As Chinese internet company falters, concerns about online growth emerge
Mar 18th 2009 7:00AM
Updated Dec 3rd 2009 10:33AM
Sina (SINA) owns one of the most visited portals in China. It reported good earnings for the last quarter, up 40 percent. But its forecast was troubling. According to The Wall Street Journal, "the owner of China's largest Web portal issued a weak first-quarter revenue outlook as the economy hit advertisers."
That news is bad for two reasons. The first is that it could push the company's share price down. At less than $21 it is already near a 52-week low, down from a period high of $58.60.But even worse, given Sina's size, its forecast says that online advertising in China is slowing. Since Sina serves thousands of advertisers across almost every large sector in the economy, it is a reasonable proxy for how business activity in the world's most populous country is doing. The answer is "not very well." China's economic growth may be decelerating more than many economists believe.
Douglas A. McIntyre is an editor at 24/7 Wall St.