FMCN

[David Randolph]

Profile: Focus Media Holding Limited operates out-of-home advertising network using audiovisual television displays in China. (complete profile here)

FMCN is a $3.6 B market cap company with 2006 revenues of $213 M (price to sales ratio is 17) and 2006 EPS of $1.6 (price to earnings ratio is 46).

It operates in China and I expect foreign investors to start running away from that country, as I perceive a recession in the horizon. I believe Chinese officials don't understand they're pressing the breaks too hard, and in their attempt to cool the economy to make sure it doesn't grow more than 8%, they will end up not growing at all.

I know from experience and study that the companies that live from advertising are the ones that will sooner experience the pain of an economic slowdown. I see FMCN not living up to expectations. The stock went down 5.4% on Friday, and I expect it to go down no less than 50% as the current bear market unfolds.

Trading plan:

Sell FMCN short, 6.66% of capital as always.

[David Randolph]

FMCN opened with a gap down, so it recovered some ground to close that gap.

For as long as the stock closes below the midpoint of Thursday's red candle, which stands at $75.14, it is short term bearish. I see it opening higher today but then close lower on the session ... anyway, it is not a short term motivation that led me to short FMCN.

It is the medium term to say the least. The Chinese economy is now a $10 T economy. It is really amazing what they have accomplished over the past 10 to 20 years. But all economies are cyclical, and once in a while, a recession kicks in to clean things up. I believe that cyclical recession is due in China.

FMCN, living from advertising, will see its revenues shrink or at least not grow as much as the market is expecting, that seems obvious to me, since it is a $3.6 B market cap with 2006 revenues of just $213 M.

I'll continue holding FMCN short. 

[David Randolph]

FMCN is one of the most overvalued Chinese companies that I know of, relying entirely on advertising for its revenues. The chart shows the stock is having a rebound in a bearish trend.

I'll continue holding FMCN short for as long as the stock closes below the descending trendline on the chart below, currently at $81.59.

[David Randolph]

I have nothing to change to yesterday's trading plan for FMCN:

I'll continue holding FMCN short for as long as the stock closes below the descending trendline on the chart below, currently at $81.12.

[David Randolph]

Yesterday was tough on FMCN and I'm already losing 6.4% on the short position on this stock. Anyway, I'll keep yesterday's trading plan:

I'll continue holding FMCN short for as long as the stock closes below the descending trendline on the chart below, currently at $80.53 (the descending trendline is going down, so the risk of the trade is also going down).

[David Randolph]

My fundamental case against FMCN weakened considerably when I changed my stance towards the Chinese economy. But that didn't change the fact that the stock is overvalued, trading at 17 times sales and 46 times earnings.

The chart is also bearish now and it will continue to be bearish for as long as the stock closes below the descending trendline. The trading plan is:

Hold FMCN short for as long as it is set to close below TL1, today at $80.24.

[David Randolph]

Yesterday's update said it all:

My fundamental case against FMCN weakened considerably when I changed my stance towards the Chinese economy. But that didn't change the fact that the stock is overvalued, trading at 17 times sales and 46 times earnings.

The chart is also bearish now and it will continue to be bearish for as long as the stock closes below the descending trendline. The trading plan is:

Hold FMCN short for as long as it is set to close below TL1, today at $80.24.

The only change I need to make is that TL1 is a bit lower today, standing at $79.78 now, so the trading plan is to hold the stock short for as long as it is set to close below this descending trendline.

[David Randolph]

I'll design a sound trading plan and then let the market decide how much I should win (or lose) on this trade. With the following trading plan risk is going down and reward remains basically the same.

The trading plan for FMCN is:

1) Buy to cover with a nice profit at the 200 days moving average support, today standing at $65.6
2) Buy to cover with a small loss if the stock is set to close above TL1 on the chart below, which for today stands at $79.4.

[David Randolph]

This trade doesn't make any sense anymore, I'm a bull on the Chinese economy and this company's growth depends on that particular economy, as it is a pure China play.

I'll walk with a 1.85% loss or so. I've been wrong many times in the past, it is the way I admit mistakes that makes me have an above average long term performance. I'll keep going on that path, as assuming a mistake doesn't diminish me as a trader.

The trading plan is:

Buy to cover FMCN.

[BigSully1]

Focus Media Reports Third Quarter 2007 Results
Monday November 19, 5:00 pm ET 
Third Quarter Revenue Increased by 149.6% and Net Income Increased by 72.6% Year-over-year


SHANGHAI, China, Nov. 19 /Xinhua-PRNewswire/ -- Focus Media Holding Limited (Nasdaq: FMCN - News), China's largest digital media group, today announced its unaudited financial results for the third quarter ended September 30, 2007.

    Highlights for third Quarter 2007:
    -- Total revenues grew 149.6% year-over-year and 33.6% quarter-over-
       quarter to $151.4 million.
    -- Net income for the third quarter was $46.6 million, up 72.6% year-over-
       year and 23.6% quarter-over-quarter.  Fully diluted net income per ADS
       for the third quarter of 2007 was $0.37.  Focus Media also provides
       operating margin, net income and earnings per ADS on a non-GAAP basis
       that exclude non-cash share-based compensation expense and acquired
       intangible assets amortization expense to enable investors to better
       assess the Company's operating performance.  The non-GAAP measures are
       described below and reconciled to the corresponding GAAP measure in the
       section below titled ''Use of non-GAAP Financial Measures''.  Net
       income, excluding non-cash share-based compensation expenses and
       amortization of acquired intangible assets resulting from acquisitions
       (non-GAAP) for the third quarter was $54.6 million or $0.43 per fully
       diluted ADS.
    -- In the third quarter of 2007, digital out-of-home advertising revenue
       was $94.7 million, up 23.3% quarter-over-quarter.
       -- Advertising service revenue from our commercial location network,
          including revenue from our LCD display networks, outdoor digital and
          non-digital billboard networks (also referred to as our iStreet
          Network) and movie theater advertising network, grew 67.7% year-
          over-year and 26.5% quarter-over quarter to $64.6 million.
       -- Advertising service revenue from our in-store network was $7.1
          million, down 2.1% year-over-year and 2.2% quarter-over-quarter, due
          to the relatively more competitive environment in our in-store
          business.
       -- Advertising service revenue from our in-elevator poster frame
          network grew 104.4% year-over-year and 24.3% quarter-over-quarter to
          $23.1 million.
    -- Mobile handset advertising revenue grew 298.9% year-over-year and 28.9%
       quarter-over-quarter, to $14.0 million in the third quarter 2007.
    -- Internet advertising revenue was $42.5 million in the third quarter of
       2007, up 68.5% quarter-over-quarter.

''We have achieved another record quarterly revenue and profit in the third quarter 2007. During the quarter, we saw robust advertising demand for our digital media offerings. Our Internet advertising business grew strongly in the quarter after several small acquisitions to strengthen the market leadership of Allyes. Although the gross margin of our Internet advertising business was lower than the previous quarter due to the consolidation of newly acquired entities, we believe the gross margin of our Internet business will trend up in the future as we leverage Allyes' strong technology platform to improve the operations of these acquired businesses. We are well positioned to capitalize on the expected strong demand growth in the China advertising market in 2008,'' said Jason Jiang, CEO of Focus Media. ''In addition, our mobile handset advertising business continues to demonstrate strong growth potential. We believe its highly targeted ad delivery to mobile users based on demographic or location-based information is increasingly gaining acceptance by advertisers. In order to maximize shareholder value, we are evaluating a potential option for a separate listing of our mobile handset advertising business in Hong Kong or the United States.''

Third Quarter Financial Results

For the third quarter of 2007, Focus Media reported total revenues of $151.4 million, an increase of 149.6% compared to $60.6 million for the third quarter of 2006, and an increase of 33.6% compared to $113.3 million for the second quarter of 2007.

Our total digital out-of-home advertising revenue was $94.7 million in the third quarter of 2007, an increase of 66.1% from $57.0 million in the third quarter of 2006 and a sequential increase of 23.3% from $76.9 million in the second quarter of 2007. In the third quarter of 2007, commercial location advertising revenue was $64.6 million, contributing 68.2% of total digital out-of-home advertising revenue. Advertising service revenue from our in- store network was $7.1 million, or 7.5% of total digital out-of-home advertising revenue. Advertising service revenue from our in-elevator poster frame network placed primarily in the elevators of residential complexes was $23.1 million in the third quarter of 2007, or 24.3% of total digital out-of- home advertising revenue.

As of September 30, 2007, the total installed base of LCD displays in our commercial location network was 95,398 nationwide, including 90,375 displays through our directly owned networks, and 5,023 displays through our regional distributors. In the third quarter of 2007, we continued to expand the installed base of our hypermarkets to 1,266 stores as of September 30, 2007 from 1,205 hypermarkets as of June 30, 2007. Our in-store network also covers 695 supermarkets and 2,080 convenience stores as of September 30, 2007. The number of displays installed in our in-store network increased to 43,315 as of September 30, 2007 compared to 41,322 as of June 30, 2007. The total number of non-digital frames available for sale on our poster frame network was 163,455 as of September 30, 2007. In addition, as of September 30, 2007, we had installed 7,150 digital 2.0 frames, mainly in Beijing, Shanghai, Guangzhou and Shenzhen.

Mobile Advertising Business

Advertising service revenue from Focus Media Wireless in the third quarter of 2007 was $14.0 million, up 298.9% from $3.5 million in the third quarter of 2006 and 28.9% from $10.9 million in the second quarter of 2007.

Internet Advertising Business

Internet advertising service revenue was $42.5 million in the third quarter of 2007, up 68.5% from $25.2 million in the second quarter of 2007. Digital marketing service accounted for 94.0% of the total Internet advertising revenue. Rich Media, pay-for-performance and technology solutions accounted for the remaining 6.0%.

Gross profit for the third quarter of 2007 was $77.1 million, representing an increase of 99.9% compared to $38.6 million for the corresponding period a year ago and a 24.7% increase compared to $61.8 million in the second quarter 2007. In the third quarter 2007, gross margin for our digital out-of-home business was 62.7%. Within our digital out-of-home advertising networks, commercial location network gross margin was 64.7%, in-store network gross margin was 17.7%, and the in-elevator poster frame network gross margin was 71.1%. Commercial location gross margin was impacted by the acquisition of a leading outdoor billboard operator in China, which operates over 200 highly attractive outdoor billboard locations in major commercial centers in China. Excluding the non-digital outdoor billboard business we acquired in the second quarter of 2007, commercial location gross margin would have been 74.6%. We plan to upgrade some of these sites to digital LED billboards upon expiration of the current contracts with advertisers. The acquisition provides Focus Media with a stronger strategic position for the growth of outdoor digital billboard business in the future. The gross margin for our mobile advertising business was 56.2% in the third quarter of 2007. The gross margin for our Internet advertising business was 23.0% in the third quarter 2007, lower than the previous quarter due to several small acquisitions to strengthen the market leadership of Allyes. Blended gross margin for the company for the third quarter was 50.9%, as compared to 54.6% in the second quarter of 2007, primarily due to the contribution of the lower-margin Internet advertising business and in-store business.

In the third quarter of 2007, operating expenses totaled $30.0 million, including $1.1 million in acquired intangible asset amortization resulting from acquisitions and non-cash share-based compensation expense of $4.4 million. Operating expenses as a percentage of total revenues in the third quarter 2007 was 19.8%, as compared to 20.9% in the previous quarter. Selling and marketing expenses in the third quarter totaled $19.1 million including $2.4 million in share compensation expense, or 12.6% of total revenues. General and administrative expense in the third quarter was $12.1 million including $2.0 million in share-based compensation expense, or 8.0% of total revenues. Our operating margin in the third quarter of 2007 was 31.1%, as compared to 33.7% in the second quarter 2007. Excluding non-cash share-based compensation expense and acquired intangible asset amortization expense, operating margin (non-GAAP) was 36.4% in the third quarter 2007. Operating expenses in the third quarter of 2007 also include a one-time expense of approximately $2.1 million relating to the recent Audit Committee inquiry.

Net income for the third quarter of 2007 was $46.6 million, an increase of 72.6% compared to $27.0 million for the same period in 2006, and 23.6% compared to $37.7 million for the second quarter of 2007. Fully diluted net income per ADS for the third quarter of 2007 was $0.37. Net income excluding non-cash share-based compensation expense and acquired intangible assets amortization expense resulting from acquisitions (non-GAAP) in the third quarter of 2007 was $54.6 million, or $0.43 per fully diluted ADS.

Other Recent Developments

In November 2007, Focus Media and certain of its shareholders, consisting mainly of the former shareholders of Framedia, Dotad and Allyes, completed a secondary offering. In this offering, Focus Media sold 5,000,000 ADSs of newly issued shares and various selling shareholders sold 8,720,873 ADSs to the public.

On September 28, 2007, Mr. David Ying Zhang was appointed to Focus Media's board of directors as an independent director. Mr. Zhang is the managing director and head of the Beijing office of WI Harper, a private equity fund. With the appointment of Mr. Zhang, Focus Media's board regained a majority of independent directors.

BUSINESS OUTLOOK

The Company estimates its total revenues for the forth quarter of 2007 will range from $160 million to $170 million. Fourth quarter 2007 net income excluding share-based compensation expense and intangible assets amortization expense resulting from acquisitions (non-GAAP) is expected to be between $62 million and $64 million or $0.48 to $0.50 per fully diluted ADS based on 129 million total ADS-equivalent average shares outstanding.

USE OF NON-GAAP FINANCIAL MEASURES

In addition to Focus Media's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP operating margin, non-GAAP net income and non-GAAP earnings per fully diluted ADS, all excluding non-cash share-based compensation and acquired intangible asset amortization expense resulting from acquisitions. The Company believes that these non-GAAP financial measures provide investors with another method for assessing Focus Media's operating results in a manner that is focused on the performance of its ongoing operations. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non- GAAP results in the attached financial information.

The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the performance of Focus Media and when planning and forecasting future periods. The Company computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The accompanying tables have more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliation between these financial measures.




                           Focus Media Holding Ltd.
                      Reconciliation of GAAP to Non-GAAP
                (U.S. Dollar in thousands, except share data)
                                 (Unaudited)

                          Three months ended             Nine months ended
                  2007-9-30   2006-9-30    2007-6-30   2007-9-30    2006-9-30

    GAAP net
     income
     attributable
     to
     shareholders  $46,613     $27,005      $37,715    $100,620      $53,109
    Amortization
     of acquired
     intangible
     assets          3,287       1,577        2,672       7,891        4,070
    Share-based
     compensation    4,679       1,569        4,919      14,115        4,932
    Non-GAAP
     net income    $54,579     $30,151      $45,306    $122,626      $62,111

    GAAP income
     per ADS
     - basic         $0.38       $0.26        $0.33       $0.87        $0.54
    GAAP income
     per ADS
     - diluted       $0.37       $0.25        $0.32       $0.84        $0.52
    Non-GAAP
     income per
     ADS - basic     $0.45       $0.29        $0.39       $1.06        $0.63
    Non-GAAP
     income per
     ADS - diluted   $0.43       $0.28        $0.38       $1.03        $0.61

    Shares
     used in
     calculating
     basic
     GAAP/
     Non-GAAP
     income
     per ADS   122,250,042 105,113,194  115,701,382 115,883,549   98,232,890
    Shares
     used in
     calculating
     diluted
     GAAP/
     Non-GAAP
     income
     per ADS   126,370,818 109,293,170  119,385,064 119,471,360  102,375,332

    GAAP
     income
     from
     operations    $47,122     $25,839      $38,164     $99,730      $51,970
    Amortization
     of acquired
     intangible
     assets          3,287       1,577        2,672       7,891        4,070
    Share-based
     compensation    4,679       1,569        4,919      14,115        4,932
    Non-GAAP
     income
     from
     operations    $55,088     $28,985      $45,755    $121,736      $60,972

    Non-GAAP
     operating
     margin          36.4 %      47.8 %       40.4 %      37.8 %       42.4 %



TODAY'S CONFERENCE CALL

Focus Media will host a conference call to discuss the third quarter 2007 financial results and forth quarter 2007 business outlook at 8:00 p.m. U.S. Eastern Time on November 19, 2007 (5:00 p.m. U.S. Pacific Time on November 19, 2007; 9:00 a.m. Beijing/Hong Kong time on November 20, 2007). The dial-in details for the live conference call are: U.S. Toll Free Number +1-800-884- 5695, Hong Kong dial-in number +852-3002-1672, International dial-in number +1-617-786-2960; Pass code 26895957.

A replay of the call will be available from November 19, 2007 until November 26, 2007 (US Eastern Time). The dial-in details for the replay are: U.S. Toll Free Number +1-888-286-8010; international dial-in number +1-617- 801-6888; pass code 78870211. A webcast of this call will also be available live and archived on Focus Media's website at http://ir.focusmedia.cn .

ABOUT FOCUS MEDIA HOLDING LIMITED

Focus Media Holding Limited (Nasdaq: FMCN - News) is China's leading multi- platform digital media company, operating the largest out-of-home advertising network in China using audiovisual digital displays, based on the number of locations and number of flat-panel television displays in our network, and is also a leading provider of mobile handset advertising and Internet marketing solutions in China. Through Focus Media's multi-platform digital advertising network, the company reaches urban consumers at strategic locations and point- of-interests over a number of media formats, including audiovisual television displays in buildings and stores, advertising poster frames and other new and innovative media, such as outdoor light-emitting diode or LED digital billboard, mobile handset advertising networks and Internet advertising platforms. As of September 30, 2007, Focus Media's digital out-of-home advertising network had approximately 95,398 LCD display in its commercial location network, approximately 43,315 LCD displays in its in-store network and 170,605 advertising in-elevator poster frames, installed in over 90 cities throughout China, and approximately 200 outdoor LED billboard displays in Shanghai. For more information about Focus Media, please visit our website at http://ir.focusmedia.cn .

SAFE HARBOR: FORWARD-LOOKING STATEMENTS

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of 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. Among other things, the Business Outlook section and quotations from management in this press release, as well as Focus Media's strategic and operational plans, contain forward-looking statements. Focus Media may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Focus Media's beliefs and expectations, are forward-looking statements. Forward- looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in Focus Media's filings with the U.S. Securities and Exchange Commission, including its registration statements on Form F-1, F-3, F-6 and 20-F, in each case as amended. Focus Media does not undertake any obligation to update any forward-looking statement, except as required under applicable law.



                         Focus Media Holding Limited
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                         (U.S. Dollars in thousands)

                                                 2007-9-30        2006-12-31
    ASSETS
    Current assets
      Cash and cash equivalents                   $190,243          $164,611
      Investment in equity securities               51,961                --
      Accounts receivables, net                    169,800            61,614
      Inventories                                    2,449               519
      Prepaid expenses and other current
       assets                                       20,109             5,199
    Deposit paid for acquisition of
     subsidiaries                                   43,423             3,526
      Amount due from related parties                4,240             7,853
      Rental deposits                               31,333                --
    Total current assets                          $513,558          $243,322
     Rental Deposits                                 3,290            11,833
     Equipment, net                                 83,617            70,250
     Acquired intangible assets, net                74,219            34,717
     Goodwill                                      928,450           739,744
     Other long term assets                         35,430             6,376
    Total assets                                $1,638,564        $1,106,242

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
     Short term debt                                   $--            $2,769
     Accounts payable                               48,344             5,987
     Accrued expenses and other current
      liabilities                                   95,261            38,674
     Income taxes payable                           12,560             4,060
     Amount due to related parties                   7,948               347
    Deferred tax liabilities                         1,125                --
    Total current liabilities                     $165,238           $51,837

    Deferred tax liabilities                         6,218             3,303
    Total liabilities                             $171,456           $55,140

     Minority interests                                496               358

     Shareholders' equity
     Ordinary shares                                    31                27
     Additional paid in capital                  1,247,971           709,196
     Acquisition consideration to be                    --
      issued                                                         237,879
     Retained earnings                             195,347            96,195
     Accumulated other comprehensive
      income                                        23,263             7,447
     Total shareholders' equity                 $1,466,612        $1,050,744
     Total liabilities and shareholders'
      equity                                    $1,638,564        $1,106,242


                         Focus Media Holding Limited
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                (U.S. Dollar in thousands, except share data)

                           Three months ended            Nine months ended
                  2007-9-30     2006-9-30   2007-6-30   2007-9-30   2006-9-30
                 (unaudited)   (unaudited) (unaudited) (unaudited) (unaudited)
    Gross
    revenues
    (note 3):
    Digital
    out-of-home
     Commercial
      locations    $70,173       $42,581      $55,368    $160,459     $99,448
     In-store
      network        7,813         8,002        7,998      23,137      21,055
     In-elevator
      poster
      frame
      network       25,121        12,386       20,347      59,322      29,780
     Mobile
      handset
      advertising   14,627         3,801       11,268      31,915       7,166
     Internet
      advertising   44,234            --       26,418      70,652          --
     Other
      revenue          117            90          305         803         780
    Total
     gross
     revenues      162,085        66,860      121,704     346,288     158,229
    Less:
     Sales
     taxes          10,693         6,213        8,429      24,281      14,320
    Total
     revenues      151,392        60,647      113,275     322,007     143,909

    Cost of
    revenues
    (note 4):
    Digital
    out-of-home
     Commercial
      locations     22,825        11,428       17,868      53,591      31,141
     In-store
      network        5,832         4,616        5,187      16,046      12,983
     In-elevator
      poster
      frame
      network        6,656         3,732        5,265      16,667       9,746
     Mobile
      handset
      advertising    6,145         2,219        4,569      13,468       4,624
     Internet
      advertising   32,718            --       18,405      51,123          --
    Total
     advertising
     service
     costs          74,176        21,995       51,294     150,895      58,494
    Other
     costs             121            80          138         424         392
    Total cost
     of revenues    74,297        22,075       51,432     151,319      58,886
    Gross profit    77,095        38,572       61,843     170,688      85,023

    Operating
     expenses:
    General
     and
     administrative
     (note 4)       12,095         5,956       11,646      32,424      16,650
    Selling
     and
     marketing
     (note 4)       19,081         6,782       13,154      42,121      16,565
    Other
     operating
     income         (1,203)           (5)      (1,121)     (3,587)       (162)
    Total
     operating
     expenses       29,973        12,733       23,679      70,958      33,053
    Income
     from
     operations     47,122        25,839       38,164      99,730      51,970
    Interest
     income, net     1,595         1,070        1,870       6,158       2,563
    Other
     income
     (expenses),
     net                5          (176)           12         109        (655)
    Income
     before
     tax and
     minority
     interests     48,722        26,733        40,046     105,997      53,878
     Income
      tax
      expense
      - Current     2,063          (134)        2,683       5,847         484
      - Deferred       46          (183)         (365)       (452)        189
     Total
      income
      taxes         2,109          (317)        2,318       5,395         673
    Income
     before
     minority
     interests      46,613        27,050       37,728     100,602      53,205
    Minority
     Interests          --            45           13         (18)         96
    Net income     $46,613       $27,005      $37,715    $100,620     $53,109

     Income
      per ADS
      - basic        $0.38         $0.26       $0.33       $0.87       $0.54
     Income
      per ADS
      - diluted      $0.37         $0.25       $0.32       $0.84       $0.52
     Shares
      used in
      calculating
      basic
      income
      per ADS  122,250,042   105,113,194 115,701,382 115,883,549  98,232,890
     Shares
      used in
      calculating
      diluted
      income
      per
      ADS      126,370,818   109,293,170 119,385,064 119,471,360 102,375,332



                         Focus Media Holding Limited
           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
                          (U.S. Dollar in thousands)

                              Three months ended        Nine months ended
                             2007-9-30  2006-9-30    2007-9-30     2006-9-30

    Operating activities:
    Net income                 $46,613    $27,005     $100,620       $53,109
    Adjustments to
     reconcile net
     income to net cash
     provided by
     operating activities:
    Minority interest               --         45          (18)           96
    Bad debt provision             320        627        2,736         1,397
    Share based
     compensation                4,679      1,569       14,115         4,932
    Depreciation and
     amortization                5,114      3,714       13,222         9,844
    Amortization of
     acquired intangible
     assets                      3,287      1,577        7,891         4,070
    Changes in assets and
     liabilities,
     net of effects of
     acquisitions              (19,174)    (5,695)     (41,157)      (27,214)
      Net cash provided by
            operating
            activities         $40,839    $28,842      $97,409       $46,234

    Investing activities:
    Purchase of equipment
     and other long
     term assets               (11,659)    (1,696)     (36,924)      (13,304)
    Acquisition of an
     intangible asset               --         --         (105)           --
    Purchase of
     subsidiaries, net of
     cash acquired               2,334    (35,768)     (54,440)     (122,827)
    Deposits paid to
     acquire
     subsidiaries              (25,004)    (2,800)     (60,272)       (2,800)
    Investment in
     equity securities          (8,830)        --      (49,545)           --
    Net cash used in
     investing activities     $(43,159)  $(40,264)   $(201,286)    $(138,931)

    Financing activities:
    Proceeds from issuance
     of ordinary shares,
     net of issuance costs         475      5,710      120,733       154,390
    Proceeds from
     short-term debts               --         --           --        24,598
    Capital injection from
     minority shareholders          40         --          137           249
    Repayment of short-term
     debts                        (394)   (23,351)      (4,165)      (29,402)
    Net cash provided by
     financing activities         $121   $(17,641)    $116,705      $149,835
    Effect of exchange rate
     changes                     4,850      1,488       12,805         1,318

    Net (decrease) increase
     in cash and
     cash equivalents           $2,651   $(27,575)     $25,633       $58,456
    Cash and cash
     equivalents, beginning
     of period                 187,592    122,684      164,610        36,653

    Cash and cash
     equivalents, end of
     period                   $190,243    $95,109     $190,243       $95,109

    Supplemental disclosure
     of cash flow
     information:
    Income taxes paid             $461        $12       $1,038           $30
    Interest paid                   $6       $218           $6          $245


    Supplemental disclosure of non-cash
     investing activity:
    Acquisition of subsidiaries:
      Value of ordinary share
       consideration                         $--      $--  $166,050 $365,660
      Accounts payable                    $6,143     $277    $6,143     $277


    Notes:

    Note 1: Basic income per ADS is computed by dividing income attributable
            to holders of ordinary shares by the weighted average number of
            ADS outstanding during the year/period. Diluted income per ADS
            reflects the potential dilution that could occur if securities or
            other contracts to issue ADS were exercised or converted into ADS.

    Note 2: The conversion of Renminbi (''RMB'') amounts into USD amounts is
            based on the rate of USD1 = RMB7.5108 on September 28, 2007.

    Note 3: Details of net revenues are as follows (U.S. Dollars in thousands):


                         Three months ended            Nine months ended
                  2007-9-30  2006-9-30  2007-6-30     2007-9-30    2006-9-30
    Gross
     Advertising
    Service
     Revenue:
    Digital
     out-of-home:
    Commercial
     locations
      - Unrelated
        parties     $70,091    $37,101    $55,321      $157,825      $87,586
      - Related
        parties          82      5,480         47         2,634       11,862
    Total
     Commercial
     Locations       70,173     42,581     55,368       160,459       99,448
    In-store
     Network
      - Unrelated
        parties       7,813      6,610      7,998        21,822       17,617
      - Related
        parties          --      1,392         --         1,315        3,438
    Total
     In-store
     network          7,813      8,002      7,998        23,137       21,055
    In-elevator
     Poster Frame
     Network
      - Unrelated
        parties      25,029     12,386     20,249        59,132       29,780
      - Related
        parties          92         --         98           190           --
    Total
     In-elevator
     Poster Frame
     Network         25,121     12,386     20,347        59,322       29,780

    Mobile
     handset
     advertising
      - Unrelated
        parties      14,592      3,801     11,179        31,791        7,166
      - Related
        parties          35         --         89           124           --
    Total mobile
     handset
     advertising     14,627      3,801     11,268        31,915        7,166

    Internet
     advertising
      - Unrelated
        parties      43,552         --     26,088        69,640           --
      - Related
        parties         682         --        330         1,012           --
    Total
     internet
     advertising     44,234         --     26,418        70,652           --

    Gross
     Advertising
     Services
     Revenue:       161,968     66,770    121,399       345,485      157,449

    Less: Sales
     taxes:
    Digital
     out-of-home:
    Commercial
     locations:       5,584      4,063      4,308        13,166        9,111
    In-store
     Network            726        763        754         2,168        1,984
    In-elevator
     Poster Frame
     Network          2,058      1,102      1,799         5,042        2,651
    Mobile
     handset
     advertising        602        285        386         1,000          574
    Internet
     advertising      1,723         --      1,182         2,905           --
    Total sales
     taxes:          10,693      6,213      8,429        24,281       14,320

    Net
     Advertising
    Service
     Revenue        151,275     60,557    112,970       321,204      143,129
    Add: Other
     revenue:           117         90        305           803          780
    Net revenues:  $151,392    $60,647   $113,275      $322,007     $143,909


    Note 4: Share based compensations included under SFAS 123R are as follows
            (U.S. Dollars in thousands):

                         Three months ended              Nine months ended
                  2007-9-30  2006-9-30  2007-6-30     2007-9-30    2006-9-30

    Cost of
     revenues          $288        $--       $284          $853          $--
    Selling and
     marketing        2,374        211      2,084         6,519          889
    General and
     administrative   2,017      1,358      2,551         6,743        4,043
    Sub-total        $4,679     $1,569     $4,919       $14,115       $4,932


    Note 5: The Company has performed preliminary purchase price allocation on
            their acquisition made in the fourth quarters of 2006 and the
            first three quarters of 2007 based on an internal valuation
            performed by management.  The purchase price allocation will be
            finalized once the independent valuation analysis is completed.

    Note 6: The earnings per ADS is based on the new conversion ratio of 1 ADS
            to 5 ordinary shares, effective as of April 11, 2007.  The
            comparative numbers haven been adjusted to reflect the conversion.



                           Focus Media Holding Ltd.
                      Reconciliation of GAAP to Non-GAAP
   (U.S. Dollar in thousands, except percentages, share and per-share data)
                                 (Unaudited)

                              Three months ended          Nine months ended
                      2007-9-30   2006-9-30   2007-6-30 2007-9-30   2006-9-30

    GAAP net
     income
     attributable
     to shareholders   $46,613     $27,005     $37,715  $100,620      $53,109
    Amortization
     of acquired
     intangible
     assets              3,287       1,577       2,672     7,891        4,070
    Share-based
     compensation        4,679       1,569       4,919    14,115        4,932
    Non-GAAP net
     income            $54,579     $30,151     $45,306  $122,626      $62,111

    GAAP income
     per ADS
     - basic             $0.38       $0.26       $0.33     $0.87        $0.54
    GAAP income
     per ADS
     - diluted           $0.37       $0.25       $0.32     $0.84        $0.52
    Non-GAAP
     income per
     ADS - basic         $0.45       $0.29       $0.39     $1.06        $0.63
    Non-GAAP
     income per
     ADS - diluted       $0.43       $0.28       $0.38     $1.03        $0.61

    Shares used
     in calculating
     basic GAAP/
     Non-GAAP
     income per
     ADS           122,250,042 105,113,194 115,701,382 115,883,549  98,232,890
    Shares used
     in calculating
     diluted
     GAAP/Non-GAAP
     income per
     ADS           126,370,818 109,293,170 119,385,064 119,471,360 102,375,332

    GAAP income
     from
     operations        $47,122     $25,839     $38,164   $99,730      $51,970
    Amortization
     of acquired
     intangible
     assets              3,287       1,577       2,672     7,891        4,070
    Share-based
     compensation        4,679       1,569       4,919    14,115        4,932
    Non-GAAP
     income from
     operations        $55,088     $28,985     $45,755  $121,736      $60,972

    Non-GAAP
     operating
     margin              36.4 %      47.8 %      40.4 %    37.8 %       42.4 %




    For more information, please contact:

     Jie Chen
     Tel:   +86-21-3212-4661 x6607
     Email: [email protected]