2/02/07
SINA Corporation has a very strong online media platform, which focuses mainly on China and the millions of Chinese emigrants living worldwide. The company generates revenue through advertising, mobile value added services (MVAS), e-commerce and enterprise services.
Revenues in the first nine months of 2006 have been up mainly due to the increase in advertising revenues, but the decline in MVAS raises some concerns. The Chinese wireless services market is in its growth stage. The wireless services market is expected to grow 18% through 2010. Adding to the delight is the expected launch of 3G standard in 2007, which will hopefully increase its customer base, translating into higher revenues. But the competition seems to be high, as China being the largest market for mobile phones, is vulnerable to attack from foreign players, with the five-year protection of the telecom industry allotted by the WTO is coming to an end.
But there seems to be no other reason for SINA to sweat, as the Chinese online advertising market is expected to increase fivefold by 2010. The internet has a 20% penetration among the urban population in China and it is expected that banner or display advertising will remain the preferred form of online advertising over the next 3 years. A higher portion of the population is adopting broadband connections and to take maximum advantage of this trend, the company re-launched its video channel, which offers 30 channels providing programs all day.
It has also launched a new search engine called IAsk, which it plans to monetize in 2007. SINA sports have signed contracts with major European football leagues to host their official websites and also broadcast their games on Internet TV. Additionally 23 out of 25 top brand names in China, have selected SINA as their online marketing partner. With the company well positioned to ride the online advertising boom in China, year 2007 will be a revenue momentum story for the company.
5/03/07 8:09 AM
Sina Inc, the Chinese online media company is well positioned to make use of the lucrative search engine advertising market. Sina’s 2006 revenues increased 10% year-over-year to $212.8 million, driven by substantial growth in advertising revenues. Sina witnessed a 10 fold user and daily traffic growth in fiscal 2006 with the number of Chinese broadband users surpassing 100 million in January 2007. The broadband user traffic increase is expected to make video content an important part of Chinese websites in the future. Sina has already signed content agreements with two industry giants, namely Shanghai Oriental sebai TV and Phoenix TV. Sina launched a Podcasting platform, similar to Youtube.com in December 2006. The platform, which facilitates video upload and sharing, is integrated with Sina’s blog service, broadband video channel and other content channels. The channel has received approximately 15,000 video uploads per month, since it was launched. Sina believes this new platform will be an important growth driver in fiscal 2007.
Recently, Sina aligned itself with five music labels to launch a new digital music platform. The partnership boasts of giants like Sony, Warner Music Group, Universal, Rock Records and EMI. The companies will share the revenues from music downloads, online advertisements and wireless services.
Sina has also invested substantially in its finance channel. The Bull Run in the Chinese market coupled with the increasing importance of the financial service sector as a platform for online advertising will augur well for Sina. The company’s number one ranked auto channel has a 50% lead over the next competitor in terms of reach. The emergence of China as the second largest auto market in the world could result in online auto advertising growth. Sina is in a good position to make use of this trend.
Sina expects first quarter 2007 revenues to range between $48 and $50 million. The advertising business is expected to contribute between $31 and $32 million of these revenues. Sina expects its advertising business to grow 30-35% in 2007. Sina is promoting their new search platform, iAsk and plans to monetize it in 2007. Consequently, Sina is expected to outperform over one year.