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China's top Internet portal Sina Corp yesterday reported a fall in its business results in the second quarter, due to a continued slow-down in its wireless revenues. However, the company said it would continue to focus on and increase its advertising business.
Sina said yesterday that its net profits in the quarter ending June fell by 45 percent year-on-year to US$10 million, or 17 US cents per diluted American depository share on the NASDAQ in New York. Its ADS on the NASDAQ fell by 4.2 percent to US$27.78 after the results were announced.
"The quarter ending June can be regarded as a quarter when we focused our energy on our core internet business, while making preparation for a recovery in our wireless business," said Wang Yan, chief executive officer of the Chinese Internet company, in a conference call.
Sina reported that its revenues fell by 6 percent year-on-year to US$46.1 million in the quarter.
The biggest online advertising company in China saw a strong growth in its advertising business with a 31 percent year-on-year growth to US$20.4 million, due to higher customer spending.
However, Sina continued to see its non-advertising business, the major part being its wireless value-added business, keep falling to US$25.8 million, 24 percent lower than the same period last year, and 12 percent down on the previous quarter.
The company said the declines were mainly results of regulatory changes, including a closure of some of Sina's services and a change of billing system by the country's dominant mobile carrier China Mobile.
Despite the difficulties in its wireless business, the most influential Chinese internet portal said the process of recovery will begin this quarter.
"We believe this quarter will serve as a sound base for us to reignite our growth for the remainder of the year," said Wang.
The company predicted its revenues to be between US$49-52 million and profits expected to be US$13-14 million.
Hurst Lin, co-chief operating officer of the company, said that after its launch in June, search engine iAsk will be a top focus for Sina Corp.
Lin said in an interview on Wednesday that Sina will adopt a different strategy from companies like Google and Chinese firm Baidu.com, with a focus on the accuracy and authoritativeness of the search results.
The iAsk search engine aims to be a traditional search engine like Google, with the difference being that searchers get authoritative results rather than just a sea of results. Users will also be able to share ideas with each other.
Lin said his company would not focus on selling paid listings like smaller companies such as Baidu, Sohu and Yahoo! China. Instead they would concentrate on online advertising, one of Sina's core strengths.
(China Daily August 5, 2005)
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