Sina operating profit drops 98% social media advertising prospects remain unclear

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The traditional four portals combined with the new Phoenix New media have been unveiled in the second quarter, and the growth of advertising revenue continues to be disappointing. To open up new areas, the layout of the new market has become a priority for each family.

Tencent, Phoenix and NetEase network advertising revenue to maintain a relatively strong growth, Sina and Sohu, the two major portal network advertising revenue is not more than 20%.

Is the overall scale of the online advertising market down? The second-quarter monitoring data analysis, published by the consultant, tells us that the market is growing at a high speed. The share of the decline is only the brand display ads, and Taobao for the representative of the shopping search relying on the explosion of the electrical business and rapid growth. Depending on the popularity of the show and variety shows, video patch advertising performance is also eye-catching, a significant increase in income.

As internet companies, especially in the US-listed concept stocks, in the second quarter there is a big European Cup subject matter, the peace of mind that no more than 20% of the increase is not acceptable. As a still in the rapid development of the industry, speed is a big demand for portal advertising.

The higher growth of NetEase and Phoenix is based on its relatively small base. Tencent's high growth comes from a diversified distribution of advertising revenue, which says one of the reasons for the big increase in advertising revenue is the doubling of the online video platform's revenue.

Sohu's network advertising volume although hit 100 million dollar line, the year-on-year increase of more than 20%. But Sohu's advertising revenue includes brand advertising and search and other business revenue, of which search and other business revenue of 29 million U.S. dollars, compared with the same period 2011 growth of 111%, and brand advertising revenue year-on-year growth of only 2%, growth near stagnation.

Sina's online advertising continued its first-quarter slump, up just 12% per cent. Unlike Tencent, Sohu layout video, search and other fields, Sina in the traditional Web1.0 portal outside the new layout is Weibo. But after more than two years on line, the more accurate marketing model has been unable to be born, despite the running of micro-blogging. Sina's commercialization after the first half of the year continues to be the same as membership fees and pay for privileges. The model has so far been questioned, and the earnings from the second quarter have not seen a significant boost to Sina's income.

More seriously, in order to maintain the high popularity of the platform, in the last year, soaring spending, the absolute cost of the high, Sina still has to increase spending. Earnings showed that Sina's operating expenses for the current quarter of 69.8 million U.S. dollars, an increase of 10.1 million U.S. dollars. This led to Sina's first-quarter operating losses, the second quarter operating profit of only 200,000 U.S. dollars, cash flow can only rely on the investment income of easy to live in China.

Twitter has already encountered such a happy annoyance, keeping up with the number of active users and the number of messages that grow at a geometric level is hard to find an effective profit model. Even Facebook, the boss of social networking, has been challenged by business prospects after a successful IPO.

The change of social media advertising value is still an unresolved problem.