Results were mixed for the Chinese dot-com darling in its latest quarter. SINA's top line -- adjusted to back out deferred license revenue related to its equity investment in China Real Estate Information
Don't panic. Analysts figured that SINA would only ring up an adjusted profit of $0.23 a share on $124.7 million in revenue.
Everyone knows that SINA is throwing money at keeping Weibo's booming popularity growing. Beefing up personnel and ramping up marketing spending has seen adjusted operating expenses nearly double to $60.4 million.
We still don't know if this will all be for nothing. Chinese regulators are getting weary of the open nature of cyberspace's Web 2.0 darlings. Investors in social networking leader Renren
SINA is one of the better-positioned companies here. It has a strong online portal that was generating healthy brand advertising revenue before Weibo's success pushed it over the $100 million mark in quarterly online advertising revenue. Obviously it would be brutal if Weibo was watered down or neutered by government regulators, though it would also mean that SINA could get back to improving its margins.
The near-term prospects are bright. SINA is targeting adjusted revenue to lock in between $128 million and $131 million in the current quarter, posting sequential growth in both its advertising and smaller non-advertising businesses. Margins will likely continue to be squeezed during Weibo's land grab, but SINA investors probably wouldn't want it any other way.
If you want to stay abreast of the latest happenings at one of China's dot-com pioneers, add SINA to My Watchlist.
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Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.