Sina’s Chinese Internet Profit Plummets As Company Focuses On Microblogging

Chinese online media and mobile value-added services firm Sina Corporation says its profit fell more than 50% as it announced its unaudited financial results for the second quarter ended June 30, 2011.

While the company’s net revenues grew 20% year over year to USD119.0 million, net income attributable to Sina for the second quarter of 2011 was USD10.0 million, compared to USD25.2 million for the same period last year.

“Sina’s brand advertising business was robust in the second quarter, despite growing on top of a large base, in part benefiting from the elevation of Sina’s media brand as the popularity of Weibo.com spread in China,” said Charles Chao, CEO of Sina.

Weibo.com is Sina’s microblogging service.

Brand advertising revenues for the second quarter of 2011 were USD91.8 million, compared to USD73.1 million for the same period last year. Non-advertising revenues for the second quarter of 2011 totaled USD27.2 million, compared to USD26.3 million for the same period last year. MVAS revenues for the second quarter of 2011 amounted to USD19.5 million, compared to USD20.0 million for the same period last year.

Gross margin for the second quarter of 2011 was 57%, down from 58% for the same period last year. Operating expenses for the second quarter of 2011 totaled USD59.7 million, compared to USD32.0 million for the same period last year.

As of June 30, 2011, Sina’s cash, cash equivalents and short-term investments totaled USD826.4 million, compared to USD882.8 million as of December 31, 2010. The company says the decrease in the cash balance was mainly due to acquiring approximately a 19% interest in Mecox Lane Limited in the first quarter of 2011.