31, 2010 generates approximately $1 million of revenues per month, or $11.7 million per year.

    "We are very pleased with the tremendous growth in both our online platforms - video showcase and cloud computing," stated Mr. Zhiguang Cai, Chief Executive Officer of Subaye, Inc. "We are especially encouraged about the growth in new markets such as Chongqing, Fujian, Zhejiang. It is further evidence that Subaye is gaining share in the burgeoning online services market. As we introduced more value-added services and expand into new regions, we expect further growth for new and existing customers." 

    Group Buy Network 

    Subaye is focused on strategically expanding its rapidly growing online video advertising business, http://www.subaye.com . Subaye's strategy is to focus exclusively on the flourishing Small and Medium Enterprises (SMEs) market throughout Greater China while leveraging multiple initiatives to sell additional value added services to existing and new customers thus monetizing the customer base.

    In addition to providing its customers with production, upload, storage, and publishing onto video sharing websites, Subaye continues to help increase the profile and value of its clients through its cloud computing product, which provides them with a cost-effective, user friendly and scalable solution to manage their customer and supplier information.

    On August 10, the Company launched a new service program called "Group Buy Network" ( http://cn.subaye.com/groupon/ ) for its existing online video customers to use for free until December 31, 2010. The new platform provides a forum for Subaye customers to secure a sale and build incidental brand goodwill and awareness. Subaye provides a forum for the sale of a particular unit volume of a certain product or service to be sold by a certain predetermined deadline. Online shoppers can approach Subaye's customers to purchase the specified product or service at a significant discount by buying the specific product or service at a predetermined volume and price by acting as a group to meet the volume requirements necessary to generate enough profit for Subaye's customer to justify the lower sales price. The entire group agrees to purchase the same item. The shoppers benefit by paying less, and the business benefits by increasing revenues and profits.

    "We expect this new initiative to increase the presence and awareness of Subaye among the burgeoning Small and Medium Enterprises market," stated Mr. Zhiguang Cai, Chief Executive Officer of Subaye, Inc. "Subaye's web portal, http://www.subaye.com , is a leading online video B2B2C advertising website in China. Subaye anticipates the new Group Buy Network could yield a substantial number of new customers annually who would utilize the forum to advertise their products and services over the internet."

    About Subaye, Inc.

    Subaye, Inc. is a leading outsourced marketing services provider in China engaged in online video advertising and cloud computing business solutions. Subaye's online video advertising network provides production, upload, storage, and publishing onto video sharing websites. Subaye also offers cloud computing business solutions, group buy networking, and is in the process of developing an online mall with 3D imaging throughout the online customer interface. Visitors of Subaye's websites, namely, http://www.subaye.com, view video showcases of Subaye members, primarily small to mid-size enterprises ("SMEs"), and select products or services they wish to purchase. Paying members utilizing Subaye's video advertising platform pay a membership fee of approximately $117.0 per month. The Company previously conducted a trade services and an entertainment media business. For further information on Subaye, Inc., please visit http://www.subaye.net .

    Forward-Looking Statements

    Certain statements contained herein constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates and projections about Subaye, Inc.'s industry, management's beliefs and certain assumptions made by management. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Because such statements involve risks and uncertainties, the actual results and performance of the Company may differ materially from the results expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Subaye, Inc.'s operations are conducted in the People's Republic of China ("PRC") and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. Other potential risks and uncertainties include but are not limited to the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition. Unless otherwise required by law, the Company also disclaims any obligation to update its view of any such risks or uncertainties or to announce publicly the result of any revisions to the forward-looking statements made here. Readers should review carefully reports or documents the Company files periodically with the Securities and Exchange Commission.

    For more information, please contact: 

    Company: 
     James Crane 
     Chief Financial Officer 
     P.R.C. Cell: +86-186-2136-3580  
     U.S. Office: +1-617-209-4199 

    Investor Relations: 
     Ted Haberfield 
     HC International, Inc. 
     Tel:   +1-760-755-2716 (US) 
     Email: thaberfield@hcinternational.net 
     Web:   http://www.hcinternational.net