SINA Wobbles but It Won't Weibo Down

Chinese dot-coms have stuck to the same script this earnings season:

Earnings beat analyst estimates. Revenue comes up acceptably light. The top-line outlook in the near term falls short of Wall Street expectations.

Portal pioneer Sohu.com (Nasdaq: SOHU  ) and search star Baidu (Nasdaq: BIDU  ) posted quarterly results last month along those lines.

Last night it was SINA's (Nasdaq: SINA  ) turn. Adjusted revenue grew 6% higher to $101.5 million, fueled by a 9% uptick in ad revenue. A quarterly deficit of $0.21 a share reversed a modest year-ago profit, as increased spending on infrastructure, content, and personnel -- largely on the Weibo side -- crushed margins.

Analysts were expecting an adjusted loss of $0.23 a share on $102.6 million in revenue.

As has been the norm this season, guidance was disappointing. SINA is eyeing non-GAAP revenue of $126 million-$129 million, short of the $130.4 million that the pros were targeting. SINA is also warning that it may post another loss this quarter.

Yikes!

Sohu fell after its unsettling guidance. Baidu also took a hit on its numbers. Why did SINA trade as much as 16% higher this morning? Well, it's all about Weibo.

SINA's hot micro-blogging site -- often described as the Twitter of China, though it's more along the lines of Tumblr in theory -- is finally going to get monetized.

SINA is initiating test trials of brand advertising on Weibo, powered by a social interest graph recommendation engine. SINA expects the marketing platform to have a "meaningful impact" on results in the second half of the year.

In other words, the margin hits that SINA has endured in recent quarters as it keeps up with Weibo's heady growth are about to pay off.

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