Boston, MA 06/13/2014 (wallstreetpr) – In an Interview given to CNBC, the CEO of Sina Corporation (NASDAQ:SINA), Charles Chao states that their micro blogging site named “Weibo” is gaining popularity vigorously but investment in main area of business is getting ignored. Charles Chao, also the chairman of Weibo considers that their too much concentration in making money through Weibo put the main business on the back seat.
Weibo’s Financial Contribution
Weibo, which is a hybrid of Twitter and Facebook, was run separately from March 2014 onwards, but this generated quite a less revenue of $286 million than the expected figures. This happened post the reduction of its IPO size due to Technology shares sell off in April 2014. Weibo was also separated so that Sina can be positioned differently without Weibo.
Sina’s other portals have good traffic and decent profits, but sufficient money has not been put in the mobile segment. About 40% of China use the mobile internet as per Internet Network Information Centre of China. Market Experts consider it to increase further. The online world is shifting rapidly to mobile and if this segment is not captured properly, Sina Corporation (NASDAQ:SINA) is out of the competition.
As per first quarter reports, SINA earned a revenue of $171.5 million by the middle of May 2014. There was an increase of about 38%, approximately with 161% addition from Weibo’s earnings. However, the company expects a tough phase as the growth of the top line has slowed down to 16% in 2nd quarter from 19% in the first quarter.
Dealing With Regulators
The Regulators of China have given another setback to Sina by imposing fine on their internet portal with $815000 and revoking 2 of its licenses for internet & video publishing. This has led Sina Corporation (NASDAQ:SINA) to tighten up their internal controls. However, earnings can be impacted negatively, acknowledged by Charles Chao. This will also have indirect effects on services like online reading as people will worry to go for video advertisements on their website or not.
