Sina Corporation (SINA)

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Q4 2007 Earnings Call

February 20, 2008 8:00 pm ET


Cathy Peng - Investor Relations Manager

Charles Chao - President and Chief Executive Officer

Herman Yu - Acting Chief Financial Officer


Gene Munster - Piper Jaffray

Jenny Wu - Morgan Stanley

Wallace Cheung - Credit Suisse

Leah Hao - Goldman Sachs

Eddie Leung - Merrill Lynch

Jason Brueschke - Citi Investment Research

George Chu - UBS

Wendy Huang - Bear Stearns

C. Ming Zhao – SIG



Good day, ladies and gentlemen. Welcome to SINA Corporation's fourth quarter and fiscal 2007 earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today's conference, Ms. Cathy Peng, Investor Relations Manager. Please go ahead, ma'am.

Cathy Peng

Thank you, good morning. Welcome to SINA's earnings release for the fourth quarter and full year 2007. Joining me today are our President and CEO, Charles Chao, and our Chief Financial Officer, Herman Yu. This conference call is also being broadcast on the Internet and is available through the investor relations section of the SINA website.

Before the management presentation, I would like to read you the Safe Harbor statement in connection with today's conference call. During the course of this conference call, we may make forward-looking statements, statements that are not historical fact, including statements about our beliefs and expectations. Forward-looking statements involve general risk and uncertainty. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement.

Further information regarding these and other risks are included in SINA's annual report on Form 10-K for the year ended December 31, 2006 and its other filings with the Securities and Exchange Commission.

Additionally, I would like to remind you that our discussion today includes non-GAAP measures, which include stock-based compensation as well as other items. We use non-GAAP measures to exclude certain items that are not expected to result in future cash payments that are non-recurring, or may not be indicative of our core operating results. For further explanation of our non-GAAP measures and a detailed reconciliation between our GAAP and non-GAAP results, please refer to our earnings release.

Following management's prepared remarks, we will open the line for a brief Q&A session. With this, I would like to turn the call over to our President and CEO, Charles Chao.

Charles Chao

Thank you, Cathy and good morning, everyone. Welcome to SINA's fourth quarter and fiscal year 2007 financial results conference call. I'm very pleased to report another strong quarter with record total revenues and earnings. We also achieved record revenues for the full year ended December 31, 2007.

The fourth quarter marked the seventh consecutive quarter that we were able to grow our online advertising revenues by 40% or more on a year-over-year basis. During the fourth quarter, we continued to see strong demand in the general advertising market in China. SINA’s traditional stronghold in automobile, real estate and IT continued to perform well in the fourth quarter and combined they accounted for 55% of the total advertising revenues for the quarter.

Once again, financial services was the best sector for advertising revenue growth in the fourth quarter, and it surpassed the IT category and became the third-largest advertising revenue contributor for SINA for the first time.

We believe that we will continue to take more market share in these four sectors in the China online advertising market. This is a further testament that SINA has increasingly become the premier website for high-end products and services with its desirable user demographics and strong brand recognition.

For fiscal year 2007, our advertising revenue grew by 41% and reached $169 million in total despite a tough comparison with 2006 in which we had the benefit from FIFA World Cup. Our strong growth in online advertising revenue in 2007 further demonstrates that our relentless pursuit for content and product excellence has paid off.

During 2007 our web traffic continued to grow strongly with page views increasing by 44% on a yearly basis. Our traffic for our user-generated content, primarily from blogs and podcasting has more than doubled during the year.

In addition, SINA is also increasingly becoming the destination website for mainstream online media content in China. More and more Chinese Internet users turn to SINA for major event coverage. For example, the full coverage of the 17th National Congress of the Communist Party of China at in October 2007 received tens of millions of page views. The home page of the coverage alone recorded more than 4 million page views on October 22, the day when the members of the new Standing Committee of the Political Bureau of the Censure Committee made their statement. According to a third-party report monitoring the online media coverage of the event, SINA accounted for 15% of the traffic for the event coverage amongst four major portals in China.

We believe that our unparalleled media influence, strong content offerings, and desirable user demographics will continue to help SINA to take advantage of the robust online advertising market in China.

Indeed, the year 2008 will be another great year and even a better year for online advertising for the China market and for SINA. Despite a slowdown in world economy, we have not seen a slowdown in online advertising spending in any major industries we are serving in the China market. The China economy is expected to have another year of strong growth and with additional opportunities created by the upcoming Beijing Olympic games we are expecting another year of strong advertising growth.

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