Sina, China’s biggest Internet portal, forecast a record quarterly sales drop, citing a “challenging” online advertising market.
The company projected third-quarter sales will drop as much as 14% to $91 million. Chief Executive Officer Charles Chao said in a conference call the sales outlook is below what Shanghai-based Sina had expected.
Sina predicted online advertising sales may fall as much as 21% in the current period, larger than local rival Sohu.com’s projected drop. China’s economic slowdown in the first half weakened spending by Sina’s customers in the automobile, property and technology industries.
In July, Sohu reported second-quarter advertising sales rose 5%. The Beijing-based company forecast advertising sales in the current quarter may be between $49.5 million and $51.5 million, compared with $51.1 million a year earlier.
Chief Financial Officer Herman Yu said Sina plans to maintain increases in network spending to host more video content and attract online advertisers as demand remains “cautious.”
Sina is “unlikely” to complete its planned acquisition of the main outdoor advertising assets of Focus Media by a deadline at the end of this month as the transaction is pending antitrust approval by China’s Ministry of Commerce.
Bloomberg said that Sina and Focus Media are in talks to review options, including extending the deadline for the deal’s completion, or altering the terms of the transaction.