Sina Corp, China’s largest internet portal and media website, has registered a loss of $13.7m in its first quarter, with a profit of $15m in the same period last year.
The company claims advertising revenue increased by 9%, sending its shares up 10% in just a few hours, but that was overshadowed by rising costs, mostly on its micro-blogging site Weibo.
Analysts indicate that the online advertising market has been softening in China, and since Sina makes most of its revenue from online advertising, it is no surprise that the company has taken a hit.
The company’s CEO, Charles Chao stated that its brand advertising business had a relatively slow start in the first quarter, due to the softening of macroeconomic conditions in China.
Sina indicated that a great deal of its expenses have been due to hiring employees and setting up the infrastructure for its micro-blogging business, Weibo, but that it would none-the-less continue to invest in the company.
“The initial feedback from advertisers on our Weibo advertising is encouraging, and we believe it is critical that Sina continues its significant investments in social media and related initiatives,” commented Charles Chao.
Chinese officials criticised the spreading of ‘unfounded’ rumours, so authorities disabled the commenting function on micro-blogs, for the duration of three days. Because of this, in Beijing, users now have to register with real identities to post online.
Sina Corp is China’s largest internet portal and media website (including real estate), geared for the Chinese audience in Chinese. The company operates four major business lines: Sina Weibo, SINA Mobile, SINA Online, and SINA.net. SINA has over 100 million registered users worldwide.
Sina also owns Sina Weibo, a Twitter-like microblog social network. Weibo already has 300 million users.