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."