Sina Corp., which operates China's Twitter-like microblogging site Weibo, posted a surprise second-quarter profit of $33.2 million, more than triple the amount a year ago.
The results, which included an 11% jump in revenue, blew investors away since analysts had predicted that the company would post a slim loss for the quarter. Shares of Sina (SINA), surged 14% to their highest level since May.
Sina's CEO Charles Chao noted that Weibo, which is likened to Twitter, is continuing to gain momentum, which helps it grow market share in online advertising. The company's online advertising revenues rose 12% during the second quarter, which Chao said he was pleased with in the face of China's "challenging macroeconomic environment."
While most users of StockTwits are microblogging about their pleasant surprise over Sina's results (but not on Weibo), a few are more wary.
While growth among mobile users is a good thing, Sina is struggling with its mobile advertising strategy -- just like fellow social media site Facebook (FB). Revenue from mobile advertising declined more than 9% during the quarter compared to a year ago.
That's a valid point. China is growing at its slowest pace since the recession. It grew 7.6% in the second quarter, marking a deceleration from an 8.1% growth rate in the prior quarter and the slowest growth since early 2009. While that may not affect the number of users on Weibo.com, it could impact advertising revenue.
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