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SINA Management Discusses Q2 2012 Results - Earnings Call Transcript

Additionally, I'd like to remind you that our discussion today includes non-GAAP measures, which excludes stock-based compensation and certain other items. We use non-GAAP financial measures to gain a better understanding of the SINA comparative operating performance and future prospects. Our non-GAAP measures exclude certain expenses, gains and losses and other items that are not expected to result in future cash payments or that are nonrecurring in nature or may not be indicative of our core operating results and business outlook.

Please refer to our press release for more information about our non-GAAP measures. Following management's prepared remarks, we'll open the lines for a brief Q&A session.

With this, I would like to turn the call over to our President and CEO, Charles Chao.

Guowei Chao

Thank you, Lidan. And good morning, everyone. Welcome to SINA's earnings conference call for the second quarter of 2012.

The official results for SINA on an overall basis for the second quarter were mixed. On one hand, we saw quite strong traffic growth across all terminals and all major product lines, including Weibo, PC Internet portal and the mobile Internet portal in the month of June. On the other hand, the advertising market in China continued to be challenging due to the soft macroeconomic conditions in China. The advertising revenues grew by 12% year-over-year and by 31% quarter-over-quarter in the second quarter.

In the month of April, we launched Weibo display advertising systems for brand advertising. The new system incorporates social and interest graphs recommendation engine, which allows advertising to be more targeted and relevant. The initial response from our customers and advertising agencies has been encouraging. The advertising revenues from Weibo accounted for approximately 10% of our total advertising revenues in the second quarter.

We expect the advertising revenue contribution from Weibo will accelerate in the second half of the year, which will help our overall advertising growth rate as compared to the market.

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