Sina.com hit with CEO exit, job cuts
By CNN's Kristie Lu Stout
HONG KONG, China (CNN) -- Sina.com will slash 15 percent of its workforce and replace president and CEO Wang Zhi Dong amid reports it is looking to be taken over.
The Chinese Web portal said on Monday it would cut roughly 90 jobs in a bid to improve efficiency, but it may not be enough for the company to weather China's stormy Internet sector.
Chief operating officer Daniel Mao has replaced Wang Zhi Dong as CEO while general manager Wang Yan has been promoted to president. Analysts say the shuffle is taking place as the company readies itself for a buyer.
Job cuts not enough
Sina.com's Beijing-based spokesperson Wang Jie told CNN the payroll cut is a move to spur efficiency.
"The company needs to improve efficiency and maintain a strong financial position," he said.
But analysts say Sina.com requires much more drastic restructuring to survive the dotcom shakeout.
"The most serious problem the company has is its multi-market presence in Taiwan and Hong Kong," Merrill Lynch Internet analyst David Cui told CNN.
"Without generating sufficient revenue to compensate for that major staff presence, that's the major issue the company needs to handle."
Sina.com is a market leader among Chinese-language portals in the Mainland China and North America markets, but is a not a top destination for Taiwan and Hong Kong surfers.
"In the portal business, you have to be in the top two to have meaningful revenue," Cui added.
Sina.com is the not the only China portal to swing the layoff axe.
Last month, Chinadotcom announced that it would axe 600 jobs by July in an effort to save an expected U.S. $50 million in annual payroll costs. The cuts were announced in addition to the 400 layoffs made public in March.
Analysts say all four Nasdaq-listed China portal firms -- Chinadotcom, Netease, Sina.com and Sohu.com -- need to cut costs to boost revenues in a crowded market.
All four Web sites are all vying for control of China's limited $100 million Internet advertising market.
Rumors of buy-out
A company statement said Wang resigned as the company's president, chief executive officer, and director to pursue other interests. He will however continue to serve the company as a chief advisor.
Market talk suggests that Wang moved aside to a more suitable CEO take the reigns of the company as it woos potential buyers.
"There are off the record rumors that Chinadotcom wants to buy them," one Beijing-based analyst told CNN.
"Rumor is Wang wants to move aside to make that happen since he is too close to his baby."
"Clearly they have held talks," said another Internet analyst. "But there is no deal yet."
In March 2001, Sina.com boasted 2.2 billion page views, 22.6 million registered users and 25 million unique users.
Sina.com closed at $1.85 on Monday, up 6.3 percent from its Friday close.
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