Fourth-quarter profits for Sina Corp, which operates one of China’s largest internet portals, fell 15% after trying to gain an edge on competitors Baidu and Google, and after getting hammered by additional billing regulations on its wireless services division.
The Shanghai-based corporation saw earnings fall to about $11.7 million from $13.8 million last year. Revenue from non-advertising sources fell 23%, which Sina attributes to a decrease in revenue from wireless value-added services like text messaging and the sale of ringtones and wallpapers due to last year’s new mobile billing rules.
Baidu, the main player in the Chinese search market, holds 57% of the Chinese search market, said Beijing-based research firm Analysys International according to the Shanghai Daily. Sina’s search market share fell from 2.7% to 1.7%.
Despite the loss, Sina’s total revenue actually rose about 9%. Also, revenue from advertising increased dramatically, primarily due to operations in mainland China. “Our focus on the online media business has led to enhanced brand recognition, strong user and traffic growth, and an impressive 44% year-over-year increase in online advertising revenues in China,” said CEO Charles Chao in a statement. “We begin 2007 with continuing momentum from our online advertising business, which makes up 63% of our total revenues as of this quarter.”
And despite the earnings drop, Sina actually performed above Wall Street expectations, driving stock prices up.