Source: SINA Weibo.

China's Internet industry has the same huge potential that the U.S. enjoyed during the tech boom of the 1990s, and SINA (NASDAQ:SINA) has been staking its claim to the Chinese Internet gold rush for years. Yet, as Baidu (NASDAQ:BIDU) and other players have made their own moves to capture Internet supremacy in China, SINA has found itself struggling for direction at times.

Coming into Thursday afternoon's third-quarter financial report, SINA had some investors wondering whether it could recapture some of the lost glory of its traditional portal business, even as it rides the wave of relative success of its remaining stake in micro-blogging site Weibo (NASDAQ:WB). Unfortunately, the numbers indicate an ongoing disparity between Weibo's good fortune and the struggles in the rest of SINA's business. Let's take a closer look at how SINA did for the quarter, and what's next for the company going forward.

How earnings headlines can be misleading
When you look at the headline revenue numbers for SINA's quarter, they paint a picture of reasonable performance for the company. Adjusted net revenue climbed 9% from the third quarter of 2013, with the lion's share of revenue and sales growth coming from its online advertising revenue stream. Non-advertising revenue also climbed modestly, however, with value-added services posting net gains.

The problem with SINA becomes more evident when you break out revenue between Weibo and SINA's portal-related businesses. Overall, Weibo revenues climbed 58% year over year, and monthly active user counts in September rose 36%, to 167 million.

On the advertising front, Weibo ad sales climbed $21.7 million, but portal ad sales fell by $6.5 million. Similarly, in assessing value-added services, Weibo picked up an increase of $9.1 million, but mobile value-added services declined $7.4 million. That isn't entirely bad news for the company as a whole, as gross margins on Weibo-related services are higher than on the mobile side.

Nevertheless, SINA took a big hit to its bottom line in the third quarter, with adjusted net income falling almost 55% after taking out the impact of some one-time items. Most investors expected a decline in earnings of roughly this magnitude, so it didn't come as a huge surprise. Nevertheless, it does still reflect the challenges SINA faces to remain profitable.

The disparity between Weibo and the portal segment was clear from the comments of company executives. As CEO Charles Chao noted, "Weibo continued to show strong momentum in both revenue and user growth." Yet, the comments about the portal were far less optimistic, with Chao claiming that, "We are making strides to revamp our online business with particular emphasis in business verticalization and mobile."

Source: SINA.

What's next for SINA?
Investors also had to deal with the news that SINA doesn't believe that revenue growth will continue at the same pace going forward. The company said it expects between $204 million and $210 million in revenue for the fourth quarter, which is less than the roughly $215 million investors wanted to see.

SINA's sluggishness poses a major problem for investors, because its rivals aren't constrained by the same limits. Baidu, for instance, is on pace to see sales climb more than 50% this year, and investors expect 40%-plus growth in 2015, as well. Taken by itself, Weibo has the potential to grow at an equally impressive rate, but SINA's portal business is holding the company back substantially, making it look much less like a typical Chinese Internet growth stock.

SINA investors were clearly disappointed by the news, as the stock posted a 3% decline in after-hours trading about an hour after the release. Despite the company's enthusiasm about Weibo, SINA doesn't have any clear strategy in place to help its core portal business emerge from its doldrums. Until it does, SINA will have a tough time convincing investors that it has a viable path following what most consider to be an inevitable spinoff of its remaining interest in Weibo.