Sina profits lag on high Weibo costs

Chinese web portal Sina (SINA.NASDAQ) reported second-quarter profits below analyst estimates as costs associated with developing microblogging product Weibo cut into higher advertising sales, Bloomberg reported. Net income fell to US$10 million, down from US$25.2 million the previous year and substantially below the average analyst estimate of US$14.5 million. Sales rose 20% to US$119 million while operating expenses increased 87% to US$59.7 million. Sina has been focusing on adding features to its popular microblogging service Weibo, including a virtual currency and games, to hold off a competing product from Tencent Holdings (0700.HK). Sina CEO Charles Chao said in May that the company may spend US$100 million on Weibo in 2011. Shares of Sina fell 5.1% to US$92.90 per share in New York prior to the announcement but recovered in after-hours trading.