* Sina shares fall on softer-than-expected Q4 guidance
* Weibo revenue contribution rises, 424 mln users at
* Sina to launch new Weibo monetization product end-Q4
By Melanie Lee
Nov 15 Chinese Internet company Sina Corp
said its fourth quarter will be hit by a softer economy
and posted weaker-than-expected sales guidance, despite a
stronger revenue contribution from its hot microblogging
Shares in Sina fell 7 percent after it forecast adjusted net
revenue of $132 million to $136 million in the current quarter,
below analysts' expectations for $151.9 million according to
Thomson Reuters I/B/E/S.
Sina, which makes most of its revenue from online
advertising both on its website and Weibo, is facing stiff
headwinds as firms slash advertising budgets due to a worsening
"We are going to see a weaker quarter for advertising
overall in the fourth quarter," said Charles Chao, Sina's chief
executive on an earnings conference call. The firm forecast Q4
advertising revenues would rise 6-8 percent from a year earlier.
Chao said Weibo contributed 16 percent to total revenue in
the third quarter, up from 10 percent in the previous quarter.
The platform, which is very popular with white-collar workers,
university students and celebrities, had 424 million registered
users at the end of the quarter, up from 368 million three
Advertisers, like luxury brands, that traditionally don't
advertise with Sina's main portal website flocked to Weibo to
test out the social platform, Chao said.
There were about 230,000 Weibo advertising accounts in the
quarter, and Sina was in the process of rolling out a online
payment system and new Weibo advertising product to increase
monetization at the end of the fourth quarter.
"We believe a 'promoted feed advertising' will become one of
the major forms of (Weibo) advertising going forward," said
Chao, adding that the product will be effective also on mobile
platforms, allowing Sina to tap into Weibo's growth on mobile
Q3 PROFIT BEAT
For the third quarter, Sina's net profit was $9.9 million
compared with a loss of $336.3 million a year earlier, and
slighly ahead of analysts' expectations of $7.5 million.
Sina's quarterly advertising revenue rose 19 percent to
$120.6 million, while non-advertising revenue rose 9 percent to
The company started monetizing Weibo by offering special
services to business accounts and selling VIP memberships to
regular users earlier this year.
For its mobile-value-added-services business, Sina said it
expects revenue to continue to decline due to new regulatory
The company was also affected by a spat between Japan and
China over islands in the East China Sea as Japanese automakers
cut back on advertising in China. Chao said he expected the
impact to last into the fourth quarter.
"It did have an impact on our third quarter as well as our
fourth quarter. We did see cancellations from customers related
to Japanese automobiles in the month of September and it
impacted the fourth quarter (too)," Chao said.
Sina shares fell 6.74 percent to $49.52 in extended trading.
They closed at $53.10 on the Nasdaq on Thursday.