Sina Corporation (SINA)

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SINA Corporation (SINA)

Q1 2013 Earnings Conference Call

May 16, 2013 9:00 p.m. ET


Cathy Peng – IR Manager

Charles Chao – Chairman and CEO

Herman Yu – CFO


Eddie Leung – Bank of America Merrill Lynch

Tian Hou – T.H. Capital

Ming Zhao – 86Research

Jiong Shao – Macquarie Research

Alicia Yap – Barclays

Cynthia Meng – Jefferies

Yu-Heng Fan – China Renaissance

Chi Tsang – HSBC

Andy Yeung – Oppenheimer



Good day, ladies and gentlemen, and welcome to Sina Corporation's First Quarter 2013 Earnings Conference Call.

At this time all participants are in a listen-only mode. However, we will be facilitating a question-and-answer session towards the end of the conference.

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 first quarter 2013. Joining me today are our Chairman 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 facts, including statements about our beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement.

SINA assumes no obligation to update the forward-looking statements in this conference call and elsewhere. Further information regarding these and other risks is included in SINA's Annual Report on Form 20-F for the year ended December 31, 2012 and its other filings with the Securities and Exchange Commission.

Additionally, I'd like to remind you that our discussion today includes non-GAAP measures which exclude stock-based compensation and certain other items. We use non-GAAP financial measures to gain a better understanding of the SINA comparative operating performance and future prospects. Our non-GAAP measures exclude certain expenses, gains and losses and other items that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of our core operating results and business outlook. Please refer to our press release for more information about our non-GAAP measures.

During the call we may also discuss costs related to, which is our best estimate of the direct costs incurred by Weibo. These numbers have not been audited and exclude certain items including those used to derive non-GAAP measures, overhead allocation and inter-company transaction.

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

Charles Chao

Thank you, Cathy, and good morning everyone. Welcome to SINA earnings conference call for the first quarter of 2013.

We [inaudible] encouraging results. Our total non-GAAP revenues grew by 19% and our total non-GAAP advertising revenues grew by 20% from the same period of last year. The user base for Weibo continued its healthy growth with total [registered] accounts reaching 536 million by the end of March, representing an increase of 6.6% from three months ago. The daily active user or DAU for Weibo increased by 7.8% to reach 49.8 million from the month of December last year to the month of March this year.

Also during the first quarter we experienced a rebound in average time spent for our daily active user on Weibo, which is encouraging in light of intensified competition. As we discussed on the previous conference call, the competition in time spent on different mobile applications will be inevitable.

For the month of March, 76.5% of our daily active user used the mobile terminals to access Weibo, up from 75.3% in the month of December last year. As mobile becomes increasingly important, all the large internet companies have shifted their strategic direction to mobile. At the beginning of this year we adopted Mobile First strategy, our future product development will no longer be from PC to mobile. Instead we will consider mobile experience first for new product and initiatives.

Under the Mobile First strategy we're devoting more efforts in improving user experience on mobile applications for our existing products. For Weibo mobile applications we recently renovated the messaging system to a more efficient one-to-many communication on Weibo. We also launched Page System on mobile Weibo to allow users to follow an interest or an object or a location so that we can expand the content and user activities on Weibo. For our news portal, we recently relaunched SINA News mobile app. All of these new initiatives have been well-received by our users.

During the first quarter we've continued to experiment various means for mobile -- for Weibo monetization. In the middle of March we opened our promoted [seat] advertising system to certain selective SME advertising agencies and have begun tests in SME market in larger scale. Although the dollar amount for such advertising has been insignificant, we have seen continued improvement in effective CPM loads and daily spending since the open beta testing.

For the first quarter, total advertising revenues grew by 20% year over year but declined by 15% on a sequential basis due to the traditional seasonality. The sequential decline was in almost all-industry categories with the exception of FMCG. The advertising revenues from Weibo also declined on a sequential basis due to the fact that the vast majority of advertising revenues on Weibo was also from branding advertisers whose spending was affected the most by the low season first quarter.

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