BEIJING, Nov. 28, 2018 /PRNewswire/ -- Cheetah Mobile Inc.
(NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading mobile
internet company with global market coverage, today announced plans
to take legal action against mobile app attribution and analytics
company Kochava for providing false information and opinions about
Cheetah Mobile's advertising system to the media, leading to a
sharp decline in the Company's stock price. The Company believes
that Kochava's actions are misleading and completely without
merit.
Kochava has accused Cheetah Mobile's apps of engaging in a
fraudulent advertising practice known as "click injection." Kochava
has based this assertion on a series of tests carried out in a
simulated smartphone environment, the results of which were shared
with Cheetah Mobile and the media in a series of videos. However,
upon analyzing the videos and other evidence, the Company
discovered that Kochava's testing methods contained fundamental
mistakes, leading to a number of false or misleading conclusions,
including:
1. In the evidence provided to Cheetah Mobile, click
injection occurs whether Cheetah Mobile apps are installed or not.
It is unrelated to Cheetah Mobile's apps.
On November 27, BuzzFeed
News published the following statement, attributed to
Grant Simmons, the head of client
analytics for Kochava:
"The explanation provided by
Cheetah refers to SDKs meant for ad delivery in-app. The fraud
detailed in our research and the related article does not look at
in-app ad delivery from the apps in question, but instead the
syndication of fraudulent signals taking place on the device when
the apps are present," he said in an email.
In the videos, Kochava first opens a Cheetah Mobile utility app
while a large number of apps and SDKs unrelated to Cheetah Mobile's
apps are open, such as Appcoach and Webeye. These ad SDKs have no
relationship with Cheetah Mobile's utility apps. Kochava then uses
the smartphone simulator to install a new app, which causes
Appcoach or Webeye to report the installation to Kochava. But since
Appcoach and Webeye are not installed inside Cheetah Mobile's apps,
this action has nothing to do with Cheetah Mobile.
In fact, in the above simulation environment, even if you
uninstall all of Cheetah Mobile's apps, an attribution report is
generated. But by deliberately opening Cheetah Mobile's utility
apps within the simulation environment, Kochava is giving the
erroneous impression that the reports generated by the third-party
SDKs are related to Cheetah Mobile's apps. Therefore, the evidence
presented in Kochava's videos is inaccurate and misleading.
2. Kochava has alleged that all of relevant advertising SDKs
embedded in Cheetah Mobile's products are owned and developed by
Cheetah Mobile, but in fact, nearly 97% of Cheetah Mobile's
overseas utility revenue comes from third-party advertising SDKs.
These third-party SDKs can be found on all of the world's major
advertising platforms and being used on numerous mainstream global
apps. The SDKs are unrelated to Cheetah Mobile.
The following statement appears in the same BuzzFeed article
mentioned above:
The SDK involved in the suspect
activity is actually owned and developed by Cheetah, not by third
parties, according to Kochava.
Kochava's videos show that once a new app is installed,
advertising SDKs on Cheetah Mobile apps, such as Batmobi, Duapps
and Altmob, report the download data to Kochava, which then
determines attribution based on this data.
Cheetah Mobile cooperates with all of the major global
advertising platforms. Every platform provides ads on Cheetah
Mobile's apps through their own SDKs embedded on Cheetah Mobile
apps. The SDKs and third-party attribution platforms work together
to determine attribution of app installations. Cheetah Mobile is
not part of this process.
Kochava is an app attribution company, whose business model is
based on determining installation attribution from third-party
SDKs. Therefore, they fully understand that attribution is
unrelated to the app itself. In their videos, they are misleading
the media to believe that Cheetah Mobile is engaged in fraudulent
practices.
3. The media and Kochava intentionally exaggerated the
relationship between Cheetah Mobile and Kika Tech to intentionally
overstate Cheetah Mobile's influence over Kika Tech.
The article states that:
The other app is owned by Kika
Tech, a Chinese company now headquartered in Silicon Valley that
received a significant investment from Cheetah in 2016.
This statement is misleading. Kika Tech is just one of more than
80 companies that the Company has invested in. Cheetah Mobile owns
less than a five percent stake in Kika Tech and has no seats on the
board. Furthermore, the Company has zero operational control over
Kika Tech.
4. Kochava has severely damaged the reputation of a public
company with its unfounded claims. The Company reserves the right
to take legal action against Kochava.
In the same article, Grant
Simmons, head of client analytics for Kochava, is quoted as
saying:
"This is theft — no other way
to say it."
The Company finds this comment extremely hostile and
outrageous.
Cheetah Mobile is a leading global app developer with numerous
global partnerships. In the third quarter 2018, 70.31% of the
Company's overseas utility revenue came from Google and Facebook's
ad SDKs, while 26.06% came from other mainstream global ad platform
SDKs. These SDKs are used on mainstream apps throughout the
world.
Cheetah Mobile's success is based on long-term steady
development and providing users with a better user experience. The
Company is dedicated to building a healthy development model. The
Company is also committed to complying with all relevant Google
policies, GDPR, laws and regulations.
Gaia Guan, CEO of Moca
Technology, a global mobile advertising platform focused on
India and developing markets,
said, "Cheetah Mobile is a pioneering Chinese mobile app company
overseas. They are constantly focused on improving the product
experience and ad experience for users, while strictly adhering to
industry regulations and standards. In our many years working with
Cheetah Mobile, they have always put the user and advertisers
first, while treating their partnerships fairly and
transparently."
5. After investigating our third-party SDKs, the Company has
removed Batmobi and Duapps from its apps
Cheetah Mobile has cooperated with the third-party security firm
Threat Hunter to investigate the situation, particularly regarding
the advertising SDKs featured in the videos that could potentially
possess attribution risks, namely Batmobi and Duapps. To be
cautious, the Company has proactively removed them in our updated
apps. We continue to investigate, and will suspend cooperation with
any SDK providers that are found to be engaging in fraudulent
activities.
Kochava has a relatively small market share. In 2016, Kochava
publicized its cooperation with Cheetah Mobile multiple times to
raise its prestige, while seeking to expand its cooperation with
the Company. Cheetah Mobile ceased its collaboration with Kochava
in September 2016.
Cheetah Mobile rejects Kochava's accusations as baseless. The
Company will continue to place even more value on advertisers'
rights and making sure the industry develops in a healthy way. As
one of the top publishers in the world, Cheetah Mobile pledges to
redouble its efforts towards monitoring and detecting potential
issues within third-party ad SDKs and its own products in order to
ensure maximum benefits for advertisers and users alike.
About Cheetah Mobile Inc.
Cheetah Mobile is a leading mobile Internet company with global
market coverage. It has attracted hundreds of millions of monthly
active users through its mobile utility products such as Clean
Master and Cheetah Keyboard, casual games such as Piano Tiles 2,
Bricks n Balls, and live streaming product LiveMe. The Company
provides its advertising customers, which include direct
advertisers and mobile advertising networks through which
advertisers place their advertisements, with direct access to
highly targeted mobile users and global promotional channels. The
Company also provides value-added services to its mobile
application users through the sale of in-app virtual items on
selected mobile products and games. Cheetah Mobile is committed to
leveraging its cutting-edge artificial intelligence technologies to
power its products and make the world smarter. It has been listed
on the New York Stock Exchange since May
2014.
Safe Harbor Statement
This press release contains forward-looking statements.
These statements, including management quotes and business outlook,
constitute forward-looking statements under the U.S. Private
Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Such statements
involve inherent risks and uncertainties. A number of factors
could cause actual results to differ materially from those
contained in the forward-looking statements, including but are not
limited to the following: Cheetah Mobile's growth strategies;
Cheetah Mobile's ability to retain and increase its user base and
expand its product and service offerings; Cheetah Mobile's ability
to monetize its platform; Cheetah Mobile's future business
development, financial condition and results of operations;
competition with companies in a number of industries including
internet companies that provide online marketing services and
internet value-added services; expected changes in Cheetah Mobile's
revenues and certain cost or expense items; and general economic
and business condition globally and in China. Further information regarding
these and other risks is included in Cheetah Mobile's filings with
the U.S. Securities and Exchange Commission. Cheetah Mobile
does not undertake any obligation to update any forward-looking
statement as a result of new information, future events or
otherwise, except as required under applicable law.
Investor Relations Contact
Cheetah Mobile Inc.
Helen Jing Zhu
Tel: +86 10 6292 7779 ext. 1600
Email: helenjingzhu@cmcm.com
ICR Inc.
Jack Wang
Tel: +1 (646) 417-5395
Email: IR@cmcm.com
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SOURCE Cheetah Mobile