Chinese Web portal SINA.com on Monday announced it would
dip its toes into the premium services market with the launch of SINA Online
to hawk fee-based products for dial-up, broadband and wireless users.
SINA, which operates four Chinese-language portals for an audience in China,
Hong Kong Taiwan and North America, said the formation of SINA Online is
part of previously announced plans to set up three major business lines.
It said SINA Online would run the telecom access and subscription
businesses, focusing on providing bundled access and content services to end
users with subscription fees as the main source of revenue.
“Coming on the heel of SINA.net, the formation of SINA Online completes the
formation of three major business lines for SINA — SINA.com, providing
information and with advertising as its main source of revenue; SINA.net as
the technology services business, providing Web based technology software
and services to enterprises and governments with service and licensing fees
as the main source of revenue,” the company said.
SINA chief executive Daniel Mao said the SINA Online subsidiary would help
reduce operating expenses. “While these three business lines will
independently grow their own revenue base, they are able to share common
costs and platforms… As such, they are able to scale more rapidly with a
lower cost of operations and collectively shorten the path to profitability
for all.”
Not unlike Web portals in the U.S, SINA has struggled to cope with the
downturn in the advertising market and the launch of premium services is
widely seen as an attempt to stem the flow of red ink.
One of the highes
t ranked Web properties in China, SINA has seen its stock price — and
market value – nosedive in recent months.
SINA’s earnings have also taken a beating. For the six months ended December
31, 2001, the company has seen its revenues dip almost 15 percent to $12.8
million with net losses in the range of $10 million. The reduced revenues
reflect a decrease in the number of advertisers and the amount of
advertising contracts, the company said.
“Experience has shown us that access and subscription are the best means of
deepening the relationship with our users. The formation of SINA Online
provides a strong focus on our commitment and investments in these areas,
said SINA president Wang Yan.
He said the launch of SINA Online, which an independent management team,
would allow the company to expand partnership deals with access and content
providers to supply bundles value added services to subscribers.
SINA, which recent
ly acquired a large chunk of China’s Sun TV, offers news, e-commerce,
financial news, lifestyle features, and Web services such as e-mail and
online chats to approximately 29 million users worldwide.
