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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: AllansAlias who wrote (12343)	8/21/2000 10:04:05 AM
From: Perspective	Respond to of 436258

Now HERE'S a reason to pay $1B (>100X sales) for an emerging market Net portal. Did I mention they are headquartered (edit - registered) in the Cayman Islands, with the usual <10% float? biz.yahoo.com China's Sina.com expects to break even late 2002 (UPDATE: Updates with quotes, analysts comments) By Lee Chyen Yee SHANGHAI, Aug 21 (Reuters) - Chinese Web portal Sina.com Inc (NasdaqNM:SINA - news) said on Monday it expects to break even around the second half of 2002, with the bulk of its revenues coming from online advertising. Despite an anaemic online ad market in China, Sina was confident the model would work the way it did for top U.S. portal Yahoo! Inc (NasdaqNM:YHOO - news), Daniel Mao, Sina's chief operating officer, told reporters in Shanghai. ``They went public in 1996 and then they started breaking even at the end of 1998 -- a total of about a 30-month process,'' Mao said. ``We believe we should use Yahoo as an industry benchmark,'' he said. ``So since we went public this year, then we may have a 30-month type of time to achieve that kind of objective.'' Mao said Sina hoped to grab 25 to 30 percent of China's estimated $25 million online advertising market this year. Sina, cited in a recent government survey as the most popular Web site in China, had about 20 percent of the $12 million domestic online ad pie last year. ONLINE ADVERTISING TO RULE ``Definitely, we want to increase to maybe 25 to 30 percent, or even more if possible in China, as well as in other Chinese overseas markets,'' Mao said. More than 80 percent of Sina's revenues come from online advertising, with about two percent from e-commerce and the rest from its software business, a breakdown Mao expects to last for the next three or four quarters. The Cayman Islands-registered company posted a loss of $6.9 million on revenue of $5.8 million for the quarter ended June 30. UBS Warburg estimated Sina had $130 million in cash on hand. Analysts predict the industry is headed for consolidation as cash-hungry web portals battle for a limited pool of advertising revenues. But Mao said a lesson could be learnt from the United States. ``Let's look back at the U.S. in 1996. People were sceptical about online advertising too,'' Mao said. ``What is the end result of online advertising now? It's a multi-million dollar market.'' Mao said online advertising made up less than one percent of total advertising revenues in 1996 in the United States, around the current levels in China. ``The early adoption rate (in China) is usually faster. But it will easily pick up to somewhere around two percent by 2003, 2004, according to research market analysts,'' Mao said. STAYING ALIVE Some analysts say there is some hope for online advertising as a model for web portals, but they would need to diversify their operations to survive in the long term. ``It will work ultimately because you have people looking at these sites,'' said Dennis Lam, investment analyst at Kim Eng Securities in Hong Kong. ``Traditionally it has worked in the print media.'' Pete Hitchen, regional Internet analyst at Salomon Smith Barney in Singapore, said that for short-term revenues, online advertising was one of the few games in town. He said diversifying into e-commerce could be one alternative as more web merchants go online. ``You find that there are a lot of traditional retailers who are starting to look at the Internet as their selling platform,'' he said. Sina.com's share price ended up $3/4 at $21 1/2 on Friday against its April IPO price of $17, which it raised $68 million. Its shares have fared better than those of rivals Netease.com (NasdaqNM:NTES - news) and Sohu.com (NasdaqNM:SOHU - news), which listed after Sina and have seen their share prices drop 50 percent.