Sina Corp, the largest Internet portal in China, is expecting to double its advertising customers on its micro-blogging service, Sina Weibo, in the second half, although the service is not going to generate "significant" revenues this year.
The company said Sina Weibo attracted about 80 advertisers in the second quarter, contributing 10 percent of its total revenues.
Encouraged by the levels of advertising support, Sina says it is now planning a new version of the service.
Although the growth of China's advertising market is likely to slow in the third quarter, Charles Chao, the chief executive, said the company expects a better-than-average performance in advertising revenues thanks to Olympic-related spending by clients, and ongoing steady revenue at Sina Weibo.
The Nasdaq-listed company started selling advertising on Weibo in April, in an effort to offset weakened spending elsewhere due to the economic slowdown.
"Weibo is poised to attract more new advertisers for us in the next quarter. About 80 percent of existing clients are in automobile and fast moving consumer goods markets," said Chao.
Sina's advertising revenue was $103.1 million, an increase of 12 percent year-on-year, the company said on Thursday.
Its net revenues increased by 11 percent year-on-year to $131.6 million.
"It was a good beginning (For Weibo) at a time when enterprises are very cautious about their advertising budgets," said Shi Jialong, a Hong Kong-based analyst with CLSA Asia-Pacific Markets.
"But Sina has to strike a balance between the way it generates revenues from Weibo and the overall user experience," he said, adding that a rush to generate revenues may harm on Weibo's performance.
Chao said this will continue to be a year of investment for Sina Weibo, and that a new version of the service is expected to be launched in the near future.
The number of unique Chinese micro-bloggers increased by 9.5 percent from half a year ago to 274 million at the end of June, compared with an explosive increase of more than 200 percent at the same time last year, according to data from China Internet Network Information Center.
Sina Weibo had about 368 million accounts and 36.5 million daily active users by June, said the company.
Its long-time rival Tencent Holdings Ltd, China's largest Internet company by sales, reported it had a total of 469 million accounts in the second quarter, with 82 million daily active users.
Sina estimated that its net revenues for the third quarter could hit $148 million, with advertising revenues between $120 million and $122 million, showing a year-on-year increase of about 20 percent.
Analysts in the United States offered a 12-month price forecast for Sina at a median target of $75, according to the US financial website CNNMoney.