China's Sina reports surge in revenues

Leading Chinese web portal Sina.com reported a surge in revenues to $51.3m in the first quarter of the year, comfortably beating forecasts. 

The increase was driven mainly by 46 per cent year-on-year growth in advertising sales.

Sina.com reported strong growth for its web 2.0 initiatives, although revenues are still small.

The firm's YouTube-style video sharing service doubled visitor figures to 1.2 million in just three months, according to financial services firm WR Hambrecht and Co. 

The number of videos viewed on the site each day jumped 60 per cent, to reach 7.5 million. Sina.com claims that it is now one of China's biggest video sharing sites.

"We see great potential for this new product and believe it will be an important traffic driver in 2007 and an important revenue driver beyond," said Charles Chao, Sina's president and chief executive, during a conference call with analysts.

"We intend to invest heavily in this video platform with adequate equipment and bandwidth, which could be costly and which could negatively impact our gross margin in the near term, given that advertising will lag behind in terms of picking up the volume."

Sina.com also lured more users to its blog platform, taking the total number of blogs on the site past 100 million, according to WR Hambrecht analyst James Lee.

Blogs hosted at Sina.com are now attracting 4.6 million visitors a day, an increase of 24 per cent over the previous quarter.

"The traffic has been pretty big in these blog channels, so we are able to sell more advertising in these blog channel front pages," said Chao.

Despite new government regulations that have hit many competitors, Sina.com's mobile services business brought in $18.2m.

"We note that wireless contributed only five per cent of Sina's enterprise value, so we believe investors should not focus on this segment before visibility improves," warned Lee in an investment briefing.