Sina's Growth Strategies in China

In August 2005, Sina Corporation (Sina), the Internet and mobile content provider in China, announced that the company's profits for the second quarter ending June 2005 stood at $10 million, down from $18 million that the company had reported in the corresponding quarter in 2004. The decline was attributed to the drop in revenues from mobile content services, which constituted 62% of its total 2004 revenues of $199.98 million (See Exhibit I for Sina's consolidated statement of income for the fiscal years 2000 to 2004). Sina's mobile content services, called Mobile Value Added Services (MVAS), generated revenues of $25.8 million in the quarter ending June 2005, which was 23% lower as compared to the revenues from MVAS in the corresponding quarter in 2004.

Established in 1998, Sina was a result of the merger between The Stone Rich Sight Information Technology Company (SRS) and Sinanet.com who shared a common goal of catering to the huge market for online Chinese language content. The number of Chinese online users was growing rapidly in the late 1990s and so was the demand for online content relating to news, sports, finance and services such as e-mail, search, chat, and dating. Through a network of four websites, Sina offered its services to Chinese speaking audiences spanning four countries. Sina's coverage of news and sport events along with its comprehensive portfolio of services enabled it to attract online users and become the top Chinese internet portal in 2001.