Strong advertising sales boosted Chinese portal Sina.com's third quarter earnings 61 percent which helped offset a decline in wireless services revenue.
The strong growth in ad sales was fueled by a sharp rise in financial service ads and the portal's commercializing bloggers' space has also contributed to the sterling results.
Net income hit US$17.2 million, or 28 US cents per diluted share, compared to US$10.7 million, or 19 US cents per share, in the same period last year. Revenues grew 15 percent to US$64.3 million, Shanghai-based Sina Corp said in a statement yesterday.
Sina, China's largest portal, is relying increasingly heavily on ad sales as the non-ad business shrank in the quarter, mostly due to a decline in mobile value added services as a result of a tougher regulatory environment.
Ad revenue swelled 40 percent in the quarter to US$45.8 million, while non-ad sales fell 21 percent to US$18.5 million, which met company guidance.
Besides automobile, IT and real estate firms that are still big contributors to Sina's ad revenue, the Website saw a 220-percent year-on-year increase in financial service ad spending, thanks to China's booming stock market.
"It proves our investment in financial service is starting to pay off," said Charles Chao, chief executive officer of Sina, in a conference call, referring to deals with financial content providers in the past year as well as the launch of a live stock quote inquiry system on its site.
Sina, together with rival Sohu.com, is increasing spending on content construction and competing for resources like copyright videos from Europe's leading soccer leagues to increase traffic and attract more advertisers, which have pushed higher the overall costs for their ad sales.
Chao said Sina will enhance cost control, while stepping up efforts to monetize the huge traffic generated by its blog service, the most popular in China.
The Website began to place ads on bloggers' space under a revenue-sharing scheme late in the quarter apart from ads appearing elsewhere like the blog channel's front page. Ad sales on its blog platform soared 60 percent as companies like Samsung, BMW and China Mobile were lured to advertise in cyberspace.
Meanwhile, portals are raising ad charges on strong demand this year, which is likely to continue next year when the Olympics are held in Beijing.
(Shanghai Daily November 16, 2007)
