SINA Hopes on Mobile Advertising


SINA is China’s favourite online media company, although it began in the United States serving North America’s Asian community. Its stock rose rapidly in the past three months, but it has fallen back as part of the broader Chinese lockdown. I popped by the Forbes Trefis Team to find why it thinks SINA stock rose by 70% so quickly, and in particular by a spectacular 31% in June.

SINA’s Own Investment Boosted Confidence

SINAThe value kick-in began in earnest when SINA ceo and chairperson Charles Chao took a leap of faith and bought 11 million shares for $456 million as a cash investment. This gesture of faith by a man who should know best was a positive affirmation that warmed investor’s hearts.

It was also the product of necessity, because SINA’s core was losing momentum and needed reserves to continue growing.

Smart SINA Product Mix Carried It

There are two main pillars supporting SINA, namely Portal Advertising, and Weibo. While the former continued in slow decline, the micro blogging service surged ahead. Thus is has Mr & Mrs China to thank for the improvement, and not the businesses that advertise in SINA News, SINA Finance, SINA Sports, and SINA Technology. This is a thought-provoking outward sign of the general Chinese economic slowdown and the major brands it is affecting.

Expenses Drove Chao’s Investment

The first quarter of 2015 saw an uptick in SINA costs of revenues, and sales & marketing. This relates to efforts to uptick gross including the Red Envelope Campaign celebrating China’s New Year. The Forbes Trefis Team expects the margin-related pressure to persist. It believes the best prospects lie in high growth potential in the Chinese internet market, where penetration is still under 50%.

SINA Prospects for Mobile Monetization

China’s favourite online media company has already enjoyed success in this regard, with upwards of 60% of its advertising revenue streaming through the medium. This could also compensate for dwindling income from big-screen advertising. However Forbes still expects SINA to face ‘continued challenges’ in the months that lie ahead as the economy continues to slow.

About Author

Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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