Shares Tumble on Sina's Ad Drop

Last week, news bandied about that online advertising revenue in the U.S. fell $5.5 billion in the first quarter, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. But if Sina's(SINA Quote) first-quarter earnings announcement today is any indication, advertisers are not converting those missing ad dollars to Chinese yuan.

Sina, one of China's largest web portals and online media outfits, said profit tumbled in the quarter because of a familiar refrain: its online advertising sales (say it with us) were hurt by the global economic crisis.

After the closing bell, the Shanghai-based concern reported a 30% drop in profit from the same period last year, earning $9.75 million, or EPS of 17 cents against $14.1 million, or 23 cents a share, last year. After adjustments, the company said EPS came to 23 cents, which was just ahead of analysts' projections of 22 cents.

But revenues fell short of market expectations and on the bottom of end of the company's own forecasts, coming in at $73.8 million. Sina said advertising sales alone fell to $43.2 million. That represented a 10% drop from the year-ago period, and a 38% fall from the previous quarter.

The advertising figure was a slight uptick from the year-ago period when Sina posted $71.3 million in sales. But it was still well off last quarter, when the company generated $101.5 million in revenue after coming off of the Beijing Olympics.

Non-advertising revenues jumped 30% from the same period a year ago, helping absorb some of the advertising blows this quarter.