Sina sees big quarterly growth in net profits, fueled by Weibo

Source: Analysys International Graphics: GT

Chinese leading Internet media company Sina Corp released its unaudited financial report for the third quarter of 2013 Wednesday, indicating a more than doubled year-on-year growth in net profit, driven by its Weibo service.

Its net income reached $25.4 million during the three months through September, 157 percent up year-on-year, according to the third-quarter financial report.

"We are satisfied with the performance and the profit significantly increased due to the strong growth of Weibo service," Cao Guowei, CEO of Sina, said in a conference call with analysts after the report release, Reuters reported Wednesday.

Advertising revenues rose 26 percent year-on-year to $151.6 million and non-advertising revenue increased 4 percent year-on-year to $33.1 million, mainly driven by the revenue of Weibo value-added services (VAS), including Weibo membership fees and web games, the financial report said, noting the Weibo VAS revenue stood at $9.7 million, 121 percent up year-on-year.

More than 10 percent of Weibo's revenues in the third quarter came from advertisements in its news feed, and this kind of advertisement will continue to increase, Cao was quoted by news portal qq.com on Wednesday as saying.

Commercialization of Weibo is a reasonable trend and Sina has attracted enough users for that, Zhang Yi, CEO of iiMedia Research Group, told the Global Times Wednesday.

Advertisements in news feed may disturb users if it is not done smartly, Ding Jiaqi, an analyst with iResearch, told the Global Times. The amount of this kind of advertisement should be controlled and promoted based on analyses of users' interests and reading content, said Ding.

Sina will provide more interesting and relevant advertising and services based on user behaviors, the financial report said.

In addition to improving service, Sina is also faced with competition.

In the third quarter, Weibo service provided by Tencent Holdings Ltd had 106.331 million active users, surpassing Sina Weibo which had 88.76 million active users, according to data released by consultancy Analysys International on October 17.

Weibo is also faced with threats from instant messaging services on the mobile front, such as WeChat, which is launched by Tencent in 2011 and has attracted more than 600 million users, according to media reports.

Weibo and WeChat partly overlap, but they have different features, Zhang said, noting WeChat is more private and not as suitable as Weibo for business promotion and information disclosure.

More than 40 percent of Weibo users are using Weibo on their cellphones instead of PCs, Ding said, noting the mobile Internet has a big share in users.

Sina may acquire other companies, especially in the mobile Internet sector, which is Sina's main concern now, according to qq.com's report.