This is our latest approach to Sina Corp. this time by analysts Lin Xu. Bet you'll find this insight useful. For detailed analysis with charts, financial tables etc you need to have a Chinavestor membership.

1. Strong Advertising Business Growth

In Q1 2008, SINA delivered a growth of 51% yoy in its advertising revenue to 47.8 million dollars. The Olympic Games is the main driver of the increases in the adverting revenue, especially in Q3 2008. In the post-Olympic Games period, it is likely that the growth rate will drop to a lower level. Sohu, the biggest Internet firm on the mainland expects core advertising revenue to grow up to 45 percent this year, but it warned the growth may taper off to about 20 to 30 percent in 2009. As the advertising revenue of SINA represented over 60% of total revenue in Q1 2008 and 69% for year 2007, the large drop will adversely affect the performance of SINA in 2009. However, there are some factors that can partly neutralize this adverse effect. In Q1 2008, the vertical areas with the top four advertising opportunities – automobile, finance, real estate comprising 56% of total advertising revenue and contributing 80% of adverting revenue growth yoy in dollar amount. This indicates that SINA has a strong reliance on non-Olympic Games advertising opportunities. In Q1 2008, the revenue per advertiser grew 36% yoy, compared with the 11% growth in the number of advertisers, indicating improvement in business operating.

In April 2008, SINA and E-house, a leading real estate services company in China, formed a new venture to build the largest online real estate portal in China. E-House's proprietary CRIC database system contains detailed information and transaction data on China's real estate sector including land and residential, office and commercial buildings in 30 major cities in China, with a customer base of over 5,000 real estate developers in China. This will facilitates SINA to leverage CRIC database system to provide more comprehensive real estate data information, so that it will expand its national coverage of one of its four major vertical areas – Real Estate, 90% of which is currently focused on Beijing market.

2. Improved Mobile Business

MVAS business has been losing its relative importance as a revenue source since 2005. For 2007 and 2006, MVAS revenues accounted for 29% and 41% of total net revenues, respectively. Short messaging service (“SMS”) and interactive voice response system (“IVR”) revenues accounted for approximately 51% and 22%, respectively, of MVAS revenues for fiscal 2007. In Q1 2008, mobile business increased 16% qoq, with a reduced reliance on SMS products as revenue sources were diversified to MMS, IVR and Free WAP portal. Mobile internet business will be further invested to increase profits.

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