SINA Corporation (Nasdaq: SINA), one of the four major portal websites in China, announced here Thursday that it gained a net profit of 43.9 million U.S. dollars in 2005 with a remarkable drop of around 34 percent over the previous year.

For fiscal year 2005, SINA reported net revenues of 193.6 million U.S. dollars, compared to 200 million U.S. dollars in 2004. Despite the rise of 30 percent of its advertising revenues, SINA's revenues from the non-advertising sector saw a 19 percent decrease.

Mobile value-added service revenues for 2005 totaled 98.1 million U.S. dollars, declining 21 percent year-on-year mostly from short message services and multi-media messaging services.

The gross margin of mobile value-added service dropped by 3 percentage points year on year, which was primarily a result of increased transmission costs paid to mobile operators and increased costs for content acquisition, said SINA in its fiscal report.

High operating cost is another factor contributing to SINA's profit drop last year. Operating expenses for SINA in 2005 were 88.9 million U.S. dollars, a 29-percent increase from 2004.

The year-over-year increase was primarily due to increased marketing spending to promote mobile value-added service as well as higher spending in product development related to search, email and instant messenger, explained the company.

The company estimates its total revenues for the first quarter of 2006 to be between 44.5 million U.S. dollars and 46.5 million U.S. dollars.

Source: Xinhua