China’s fluorishing internet traffic is generating ample growth opportunities for Chinese internet companies, in particular driven by exuberant online advertising in gearing up for the Beijing Summer Olympics.
China’s largest online portal, Nasdaq-listed Sina Corp, reported that its second quarter net income soared 74 percent to US$25.2 million, or 42 cents a share, up from 25 cents a share a year ago. Revenue increased 53% year-on year to US$91.3 million and exceeded analyst expectations. The company expects $100 million to $104 million revenue for the next quarter.

Shangai-based Sina’s strong growth was spurred by online advertising income that jumped 58% YoY to US$64.9 million, accounting for 71% of Sina’s total revenues, and non-ad revenue rose 42% YoY to US$26.4 million. In addition revenue from mobile value-added services (MVAS) rose 44% to US$24.5 million.
Earlier Chinese portal Sohu had posted blistering 2Q, 2008 growth as net income soared 604% YoY and 86% QoQ to US$40.2 million, based on revenue of US$102 million, up 162% YoY and 20% QoQ. The Nasdaq-listed firm announced an impending IPO for its online gaming unit Changyu and next quarter sales are projected at US$112-116 mln.
China’s reigning search engine powerhouse, Baidu also reported sterling 2nd quarter earnings that surged 87% YoY to US$38.8 million and sales doubled to US$117 million, consolidating the company’s stronghold over 64.4% of the Chinese online search market and further leaving Google trailing in its wake.

That likely explains Google ‘s recent move to launch free music search services only available in China, which will be supported by advertising revenue, and perhaps a better alternative to winning Chinese hearts.