Google China partnership to bear fruit in 2008

One of China's leading internet portals, Sina, has outlined details of its new search and advertising partnership with Google. Under the deal Sina will carry Google's Chinese search service and advertising, and the companies will share the revenue generated. Sina does not expect to see significant revenue from the partnership before the fourth quarter, executives say.

“Under the agreement, Sina will use Google's web search service and will be paid based on the traffic diverted to Google.cn from Sina's website. In addition, Sina will deploy Google’s AdSense for Content product on Sina’s content pages, and will share revenue with Google for advertising dollars generated from the ad placements,” said Charles Chao, Sina's CEO and president.

Sina began rolling out Google services on its pages in June, and the new adverts are still in a testing phase. As a result, revenues have not been significant so far, Sina executives said.

“We need to go through a two to three month testing period for AdSense... they'll be testing different pages to see the effectiveness in entirely different locations, different pages. This is a starting point that's more like a transitional point for AdSense. The traffic ramp up for the web search will take some time,” Chao told analysts during a recent conference call.

The full impact of the new Google ad revenues will probably show up in Sina's account books in September, Chao told analyst Richard Ji of Morgan Stanley. Shared search revenues would take longer to grow, he said, predicting a gradual increase during 2008.