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  • Updated: 4:13pm

Sina.Com

Sina Corp is an online Chinese media group operating Sina Weibo, a Chinese-language microblog loosely modelled on Twitter. Sina Weibo has more than half of the China market. Sina Corp also owns Sina.com, which is the biggest Chinese language infotainment web portal, according to Wikipedia. 

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INTERNET

Surprise Sina profit comes with warning

PUBLISHED : Friday, 17 August, 2012, 12:00am
UPDATED : Friday, 17 August, 2012, 11:46am

Internet major Sina, which posted a surprise quarterly net profit, has warned that second-half earnings will not be "significant" and it will offer more services on its microblogging platform Weibo to boost revenue.

Sina, which makes most of its revenue from online advertising, is facing stiff headwinds this year as corporations slash advertising due to a weakening economic outlook. But the company sees social media advertising via Weibo as a bright spot for the firm.

Net profit rose to US$33.2 million in the second quarter from US$10 million a year earlier, boosted by the sale of a stake in a real estate company. That beat a US$1 million loss expected by analysts and helped Sina shares rise more than 5 per cent in after-hours trade on Wednesday.

"We do not expect to generate significant operating profits in the second half of this year," Sina chief executive Charles Chao said. "We expect to return to profitability in the third quarter on the operating level."

Sina started monetising Weibo this year by offering special services to business accounts and selling VIP memberships to regular users. Chao said 2012 would be a year of investment for Weibo as the company built up its user base and stickiness.

Sina's chief financial officer, Herman Yu, said total investment in Weibo in the second quarter was US$38 million.

"We expect the advertising revenue contribution from Weibo to accelerate in the second half of the year," Chao said. "That will help our advertising growth rate compared to the market."

Sina's advertising revenue increased 12 per cent to US$103.1 million in the second quarter, while non-advertising revenue rose 5 per cent to US$28.5 million. This meant overall net revenue was $131.6 million, up from $118.96 million a year ago.

In the second quarter, Weibo contributed about 10 per cent to total advertising revenue and had 368 million registered accounts.

"We do not expect that total monetisation on Weibo will be significant this year. Our main objective will be building the system and infrastructure for monetisation to take off next year," Chao said.

He said Weibo would add more money-making features in the second half.

For the third quarter, Sina expects adjusted net revenue to range between US$145 million and US$148 million, with advertising revenues forecast to increase between 19 per cent and 21 per cent from a year earlier.

Sina said the London Olympics would help support third-quarter earnings, as the portal and Weibo were the go-to sites for Chinese seeking news about the Games.

"The environment is still challenging," said ThinkEquity analyst Henry Guo.

But Sina's results showed advertisers viewed its web site as "must-buy inventory", he said.

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