Shanghai, China-- (PR Newswire)—February 7, 2005—SINA Corporation (Nasdaq: SINA), a leading online media company and value-added information service provider for China and for global Chinese communities, today announced its financial results for the fourth quarter and full year ended December 31, 2004:

　　Net revenues for the fourth quarter grew by 49% year-over-year to a record $56.9 million, exceeding the Company’s guidance of $54.5 to $55.5 million.

　　Advertising revenues for the fourth quarter grew by 41% year-over-year to $18.3 million and accounted for 32% of total revenues.

　　Non-advertising revenues for the fourth quarter grew by 52% year-over-year to $38.6 million and accounted for 68% of total revenues.

　　GAAP net income for the fourth quarter was $17.4 million; or $0.30 diluted net income per share, compared to a net income of $9.3 million, or $0.16 diluted net income per share for the same period in 2003.

　　Non-GAAP net income (previously referred to as “pro forma net income”) for the quarter was $18.4 million, or $0.31 non-GAAP diluted net income per share, compared to a non-GAAP net income of $15.9 million, or $0.28 non-GAAP diluted net income per share for the same period in 2003. Non-GAAP net income was below the range of the Company’s guidance between $18.5 million and $19.0 million.

　　“We are proud of our achievement in 2004 and look forward to the challenge we are facing in 2005 as the operating environment for mobile value-added service becomes more difficult,” said Wang Yan, CEO of SINA.

　　Net revenues for the year ended December 31, 2004 grew by 75% from 2003 to a record $200.0 million.

　　Advertising revenues for 2004 grew by 59% from 2003 to $65.4 million.

　　Non-advertising revenues for 2004 grew by 84% from 2003 to $134.6 million.

　　GAAP net income for 2004 was $66.0 million, or $1.15 diluted net income per share, compared to a net income of $31.4 million, or $0.58 diluted net income per share for 2003.

　　Non-GAAP net income (previously referred to as “pro forma net income”) for 2004 was $71.6 million, or $1.23 non-GAAP diluted net income per share, compared to a non-GAAP net income of $41.0 million, or $0.75 non-GAAP diluted net income per share for 2003.

　　Financial Results

　　For the fourth quarter, SINA reported record net revenues of $56.9 million, an increase of 49% from $38.3 million reported in the same period in 2003 and an increase of 8% from $52.5 million reported in the previous quarter. For the year 2004, SINA reported net revenues of $200.0 million, an increase of 75% from $114.3 million reported for the year 2003.

　　Advertising revenues totaled $18.3 million for the fourth quarter, representing a 41% increase over $12.9 million reported in the same period in 2003 and a 1% decrease from $18.5 million reported in the previous quarter. The sequential decline in advertising revenues was mainly due to the higher revenues generated in the previous quarter as a result of Olympic Games events. For the year 2004, advertising revenues totaled $65.4 million, representing an increase of 59% from $41.2 million recorded for the year 2003.

　　Non-advertising revenues totaled $38.6 million for the fourth quarter, a 52% increase over $25.3 million reported in the same period in 2003 and a 14% increase over $34.0 million reported in the previous quarter. Total revenues from mobile value-added services were $35.7 million, representing an increase of 56% from $22.9 million reported in the same period in 2003 and of 14% from $31.3 million reported in the previous quarter.

　　For the fourth quarter, SINA continued to benefit from its diversified product offerings in mobile value-added service. Revenues from 2.5G (MMS and WAP) products and other new services grew approximately 28% from $5.2 million for the third quarter to $6.7 million for the fourth quarter. Revenues from MMS products grew by 55% from $2.9 million in the third quarter to $4.5 million in the fourth quarter. During the third quarter, the Company’s IVR service was temporarily suspended by China Mobile due to the violation of certain operating procedures. The Company’s IVR service was resumed on October 15th. As a result, the Company recorded only $0.2 million in revenues from IVR service for the fourth quarter, compared to $1.7 million recorded for the third quarter. Revenues from SMS products grew by 19% from $24.3M in the third quarter to $28.8M in the fourth quarter. The sequential revenue growth for SMS products was driven by the increase in revenues from usage-based SMS products promoted via direct advertisement on radio and television.

　　For the year 2004, non-advertising revenues amounted to $134.6 million, representing an increase of 84% from $73.1 million for the year 2003. Revenues from mobile value-added service totaled $124.0 million for the year 2004, representing an increase of 93% from $64.4 million for the year 2003. The year-over-year increase in revenues from mobile value-added service was primarily due to the growth in revenues from 2.5G service, IVR service and other new services, as well as from the acquisition of Crillion Corporation in March 2004.

　　Gross margin for the fourth quarter was 68%, which is the same as for the previous quarter and down from 72% reported in the same period in 2003. Gross margin for advertising revenues was approximately 69% for the quarter, compared to 61% for the previous quarter. The increase in adverting gross margin was largely due to a $1.1 million revenue share paid in the third quarter to an exclusive Olympic content partner associated with the China Olympic Committee. Excluding this revenue share payment and some other one-time content purchases relating to the Olympic coverage, advertising gross margin would have been 68% in the third quarter. Gross margin for mobile value-added service revenues for the fourth quarter was 67% as compared to 70% for the previous quarter. The decline in mobile value-added service gross margin was a result of increased transmission costs paid to mobile operators with the increase in usage-based SMS services and increased costs for content acquisitions.

　　Operating expenses for the fourth quarter totaled $21.4 million, an increase of 75% from $12.2 million reported in same period of 2003 and an increase of 14% over $18.8 million reported in the previous quarter. The sequential increase in operating expenses was mainly due to an increase in marketing expenses relating to mobile value-added services, an increase in product development costs relating to instant messaging and search engine development and an increase in general and administrative expenses relating to professional service fees. During the fourth quarter, the Company incurred higher than expected costs associated with the compliance of the Sarbanes-Oxley laws. Expenses for professional service fees relating to the compliance project amounted to $0.6 million in the fourth quarter, compared to $0.2 million for the third quarter.

　　Net income for the fourth quarter was $17.4 million, representing an increase of 88% from a net income of $9.3 million for the same period in 2003 and an increase of 20% from a net income of $14.5 million for the previous quarter. Diluted net income per share was $0.30 for the quarter, compared to a diluted net income per share of $0.16 for the same period of 2003 and a diluted net income per share of $0.25 for the previous quarter. Net income for the year 2004 totaled $66.0 million, representing an increase of 110% from a net income of $31.4 million for the year 2003. Diluted net income per share was $1.15 for the year 2004, compared to a diluted net income per share of $0.58 for the year 2003.

　　Non-GAAP net income for the fourth quarter totaled $18.4 million, or $0.31 non-GAAP diluted net income per share, compared to a non-GAAP net income of $15.9 million, or $0.28 non-GAAP diluted net income per share for the same period in 2003 and of $17.4 million, or $0.30 non-GAAP diluted net income per share for the previous quarter. Non-GAAP net income for the year 2004 totaled $71.6 million, or $1.23 non-GAAP diluted net income per share, as compared to a non-GAAP net income of $41.0 million, or $0.75 non-GAAP diluted net income per share for the year 2003.

　　As of December 31, 2004, SINA's cash, cash equivalents and investments in marketable securities totaled $275.6 million, an increase of $32.1 million from three months ago. Cash flow from operating activities for the fourth quarter was $30.4 million, compared to $10.8 million for the previous quarter and $20.8 million for the same period in 2003. The sequential increase in cash flows from operating activities was primarily due to an increase in liabilities, an increase in net income and a decrease in accounts receivable balance. Liabilities increased from $43.2 million at September 30, 2004 to $49.0 million at December 31, 2004. Net income increased from $14.5 million in the third quarter to $17.4 million in the fourth quarter. Accounts receivable decreased from $42.9 million at September 30, 2004 to $39.9 million at December 31, 2004.

　　Online Games

　　On November 10, 2004, SINA through its joint venture with NcSoft commenced the commercial operation of the Lineage 2 game. During the fourth quarter, after commercialization, the daily average concurrent user count was approximately 65,000. The maximum concurrent user count reached during the month of December 2004 was approximately 94,000.

　　During the month of December 2004, the total number of registered accounts for the Company’s casual game portal iGame reached 6.5 million with about 560,000 active users. As of the end of December 2004, the casual game portal offered 27 games.

　　Business Outlook

　　The Company estimates that its total revenues for Q1 2005 to be between $43.0 million and $47.0 million, with advertising revenues between $16.5 million and $17.0 million and non-advertising revenues between $26.5 million and $30.0 million. Non-GAAP net income is expected to be between $11.0 million and $13.0 million for Q1 2005. The effective income tax rates for Q1 2005 and for the full year 2005 are expected to be between 5% and 10%. As a result of the notice issued by SARFT in late January 2005, the changes in China Mobile’s billing process for MMS in January 2005, and China Mobile’s migration from MMS to MISC platform, there is greater uncertainty as to these financial projections at this time than there has been in recent prior quarters with respect to such projections.

　　Non-GAAP Measures

　　To supplement the consolidated financial statements presented in accordance with GAAP, the Company uses non-GAAP measures of gross profit, operating income, net income and earnings per share, which are adjusted from results based on GAAP to exclude certain expenses, gains and losses. These non-GAAP financial measures are provided to enhance the user's overall understanding of the Company’s current financial performance and prospects for the future.

　　The Company’s non-GAAP gross profit excludes, as applicable, stock-based compensation related to the cost of revenues. Non-GAAP income from operations excludes, as applicable, stock based compensation, amortization of intangibles and write-off of intangibles. Non-GAAP net income and non-GAAP diluted earnings per share exclude, as applicable, stock-based compensation, amortization of intangibles, write-off of intangibles, amortization of convertible debt issuance cost and equity investment gains and losses. The Company believes these non-GAAP financial measures provide useful information to both management and investors, as they exclude certain expenses (i) that are not expected to result in future cash payments, gains and losses and (ii) that are non-recurring in nature or may not be indicative of our core operating results. In addition, because the Company has historically reported certain non-GAAP results to investors, the Company believes the inclusion of non-GAAP measures provides consistency in our financial reporting. These measures should be considered in addition to results prepared in accordance with generally accepted accounting principles, but should not be considered a substitute for or superior to GAAP results. Consistent with the Company’s historical practice, the non-GAAP measures included in this press release have been reconciled to the nearest GAAP measures.

　　The Company’s management believes excluding non-cash amortization expense of stock-based compensation from its non-GAAP financial measures of gross profit, income from operations and net income is useful for itself and investors as the expense does not impact cash earnings and is reflected in the earnings per share through increased share counts.

　　The Company’s management believes excluding the non-cash amortization and write off expense of intangible assets resulting from business acquisition from its non-GAAP financial measures of income from operations and net income is useful for itself and investors, because they enable a more meaningful comparison of the Company’s cash earnings and performance between reporting periods. In addition, such charges will not result in cash settlement in the future.

　　The Company’s management believes excluding non-cash amortization expense of issuance cost relating to convertible bonds from its non-GAAP financial measure of net income is useful for itself and investors as such expense does not have any impact on cash earnings.

　　The Company’s management believes excluding gains and losses from equity investment from its non-GAAP financial measure of net income is useful for itself and investors, because such gains and losses will not result in cash settlement in the future nor impact the Company’s future cash earnings or cash flows. The Company does not typically invest in common stock of other companies. Thus, these charges are otherwise unrelated to the Company’s ongoing business operations.

　　Unaudited Financial Numbers

　　The financial numbers included in this press release are unaudited. At this time, the Company’s independent auditor, PricewaterhouseCoopers, has not completed its audit of the Company’s financial statements and related notes and has not completed its audit of internal control over financial reporting. The financial numbers included herein are subject to adjustment pending the completion of such audits.

　　Conference Call

　　SINA will host a conference call at 8:00 p.m. Eastern Time today to present an overview of the Company's financial performance and business operations for the fourth quarter 2004. The dial-in number for the call is 617-786-4501. The pass code is 53753723. A live webcast of the call will be available from 8:00 p.m. – 9:00 p.m. ET on Monday, February 7, 2005, (9:00 a.m. – 10:00 a.m. Beijing Time on February 8, 2005).

　　The call can be accessed through SINA's corporate web site at corp.sina.com. The call will be archived for 12 months on SINA’s corporate website at corp.sina.com. A replay of the conference call will be available for forty-eight hours after the conclusion of the conference call. The dial-in number is 617-801-6888. The pass code for the replay is 74798031.

　　About SINA

　　SINA Corporation (NASDAQ: SINA) is a leading online media company and value-added information service (VAS) provider for China and for global Chinese communities. With a branded network of localized web sites targeting Greater China and overseas Chinese, SINA provides services through five major business lines including SINA.com (online news and content), SINA Mobile (mobile value-added services), SINA Online (community-based services and games), SINA.net (search and enterprise services) and SINA E-Commerce (online shopping and travel). Together these provide an array of services including region-focused online portals, mobile value-added services, search and directory, interest-based and community-building channels, free and premium email, online games, virtual ISP, classified listings, fee-based services, e-commerce and enterprise e-solutions.

　　Safe Harbor Statement

　　This announcement contains forward-looking statements concerning SINA’s expected financial performance (as described without limitation in the Business Outlook section and quotations from management in this press release), as well as SINA’s strategic and operational plans. SINA may also make written or oral forward-looking statements in our periodic reports to the Securities and Exchange Commission on forms 10-K, 10-Q, 8-K, etc., in its annual report to shareholders, in its proxy statements, in its offering circulars and prospectuses, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, SINA’s historical losses, its limited operating history, the uncertain regulatory landscape in the People's Republic of China, the effect of the notice issued by SARFT in late January 2005 on the Company’s revenues from usage-based SMS products promoted via direct advertisement on radio and television, the Company’s ability to develop and market other usage-based SMS products, fluctuations in quarterly operating results, the Company's reliance on mobile value-added service and online advertising sales for a majority of its revenues, the Company’s reliance on mobile operators in China to provide mobile value-added service, the changes in January 2005 by China Mobile to its billing process for undelivered MMS services and the effect of such changes on the Company’s MMS revenues, the migration by China Mobile of MMS onto MISC platform and the effect of such migration on the Company’s MMS revenues, any failure to successfully develop and introduce new products and any failure to successfully integrate acquired businesses. Further information regarding these and other risks is included in SINA's Annual Report on Form 10-K for the period ended December 31, 2003 and its recent reports on Form 10-Q as well as in its other filings with the Securities and Exchange Commission.