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BEIJING/SAN FRANCISCO (Reuters) - Chinese Internet company Sina Corp saw record revenue in the third quarter, as profit more than doubled from a year ago due to strong earnings growth from its Weibo microblogging service and a partnership with Alibaba Group Holding Ltd.
Advertising revenue from Sina Weibo, China's biggest microblogging service with 54 million daily active users, surged 125 percent year-on-year to $43.7 million, reflecting Chinese companies' embrace of social media as a marketing tool.
Social media's expanding share of China's 28.8 billion yuan ($4.73 billion) online advertising market is favoring Sina Weibo over rivals such as Youku Tudou Inc's Internet video platforms and Tencent Holding's hugely popular mobile messaging app WeChat.
"The vast majority of the (earnings) growth should come from Weibo," Sina chief executive Charles Chao said in a call with analysts on Wednesday. He said Alibaba advertising also "played a very important role in Weibo's advertising growth."
Sina's third-quarter net income leapt 157 percent from a year ago to $25.4 million, beating forecasts of $22.8 million as revenue climbed to a record high of $184.6 million, driven by continuing growth in China's online advertising market.
Sina Weibo's value-added services pushed the microblogging service's total revenues to more than $53 million, 29 percent of total revenues.
Sina said that it expected adjusted net revenue to range between $190 million and $194 million in the fourth quarter.
"Sina Weibo towers above other platforms in adoption and leads in satisfaction," Xiaofeng Wang, a Beijing-based analyst with Forrester Research, said in a note.
Earnings from Alibaba, which bought an 18 percent stake in Sina Weibo for $586 million in April, accounted for about $20 million of revenues.
In August, Sina and Alibaba launched a service that let Weibo users shop on Alibaba's eBay-like Taobao from the microblog.
This collaboration is now bearing fruit and Sina is expanding its partnership with Alibaba affiliate AliPay, an online payment system, in the belief that mobile payment is essential for mobile monetization.
Chao said that while most of Alibaba's advertising spending was for personal computers, as the e-commerce company's products became more suited to mobile marketing it would spend more in that area. Currently, only 20 percent of Weibo's advertising revenues come from mobile.
Sina, following in the footsteps of Alibaba and China's other Internet giants Baidu Inc and Tencent, hopes to launch its own financial services product by the end of the year.
Alibaba kickstarted the wave of Chinese Internet companies jumping into finance with the launch of its Yu E Bao money market fund, which allows AliPay users to place their "leftover treasure" into the fund and earn higher rates of interest than with a bank.
To keep pace with the boom of smartphones in China, Chao said Sina was seeking acquisitions, particularly for mobile, as its cash, cash equivalent and short-term investment stockpiles reached $1.2 billion, up 75 percent from a year ago.
"We don't have a very concrete, large acquisition at this point but we are very actively looking to see which areas we can expand business growth on the longer term, and especially for mobile Internet," said Chao.
Reporting by Alexei Oreskovic in SAN FRANCISCO and Paul Carsten in BEIJING; Editing by Ken Wills