Web portal Sina Corp yesterday said it remains optimistic on advertising growth next year and said it may consider spin-offs of some of its specialized portals.
The web portal said its third quarter net revenue fell 9 percent to $96.4 million year-on-year. Its net profit fell to $16.7 million from $18.85 million a year ago.
Sina's advertising revenue fell 16 percent in the third quarter, but rose 10 percent from the previous quarter to $63.8 million. The company said it expects advertising revenue of between $60 million and $62 million in the fourth quarter.
"We are seeing strong signs of recovery in the advertising market in China during the second half," said Charles Chao, chief executive of Sina, in a statement.
He said he expected the momentum to continue as the Chinese economy gathers steam.
China's online advertising market had been severely hit after the Beijing Olympic Games last year as companies cut their advertising and marketing budgets due to the global economic slowdown.
But the market saw signs of recovery recently after the government's 4 trillion yuan ($586 million) economic stimulus package started to boost consumer spending.
Chao expected advertising sentiment to improve further next year due to the World Expo in Shanghai and other major sporting events in the country. "If the Chinese economy continues its current pace of recovery, we expect the online advertising market in the country to post strong growth next year," he said in an earnings conference call yesterday.
Sina has for long been trying to copy its success in other sectors such as online games to reduce its reliance on advertising. But most of its previous efforts failed as it lacked a clear expansion strategy while its ownership remained highly scattered.
Last year, Sina announced plans to merge with advertising conglomerate Focus Media Holding to form China's biggest private media firm. But the effort was later scrapped after months of government stonewalling over the $1.4 billion deal.
In September, the company announced that an investment group led by its management team including CEO Charles Chao would buy about 10 percent of the company for $180 million, which experts said would significantly increase the management team's confidence in the future of the portal.
The company's joint venture with E-House Holdings, targeting China's real estate business, was listed on the NASDAQ last month.
According to domestic research firm Analysys International, the turnover of China's online advertising market reached 4.16 billion yuan in the third quarter of this year, an increase of 24 percent over the same period last year.