Shares Tumble on Sina's Ad Drop

"The uncertainty in the Chinese economy at the beginning of the year had a severe impact on our online advertising business in the first quarter of 2009. Although market visibility is still relatively low, we have seen improved confidence and sentiment among our advertisers," CEO Charles Chao said.

"While fighting the tough economic cycle, we remain focused on our long-term strategy in building the leading online media platform in China by investing in products, content and brand. We believe our investments in the downturn will make SINA a more competitive company in the long run when the Chinese economy further recovers."

Investors also internalized the company's guidance, sending shares down 5.4% in after-hours trading. The company said it expects revenue for the second quarter to land between $85 million and $89 million, which is short of analysts' forecasts.

On a day of heavy trading, shares changed hands in negative territory, finishing down 1.3%.