Sign in Subscribe
Information technology services industry

Sina.com Reports Strong Q2 Earnings Despite China Mobile Policy Change

Strategic Insights

— 1 min read

Sina.com, China's largest online portal, reported net profits of US$10.4 million in the second quarter, driven by strong advertising growth. The company's revenue rose 16% year-on-year to US$53.7 million, with advertising generating US$29.5 million, accounting for 55% of total revenues. The 2006 World Cup coverage on Sina.com attracted 57.6 million visitors, a new record for domestic online sports. However, non-advertising services such as value-added wireless services saw a 6% drop in revenues due to a policy change by China Mobile.

Key Takeaways:

  • Sina.com reported US$10.4 million net profits in Q2, driven by 16% year-on-year revenue growth to US$53.7 million.
  • Advertising generated US$29.5 million, accounting for 55% of total revenues in Q2.
  • The 2006 World Cup coverage on Sina.com attracted 57.6 million visitors, a new record for domestic online sports.
  • Non-advertising services such as value-added wireless services saw a 6% drop in revenues due to a policy change by China Mobile.
  • Sina predicted that its third quarter revenue would reach US$51 million to US$54 million, including US$31 million to US$32 million of advertising.
  • China Mobile's policy change required value-added wireless service providers to prolong the free trial use period, negatively impacting Sina's revenues and profits.
  • Value-added wireless services accounted for 42% of Sina's total revenues in Q2.
  • 67% of Sina's value-added wireless service revenues are earned in cooperation with China Mobile.

Statistics:

  • US$10.4 million: Sina.com's Q2 net profits
  • 16%: increase in revenue year-on-year to US$53.7 million
  • US$29.5 million: advertising revenue in Q2, accounting for 55% of total revenues
  • 57.6 million: visitors to Sina.com for the 2006 World Cup coverage
  • 6%: drop in non-advertising services revenue due to China Mobile policy change
  • US$51 million-US$54 million: predicted Q3 revenue for Sina.com
  • US$31 million-US$32 million: predicted Q3 advertising revenue for Sina.com
  • 42%: proportion of total revenues from value-added wireless services in Q2
  • 67%: proportion of value-added wireless service revenues earned in cooperation with China Mobile

Sources:

  • Sina.com's fiscal report released on August 4, 2006
  • Sina.com's press release, quoted in Asia Pulse, August 4, 2006
  • XIC (Xinhua Industrial Corporation) report, dated August 4, 2006.

Read more