AP News, February 8th, 2007
Sina Corp., China's most popular Web portal, said Thursday its fourth-quarter profits fell 15 percent due to higher expenses and a drop in revenues for mobile services.
Sina reported earnings of $11.7 million, or 20 cents per share, down from $13.8 million, or 24 cents per share, in the same quarter of 2005.
Sina reported strong online advertising growth, with revenues in China up 44 percent from the year-earlier quarter. The company said online ads account for 63 percent of its total revenues.
"We see great potential for online advertising growth in the next two years," CEO Charles Chao told analysts in a conference call.
Chao said Sina expects ad revenues to grow strongly as advertisers roll out campaigns for the 2008 Beijing Olympics.
China has the world's second-biggest population of Internet users after the United States with 137 million people online, though it trails the U.S., South Korean and other markets in financial terms.
Sina is China's most popular content-oriented Web portal, offering sports and entertainment news, games and other services. It has expanded into online video and a blog service.
Chao said traffic for Sina's blogs jumped by 10 times last year to more than 120 million page views per day, though the company has yet to begin earning revenues from the service.
In mobile services, fourth-quarter revenues fell 28 percent from the same period of 2005 amid regulatory and billing changes that have hit all of China's mobile services.
"We believe we will continue to experience further revenue decline in our mobile business in the first quarter of 2007," the chief financial officer, Herman Yu, said on the conference call.
He said Sina plans to stay in wireless services but will watch expenses closely.
For full fiscal 2006, profits were $39.9 million, or 69 cents per share, down from 2005's $43.1 million, or 75 cents per share.
Sina's U.S.-traded shares rose $4.20, or 12.71 percent, to close at $37.25 on the Nasdaq Stock Market.
Sina rival Sohu.com Inc., China's No. 2 portal, said this week its fourth-quarter earnings fell 32 percent on lower wireless revenues and higher advertising costs.
