##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 Date of event requiring this shell company report
 Commission file number 000-30698
 SINA CORPORATION
 (Exact name of Registrant as specified in its charter)
 Cayman Islands  (Jurisdiction of incorporation or organization)
 Room 1802, United Plaza
1468 Nan Jing Road West
Shanghai 200040, China  (Address of principal executive offices)
 Contact Person: Chief Financial Officer
Phone: +8610 8262 8888
Facsimile: +8610 8260 7166
Address: 20/F Beijing Ideal International Plaza
No. 58 Northwest 4th Ring Road
Haidian District, Beijing, 100080, Peoples Republic of China  (name, telephone, e-mail and/or facsimile number and address of company contact person)
 Securities registered or to be registered pursuant to Section 12(b) of the Act.
 Title of each class
    
    Name of each exchange on which registeredOrdinary Shares, $0.133 par value
    
    The NASDAQ Stock Market LLC (NASDAQ Global Select Market)Ordinary Shares Purchase Rights
 Securities registered or to be registered pursuant to Section 12(g) of the Act.
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
  þ o
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 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
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TABLE OF CONTENTS
 INTRODUCTION
    
    
    3INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
    
    
    3PART I
    
    
    3Item 1. Identity of Directors, Senior Management and Advisers
    
    
    3Item 2. Offer Statistics and Expected Timetable
    
    
    3Item 3. Key Information
    
    
    3Item 4. Information on the Company
    
    
    24Item 4A. Unresolved Staff Comments
    
    
    44Item 5. Operating and Financial Review and Prospects
    
    
    44Item 6. Directors, Senior Management and Employees
    
    
    59Item 7. Major Shareholders and Related Party Transactions
    
    
    68Item 8. Financial Information
    
    
    71Item 9. The Offer and Listing
    
    
    71Item 10. Additional Information
    
    
    72Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    79Item 12. Description of Securities Other than Equity Securities
    
    
    80PART II
    
    
    80Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    80Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    81Item 15. Controls and Procedures
    
    
    81Item 16A. Audit Committee Financial Expert
    
    
    81Item 16B. Code of Ethics
    
    
    81Item 16C. Principal Accountant Fees and Services
    
    
    82Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    82Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    82Item 16F. Change in Registrants Certifying Accountant
    
    
    82Item 16G. Corporate Governance
    
    
    82PART III
    
    
    82Item 17. Financial Statements
    
    
    82Item 18. Financial Statements
    
    
    82Item 19. Exhibits
    
    
    82SIGNATURES
    
    
    86EX-4.9EX-4.19EX-4.20EX-4.21EX-4.22EX-4.23EX-4.24EX-4.25EX-4.26EX-4.40EX-4.41EX-4.42EX-8.1EX-12.1EX-12.2EX-13.1EX-13.2EX-15.1EX-15.2
  2




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INTRODUCTION
 In this annual report, except where the context otherwise requires and for purposes of this annual
report only:
 
    
    we, us, our company, the Company, our and SINA refer to SINA Corporation, its
subsidiaries, and, in the context of describing our operations and consolidated financial
information, include our consolidated variable interest entities (VIEs) in China;
    
    China or PRC refers to the Peoples Republic of China solely for the purpose of this
annual report, and do not include the Hong Kong Special Administrative Region, the Macau
Special Administrative Region or Taiwan;
    
    GAAP refers to generally accepted accounting principles in the United States; PRC GAAP
refers to generally accepted accounting principles in the PRC;
    
    shares or common shares refer to our ordinary shares;
    
    all references to RMB or renminbi are to the legal currency of China, and all references
to $, dollars, US$ and U.S. dollars are to the legal currency of the United States;
and
    
    all discrepancies in any table between the amounts identified as total amounts and the sum of
the amounts listed therein are due to rounding.
 
 INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
 This Annual Report on Form 20-F contains forward-looking statements. These statements relate
to future events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as may, will, should, expect, plan,
anticipate, believe, estimate, predict, potential or continue, the negative of such
terms or other comparable terminology. These statements are only predictions. Actual events or
results may differ materially.
 Although we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness
of the forward-looking statements. We undertake no duty to update any of the forward-looking
statements after the date of this report to conform such statements to actual results or to changes
in our expectations.
 Readers are also urged to carefully review and consider the various disclosures made by us
which attempt to advise interested parties of the factors which affect our business, including
without limitation the disclosures made under the caption Risk Factors included herein.
 
 PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 A. Selected Financial Data
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Years ended December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004( In thousands, except per share data)Operations:Net revenues
    
    $
    369,587
    
    
    $
    246,127
    
    
    $
    212,854
    
    
    $
    193,552
    
    
    $
    199,987Gross profit
    
    
    219,252
    
    
    
    151,425
    
    
    
    133,444
    
    
    
    130,445
    
    
    
    138,376Income from operations
    
    
    74,581
    
    
    
    51,014
    
    
    
    34,907
    
    
    
    41,508
    
    
    
    69,325Income before income taxes and minority interests
    
    
    95,209
    
    
    
    64,233
    
    
    
    43,967
    
    
    
    45,525
    
    
    
    69,224Net income
    
    
    80,638
    
    
    
    57,729
    
    
    
    39,916
    
    
    
    43,115
    
    
    
    65,996Net income per shareBasic
    
    $
    1.44
    
    
    $
    1.05
    
    
    $
    0.74
    
    
    $
    0.82
    
    
    $
    1.33Diluted
    
    $
    1.33
    
    
    $
    0.97
    
    
    $
    0.69
    
    
    $
    0.75
    
    
    $
    1.15
 December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(In thousands)Financial position:Cash, cash equivalents and short-term investments
    
    $
    603,824
    
    
    $
    477,999
    
    
    $
    362,751
    
    
    $
    300,689
    
    
    $
    275,635Working capital
    
    
    498,524
    
    
    
    377,608
    
    
    
    267,116
    
    
    
    297,910
    
    
    
    252,027Total assets
    
    
    822,494
    
    
    
    662,263
    
    
    
    538,809
    
    
    
    468,721
    
    
    
    430,425Long-term liabilities
    
    
    4,039
    
    
    
    1,337
    
    
    
    
    
    
    
    100,000
    
    
    
    102,142Total liabilities
    
    
    197,946
    
    
    
    167,287
    
    
    
    150,996
    
    
    
    149,099
    
    
    
    177,080Total shareholders equity
    
    
    620,505
    
    
    
    494,976
    
    
    
    387,813
    
    
    
    319,622
    
    
    
    253,345
 
 *
    
    The Company began to include stock-based compensation charges in its costs of revenues and
operating expenses starting January 1, 2006 in accordance with the Statement of Financial
Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based Payment. Stock-based
compensation charges for fiscal 2008, 2007 and 2006 were $14.3 million, $8.7 million and $9.5
million, or $0.24 diluted net income per share, $0.15 diluted net income per share and $0.16
diluted net income per share, respectively. B. Capitalization and Indebtedness
  C. Reasons for the Offer and Use of Proceeds
  D. Risk Factors
 Due to the relatively new and evolving market that we operate in, we cannot predict whether we
will meet internal or external expectations of future performance.
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
    
    offer new and innovative products;
    
    attract buyers for our mobile value-added services (MVAS);
 
    
    attract advertisers;
    
    attract a larger audience to our network;
    
    derive revenue from our users from fee-based Internet services;
    
    respond effectively to competitive pressures and address the effects of strategic
relationships or corporate combinations among our competitors;
    
    maintain our current, and develop new, strategic relationships;
    
    increase awareness of our brand and continue to build user loyalty;
    
    attract and retain qualified management and employees;
    
    upgrade our technology to support increased traffic and expanded services; and
    
    expand the content and services on our network, secure premium content and increase
network bandwidth in a cost-effective manner.
  You should not place undue reliance on our financial guidance, nor should you rely on our
quarterly operating results as an indication of our future performance because our results of
operations are subject to significant fluctuations.
  We are relying on advertising sales as a significant part of our future revenues, but the
online advertising market is subject to many uncertainties, which could cause our advertising
revenues to decline.
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
    
    the development and retention of a large base of users possessing demographic
characteristics attractive to advertisers;
    
    the maintenance and enhancement of our brands in a cost effective manner;
    
    increased competition and potential downward pressure on online advertising prices and
limitations on web page space;
    
    changes in government policy that curtail or restrict our online advertising services;
    
    the acceptance of online advertising as an effective way for advertisers to market their
businesses;
    
    the development of independent and reliable means of verifying levels of online
advertising and traffic; and
    
    the effectiveness of our advertising delivery, tracking and reporting systems.
    The consolidation of advertising agencies in China could increase the bargaining power of
larger advertising agencies, which may adversely impact our revenue growth.
  We are relying on MVAS for a significant portion of our future revenue. Our MVAS revenues have
declined in the past and may decrease further in the future.
  6




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
    
    our ability to develop new services that become accepted by the market;
    
    our ability to retain existing customers of our subscription services;
    
    our ability to attract new subscribers in a cost-effective manner;
    
    our ability to provide satisfactory services to our customers;
    
    competitors, including operators, may launch competing or better products than ours;
    
    changes in policy, process and/or system by China Mobile Communication Corporation
(China Mobile), China Unicom Co., Ltd. (China Unicom) or other operators, on whom we
rely for service delivery, billing and payment collection, and who in the past have made
sudden changes that have significantly impacted our revenues and may continue to do so in
the future; and
    
    changes in government regulations, which could restrict our MVAS offerings, curtail our
ability to market our services or change user adoption or usage patterns in a negative way.
For example, in August 2007, the Ministry of Information Industry (superseded by the
Ministry of Industry and Information Technology established in March 2008, both of which
referred to as MII) tightened the regulations over direct advertising in China, which
reduced the effectiveness of our direct advertising on MVAS and increased the difficulties
of new user recruitment. In December 2007, MII unified the dialing codes of each service
provider (SP), which increased the number of digits a user must input to subscribe to an
SPs MVAS, thereby making the purchasing process more complicated. MII has proposed
requiring mobile users, including pre-paid card subscribers, to register their real
identity. Implementation of these changes has led to in the past and may lead to in the
future fewer subscriptions of MVAS and a decrease in new customers.
  With respect to MVAS, we rely on China Mobile, China Unicom and other operators for marketing,
service delivery, billing and payment collection, and we may be negatively affected by changes
which they may make suddenly and unilaterally.
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
    
    In mid 2004, operators began transitioning SMS to new billing platforms, which has
resulted in added operational controls and procedures in areas such as customer subscription
and customer billing. Such change has increased the difficulties of new user recruitment and
the failure rate for fee collection from our SMS users.
    
    In January 2005, China Mobile stopped its MMS Album service, which allowed users to
retrieve their subscribed MMS messages from China Mobiles website when the subscribed MMS
messages could not be successfully delivered to their mobile phones. With the termination of
MMS Album, we are no longer able to collect fees from users when the MMS messages could not
be delivered to such users mobile phones.
    
    In March 2005, China Mobile began migrating MMS onto a new billing platform, which has
resulted in added operational controls and procedures and, correspondingly, increased the
difficulties of new user recruitment and increased the failure rate for fee collection from
our users.
    
    In April 2006, China Unicom issued a new policy that sets price ceilings for usage-based
and monthly subscription SMS. Such change may require us to lower our current prices on
certain SMS services or discontinue offering these services completely.
    
    In July 2006, China Mobile made significant changes to its policy on subscription-based
MVAS, which included requiring double confirmations on new MVAS subscriptions as well as
sending SMS reminders to existing monthly subscribers of SMS, MMS and WAP to inform them of
their MVAS subscription and fee information. In addition, China Mobiles provincial
subsidiaries have been canceling existing WAP subscriptions that have been inactive for four
months and existing SMS subscriptions of users who did not successfully receive more than
three SMS messages during the month. These policy changes from China Mobile have reduced our
ability to acquire new monthly MVAS subscribers and increased the churn rate of existing
monthly MVAS subscribers.
    
    In September 2006, China Unicom began enforcing a policy of double confirmation on new
MVAS subscriptions. Such change has significantly reduced our ability to acquire new monthly
MVAS subscribers.
    
    In April 2007, China Unicom changed its service fee settlement method with service
providers from estimated collection to actual collection. As a result of the switch, fee
settlement, based on the receipt of billing statement, with China Unicom has taken up to
four months, which has negatively impacted our cash flow. In addition, if we are unable to
rely on historical confirmation rates from China Unicom as a result of the change in fee
settlement method, we may need to defer recognition of such revenues until the billing
statements are received.
    
    In July 2007, China Mobile began implementing a score and ranking system that attempts to
reward larger, higher growth service providers with lesser user complaints. Receiving a low
score or ranking, e.g., as a result of too many complaints filed by our MVAS customers,
could result in a negative impact to our results of operations, cash flows and financial
condition.
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The markets for MVAS and Internet services are highly competitive, and we may be unable to
compete successfully against new entrants and established industry competitors, which could reduce
our market share and adversely affect our financial performance.
   9




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Our business is highly sensitive to the strength of our brands in the marketplace, and we may
not be able to maintain current or attract new users, customers and strategic partners for our
products and offerings if we do not continue to increase the strength of our brands and develop new
brands successfully in the marketplace.
  If we are unable to keep up with the rapid technological changes of the Internet industry, our
business may suffer.
  10




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If we fail to successfully develop and introduce new products and services, our competitive
position and ability to generate revenues could be harmed.
  Our investment in Web 2.0 services, search and WAP portal may not be successful.
  Our business and growth could suffer if we are unable to hire and retain key personnel who are
in high demand.
  Our strategy of acquiring complementary assets, technologies and businesses may fail and may
result in equity or earnings dilution.
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We may not be able to manage our expanding operations effectively, which could harm our
business.
  Increases in labor costs and the new labor law in the PRC may adversely affect our business
and our profitability.
 Regulations on Paid Annual Leave for Employees
 We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of
Internet business and companies, including limitations on our ability to own key assets such as our
website.
  
  The Circular of the Ministry of Information Industry
on Intensifying the Administration of Foreign Investment in Value-added Telecommunication Services Self-Correction Scheme of the ICP Companys Multi-regional
Value-added Telecommunication Business
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
 
  Administrative Provisions on Internet
Audio-visual Program Service
  13




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
 Government
Regulation and Legal Uncertainties
 In order to comply with PRC regulatory requirements, we operate our main businesses through
companies with which we have contractual relationships but in which we do not have controlling
ownership. If the PRC government determines that our agreements with these companies are not in
compliance with applicable regulations, our business in the PRC could be adversely affected.
 Item 4.C. Organizational Structure
  We rely on contractual arrangements with our VIEs for our China operations, which may not be
as effective in providing control over these entities as direct ownership.
   Even if we are in compliance with Chinese governmental regulations relating to licensing and
foreign investment prohibitions, the Chinese government may prevent us from advertising or
distributing content that it believes is inappropriate and we may be liable for such content or we
may have to stop profiting from such content.
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We may not be able to adequately protect our intellectual property, which could cause us to be
less competitive.
  We may be exposed to infringement claims by third parties, which, if successful, could cause
us to pay significant damage awards.
  The high cost of Internet access could hinder the growth of Internet users in China and thus
hamper the expansion of our user base.
  If we fail to scale our systems proportionally with the growing Internet population in China,
our website traffic growth could be adversely affected.
  15




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Our operations could be disrupted by unexpected network interruptions caused by system
failures, natural disasters or unauthorized tampering with our systems.
   We have contracted with third parties to provide content and services for our portal network
and we may lose users and revenue if these arrangements are terminated.
     Concerns about the security of electronic commerce transactions and confidentiality of
information on the Internet may reduce use of our network and impede our growth.
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The law of the Internet remains largely unsettled, which subjects our business to legal
uncertainties that could harm our business.
   We may be subject to claims based on the content we provide over our network and the products
and services sold on our network, which, if successful, could cause us to pay significant damage
awards.
   We may be subject to litigation for user-generated content provided on our websites, which may
be time-consuming to defend.
  We may have to register our encryption software with Chinese regulatory authorities, and if
they request that we change our encryption software, our business operations could be disrupted as
we develop or license replacement software.
 Regulations for the Administration of Commercial Encryption
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Privacy concerns may prevent us from selling demographically targeted advertising in the
future and make us less attractive to advertisers.
 Hong Kong Personal Data Ordinance
 We must rely on the Chinese government to develop Chinas Internet infrastructure and, if it
does not develop this infrastructure, our ability to grow our business could be hindered.
  Political and economic conditions in Greater China and the rest of Asia are unpredictable and
may disrupt our operations if these conditions become unfavorable to our business.
   Future outbreaks of Severe Acute Respiratory Syndrome (SARS), H1N1 flu (Swine flu), Avian
flu or other widespread public health problems could adversely affect our business.
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We have limited business insurance coverage.
  Our significant amount of deposits in certain banks in China may be at risk if these banks go
bankrupt or otherwise not have the liquidity to pay us during our deposit period.
  If tax benefits available to us in China are reduced or repealed, our results of operations
could suffer significantly and your investment in our shares may be adversely affected.
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We may incur a significant withholding tax should we decide to distribute earnings made on or
after January 1, 2008, outside of the PRC.
  Restrictions on paying dividends or making other payments to us bind our subsidiaries and VIEs
in China.
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Currency fluctuations and restrictions on currency exchange
may adversely affect our business, including limiting our ability to convert Chinese renminbi into
foreign currencies and, if Chinese renminbi were to decline in value, reducing our revenues and profits in
U.S. dollar terms.
 Currency fluctuations and restrictions on currency exchange may adversely affect our business,
including limiting our ability to convert Chinese renminbi into foreign currencies and, if Chinese
renminbi were to decline in value, reducing our revenues and profits in U.S. dollar terms.
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We have $99 million of zero-coupon, convertible, subordinated notes due 2023, or possibly
earlier upon a change of control, which we may not be able to repay in cash and could result in
dilution of our basic earnings per share.
  Changes to accounting pronouncements, including SFAS 123R, or taxation rules or practices,
including FIN 48, may adversely affect our reported results of operations or how we conduct our
business.
  We may be required to record a significant charge to earnings if we are required to reassess
our goodwill or other amortizable intangible assets arising from acquisitions.
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We may be required to record a significant charge to earnings from declines in fair value of
our marketable securities if such declines become other than temporary or if we are unable to hold
such investments until maturity.
  While we believe that we currently have adequate internal control procedures in place, we are
still exposed to potential risks from legislation requiring companies to evaluate controls under
Section 404 of the Sarbanes-Oxley Act of 2002.
  Our stock price has been historically volatile and may continue to be volatile, which may make
it more difficult for you to resell shares when you want at prices you find attractive.
  The Chinese legal system has inherent uncertainties that could limit the legal protections
available to you.
  You may experience difficulties in effecting service of legal process, enforcing foreign
judgments or bringing original actions in China based on United States or other foreign laws
against us.
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We may be classified as a passive foreign investment company, which could result in adverse
U.S. tax consequences to U.S. investors.
  Anti-takeover provisions in our charter documents and SINAs shareholder rights plan may
discourage our acquisition by a third party, which could limit our shareholders opportunity to
sell their shares at a premium.
    
 Item 4. Information on the Company
 A. History and Development of the Company
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B. Business Overview
 Overview
    Market Opportunities
  25




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Properties and Product Offerings
  RevenueClassificationProperties
    
    
    
    Advertising (online advertising)and
    
    
    

    Non-advertising (MVAS, search, and fee-based services)Services
    
    SINA.com
    
    SINA Community
    
    SINA Mobile
    
    SINA.net
    
    SINA E-Commerce§    News and online
    
    §    Blog
    
    §     SMS
    
    §    Search
    
    §    Online Shopping§    Vertical content
    
    §    Podcasting
    
    §     IVR
    
    §    Enterprise
solutions§    Online
advertising
    
    §    Album
    
    §     MMS§    Bar
    
    §     WAP§    Notepad
    
    §     CRBT§    Instant
    
    §     KJAVA§    Messaging§    Group§    BBS§    Email§    Post§    Space
 SINA.com
     SINA News
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SINA Sports
 SINA Entertainment.
 SINA Auto
 SINA Finance.
 SINA Eladies.
 SINA Luxury.
 SINA Real Estate.
 SINA Technology.
 SINA Digital.
 SINA Music.
 SINA Game.
 SINA Tools.
 SINA Video.
 SINA WAP.
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SINA Community
  SINA Blog.
 SINA Podcasting.
 SINA Album.
 SINA Bar.
 SINA Notepad.
 SINA UC.
 SINA Group.
 SINA BBS.
 SINA Mail.
 SINA Post.
 SINA Space.
 SINA Mobile
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News and Information
    
    Community
    
    Multimedia DownloadsHeadline news
    
    Games and quizzes
    
    Ring tonesFinancial news
    
    Educational products
    
    Logos and picturesTechnology news
    
    
    
    Screen saversSports newsWeather forecastJokes
  SINA SMS.
 SINA MMS.
 SINA IVR.
 SINA WAP.
 SINA CRBT.
 SINA KJAVA.
 SINA.net
  SINA iAsk.
 SINA E-Commerce
  Segment Information
 29




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Strategic Relationships
  Content Partnerships
  Application and Service Partnership
  Technology Infrastructure
   Seasonality
  Competition
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The markets for MVAS and Internet services are highly competitive, and we may be unable to compete successfully against new entrants and established industry competitors, which could reduce our market share and adversely affect our financial performance
 Intellectual Property and Proprietary Rights
  We may not be able to adequately protect our intellectual property, which could
cause us to be less competitive We may be exposed to infringement claims by third parties,
which, if successful, could cause us to pay significant damage awards
 Government Regulation and Legal Uncertainties
 The following description of PRC laws and regulations is based upon the opinions of lawyers
from Jun He Law Offices, our PRC counsel. For a description of legal risks relating to our
ownership structure and business, see Risk Factors.
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Overview
  Telecommunications Regulations of the Peoples Republic of
China MIIs Notice
on Adjusting the Catalogue of Telecommunications Business
 Regulations for the Administration of Foreign-Invested Telecommunications Enterprises
 Measures for the Administration of Internet Information Services
 PRC Corporate Structure
 C. Organizational Structure
 Classified Regulations
 Foreign Investment in Value-added Telecom Services
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Internet Information Services
 Measures for the Administration of Internet Information Services
    Online News Publishing
 Provisional Regulations for the Administration
of Website Operation of News Publication Services Provisions for the Administration of
Internet News Information Services, respectively,
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Online Transmission of Audio-visual Programs
 Measures for the Administration of Publication of
Audio-visual Programs through Internet or Other Information Network
 Reply on Approvals for Beijing SINA Internet Information Service Co., Ltd.
Engaging in the Business of Information Services Relating to Online Transmission of Audio-visual
Programs
 Administrative Provisions on
Internet Audio-visual Program Service
  Production of Radio and Television Programs
 Regulations for Administration on Production of Radio
and Television Programs
  MVAS
 Administrative Measures for Telecommunication Business
Operating Licenses
  34




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##### Table of Contents



Short Messaging Services
 Notice on Certain Issues Regarding the Regulation of Short
Messaging Services
 Internet Publishing
 Provisional Rules for the Administration
of Internet Publishing
   Online Games
 the Provisional Regulations for the Administration of Online Culture
 the Notice on
Carrying out the Decision from the State Council Regarding the Approval of Electronic and Online
Games Publications
  35




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##### Table of Contents



Circular of the Ministry of Culture on Strengthening the Examination of
Content of Online Games Products
  Internet Medical, Health and Drug Information Services
 Measures for the Administration of Internet Medical and Health Information
Services Measures for the
Administration of Internet Drug Information Services
  Notice concerning the Passage of Re-examination of
Health-related Information Service
 Online Cultural Products
 Provisional Regulations for the Administration of Online Culture Notice on Issues Relating to Implementing the Provisional Regulations for the Administration of
Online Culture
 
    
    production, duplication, import, wholesale, retail, leasing or broadcasting of online
cultural products;
    
    publishing of online cultural products on the Internet or transmission thereof to
computers, fixed-line or mobile phones, radios, television sets or gaming consoles for the
purpose of browsing, reading, using or downloading such products; or
    
    exhibitions or contests related to online cultural products.
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##### Table of Contents



Online Advertising
  
    
    Advertisement Law of the Peoples Republic of Chinapromulgated by the PRC State Congress
on October 27, 1994 and went into effect on February 1, 1995;
    
    Administrative Regulations for Advertisingpromulgated by the State Council on October
26, 1987 and went into effect on December 1, 1987;
    
    Implementation Rules for the Administrative Regulations for Advertisingpromulgated by
the State Council on January 9, 1988 and amended on December 3, 1998, December 1, 2000 and
November 30, 2004 respectively; and
    
    Provisions on the Administration of Foreign-funded Advertising Enterprises promulgated by
SAIC and Ministry of Commerce on March 2, 2004 and amended on August 22, 2008.
     International Connections for Computer Information Networks
  
    
    Measures for the Administration of International Connections to Chinas Public Computer
Interconnected Networks (1996);
    
    Provisional Regulations of the Peoples Republic of China for the Administration of
International Connections to Computer Information Networks (1997) and their Implementing
Measures (1998);
    
    Reply Concerning the Verification and Issuance of Operating Permits for Business Relating
to International Connections for Computer Information Networks and for Public Multimedia
Telecommunications Business (1998); and
    
    Administrative Measures for International Communications Gateways (2002).
  
    
    be a PRC legal person;
    
    have the appropriate equipment, facilities and technical and administrative personnel;
    
    have implemented and registered a system of information security and censorship; and
    
    effect all international connections through an international communications gateway
established with the approval of MII.
 Organizational Structure
 Information Security and Censorship
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##### Table of Contents




    
    The Law of the Peoples Republic of China on the Preservation of State Secrets (1988) and
its Implementing Rules (1990);
    
    The Law of the Peoples Republic of China Regarding State Security (1993) and its
Implementing Rules (1994);
    
    Rules of the Peoples Republic of China for Protecting the Security of Computer
Information Systems (1994);
    
    Notice Concerning Work Relating to the Filing of Computer Information Systems with
International Connections (1996);
    
    Administrative Regulations for the Protection of Secrecy on Computer Information Systems
Connected to International Networks (1997);
    
    Regulations for the Protection of State Secrets for Computer Information Systems on the
Internet (2000);
    
    Notice issued by the Ministry of Public Security of the Peoples Republic of China
Regarding Issues Relating to the Implementation of the Administrative Measure for the
Security Protection of International Connections to Computer Information Networks (2000);
    
    Decision of the Standing Committee of the National Peoples Congress Regarding the
Safeguarding of Internet Security (2000);
    
    Measures for the Administration of Commercial Website Filings for the Record (2002) their
Implementing Rules (2002);
    
    Measures for the Administration of IP Address Archiving (2005);
    
    Provision on Technical Measures for Internet Security Protection (2005); and
    
    Administrative Measures for the Graded Protection of Information Security (2007).
  Detailed Implementing Rules for the Measures for the Administration of
Commercial Website Filings for the Record,
 
    
    file with the BAIC and obtain electronic registration marks;
    
    place the registration marks on their websites homepages; and
    
    register their website names with the BAIC.
   38




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##### Table of Contents



Encryption Software
   
    
    Only specialized hardware and software, the core functions of which are encryption and
decoding, fall within the administrative scope of the regulations as encryption products
and equipment containing encryption technology. Other products such as wireless telephones,
Windows software and browsers do not fall within the scope of this regulation.
    
    The PRC government has already begun to study the laws in question in accordance with WTO
rules and Chinas external commitments, and will make revisions wherever necessary. The
Administrative Regulations on Commercial Encryptionwill also be subject to such scrutiny
and revision.
  Organizational Structure Risk Factors  We may have to register our encryption software with Chinese
regulatory authorities, and if they request that we change our encryption software, our business
operations could be disrupted as we develop or license replacement software.
 Online Education
 Measures for the Administration of Educational websites and Online Education
School
  Administrative Protection of Internet Copyright
 Measures for the Administrative Protection of Internet Copyright Measures for Imposing Copyright Administrative Penalties
  39




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##### Table of Contents



Organizational Structure
 Foreign Exchange
  
    
    Foreign Exchange Administration Rules, or the Exchange Rules, promulgated by the State
Council on January 29, 1996, which was amended on January 14, 1997 and on August 5, 2008
respectively; and
    
    Administration Rules of the Settlement, Sale and Payment of Foreign Exchange, or the
Administration Rules promulgated by China Peoples Bank on June 20, 1996.
    Notice of the General Affairs Department of the State Administration
of Foreign Exchange on the Relevant Operating Issues concerning the Improvement of the
Administration of Payment and Settlement of Foreign Currency Capital of Foreign-funded Enterprises
 Income Tax
  40




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##### Table of Contents



Circular on Implementation of Enterprise Tax Transition Preferential
Policy
 Administration Measures for Recognition of New And High Technology
Enterprises
    
    
    Notice of the State Administration of Taxation on the Issues concerning the Administration
of Enterprise Income Tax Deduction and Exemption (2008);
    
    Notice of the State Administration of Taxation on Intensifying the Withholding of
Enterprise Income Tax on Non-resident Enterprises Interest Income Sourcing from China(2008);
    
    Notice of the State Administration of Taxation on Several Issues Concerning the Recognition
of Incomes Subject to the Enterprise Income Tax (2008);
    
    Opinion of the State Administration of Taxation on Strengthening the Administration of
Enterprise Income Tax (2008);
    
    Notice of the Ministry of Finance and State Administration of Taxation on Several
Preferential Policies in Respect of Enterprise Income Tax (2008);
    
    Interim Measures for the Administration of Collection of Enterprise Income Tax on the Basis
of Consolidation of Trans-regional Business Operations(2008); and
    
    Implementing Regulations for Special Tax Adjustments (2009).
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Labor and Work Safety
  Regulations on Implementation of the Labor Contract Law Regulations on Paid Annual Leave for Employees
  
    
    the Work Safety Law of the PRC (2002);
    
    the Regulation on Occupational Injury Insurance (2004);
    
    the Interim Measures Concerning the Maternity Insurance (1995);
    
    the Interim Regulations on the Collection and Payment of
Social Insurance Premiums
(1999) and its interim measures (1999); and
    
    the Regulation on the Administration of Housing Fund (2002).
 Risk Factors  Even if we are in
compliance with Chinese governmental regulations relating to
licensing and foreign investment prohibitions, the Chinese government
may prevent us from advertising or distributing content that it
believes is
inappropriate and we may be liable for such content or we may have to
stop profiting from such content.
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##### Table of Contents



C. Organizational Structure
  JurisdictionSubsidiary
    
    of Organization
    
    OwnershipSINA.com Online
    
    United States of America
    
    
    100
    %Rich Sight Investment Limited
    
    Hong Kong
    
    
    100
    %SINA Hong Kong Limited
    
    Hong Kong
    
    
    100
    %Memestar Limited
    
    British Virgin Islands
    
    
    100
    %Crillion Corporation
    
    British Virgin Islands
    
    
    100
    %Davidhill Capital Inc.
    
    British Virgin Islands
    
    
    100
    %China Online Housing Technology Corporation
    
    Cayman Islands
    
    
    66
    %China Online Housing (Hong Kong) Co. Limited
    
    Hong Kong
    
    
    66
    %Beijing New Media Information Technology Co., Ltd.
    
    Peoples Republic of China
    
    
    100
    %SINA.com Technology (China) Co. Ltd.
    
    Peoples Republic of China
    
    
    100
    %Fayco Network Technology Development (Shenzhen) Co. Ltd.
    
    Peoples Republic of China
    
    
    100
    %Shanghai SINA Leju Information Technology Co. Ltd.
    
    Peoples Republic of China
    
    
    66
    %
  
    
    The ICP Company is a China company controlled by us through a series of contractual
arrangements and is responsible for operating www.sina.com.cn in connection with its
Internet content company license, selling the advertisements to advertisers and providing
MVAS with its Value-Added Telecommunication Services Operating License in China via
third-party operators to the users. It is 1.5% owned by Yan Wang, the Companys Chairman of
the Board, 22.50% owned by the Companys Executive Vice President Tong Chen, 26.75% owned by
the Companys Chief Operating Officer Hong Du, and 49.25% owned by two other non-executive
PRC employees of the Company. The registered capital of the ICP Company is $2.5 million.
    
    Xunlong is a China company controlled by us through a series of contractual arrangements
and is responsible for providing MVAS in China via third-party operators to users under its
Value-Added Telecommunication Services Operating License. It is owned by two non-executive
PRC employees of the Company. The registered capital of Xunlong is $1.2 million.
    
    StarVI is a China company controlled by us through a series of contractual arrangements
and is responsible for providing MVAS in China via third-party operators to users under its
Value-Added Telecommunication Services Operating License. It is owned by three non-executive
PRC employees of the Company. The registered capital of StarVI is $1.2 million.
    
    Wangxing is a China company controlled by us through a series of contractual arrangements
and is responsible for providing MVAS in China via third-party operators to users under its
Value-Added Telecommunication Services Operating License. It is owned by three non-executive
PRC employees of the Company. The registered capital of Wangxing is $1.2 million.
    
    Beijing SINA Infinity Advertising Co., Ltd. (the IAD Company), a China company
controlled by us through a series of contractual arrangements. The IAD Company is an
advertising agency. It is 20% owned by the Companys Executive Vice President Tong Chen and
80% owned by four non-executive PRC employees of the Company. This entity has an approved
business scope including design, production, agency and issuance of advertisements. The
registered capital of the IAD Company is $0.1 million.
    
    Beijing Yisheng Leju Information Services Co., Ltd. (Beijing Leju), a China company
controlled by us through a series of contractual arrangements. Beijing Leju is an
advertising agency and is responsible for selling advertisement for real-estate and home
decoration channels. It is owned by two non-executive PRC employees of the Company. This
entity has an approved business scope including agency and issuance of advertisements. The
registered capital of Beijing Leju is $0.1 million.
 .
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D. Property, Plants and Equipment
  
 Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
 This report contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Exchange Act, including, without limitation,
statements regarding our expectations, beliefs, intentions or future strategies that are signified
by the words expect, anticipate, intend, believe, the negative of such terms or other
comparable terminology. All forward-looking statements included in this document are based on
information available to us on the date hereof, and we undertake no obligation to update any such
forward-looking statements. Actual results could differ materially from those projected in the
forward-looking statements. In evaluating our business, you should carefully consider the
information set forth above in Item 3. Key Information  D. Risk Factors. We caution you that our
business and financial performance are subject to substantial risks and uncertainties, including
the factors identified in Item 3. Key Information  D. Risk Factors, that could cause actual
results to differ materially from those in the forward-looking statements.
 Overview
    44




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
    
    ability to compete with other Internet properties, including social networking sites, video sites and search
for brand influence and market share;
    
    increased competition and potential downward pressure on online advertising prices and
limitations on web page space;
    
    the maintenance and enhancement of our brands in a cost effective manner;
    
    development and retention of a large base of users possessing demographic characteristics
attractive to advertisers;
    
    expansion of our content portfolio, product offerings and network bandwidth in a cost
effective manner;
    
    the change in government policy that would curtail or restrict our online advertising
services; and
    
    the consolidation of advertising agencies leading to increased bargaining power of larger
advertising agencies.
    Critical Accounting Policies, Judgments and Estimates
   45




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Marketable securities
  Allowance for doubtful accounts
  Property and Equipment
  Impairment of goodwill and long-lived assets
 Goodwill and intangible assets
  Equity investments
  46




---



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Revenue recognition
 Advertising
  MVAS
     47




---



##### Table of Contents



Advertising expenses
  Stock-based compensation
   Shareholders Equity
 Income taxes
   48




---



##### Table of Contents



Foreign currency
  Recent accounting pronouncements
     49




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A. Operating Results
 Net revenues
 Years ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    % of Change(in thousands, except percentages)YOY
    
    
    YOY08 & 07
    
    
    07 & 06Net revenuesAdvertising
    
    $
    258,499
    
    
    
    70
    %
    
    $
    168,926
    
    
    
    69
    %
    
    $
    120,067
    
    
    
    56
    %
    
    
    53
    %
    
    
    41
    %Non-advertising:MVAS
    
    
    103,318
    
    
    
    28
    %
    
    
    70,489
    
    
    
    29
    %
    
    
    86,257
    
    
    
    41
    %
    
    
    47
    %
    
    
    -18
    %Others
    
    
    7,770
    
    
    
    2
    %
    
    
    6,712
    
    
    
    2
    %
    
    
    6,530
    
    
    
    3
    %
    
    
    16
    %
    
    
    3
    %Subtotal
    
    
    111,088
    
    
    
    30
    %
    
    
    77,201
    
    
    
    31
    %
    
    
    92,787
    
    
    
    44
    %
    
    
    44
    %
    
    
    -17
    %Total net revenues
    
    $
    369,587
    
    
    
    100
    %
    
    $
    246,127
    
    
    
    100
    %
    
    $
    212,854
    
    
    
    100
    %
    
    
    50
    %
    
    
    16
    %
  Advertising.
 50




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##### Table of Contents



Non-advertising.
 MVAS
 Years ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    % of Change(in thousands, except percentages)YOY
    
    
    YOY08 & 07
    
    
    07 & 062.0G products
    
    $
    64,005
    
    
    
    62
    %
    
    $
    55,404
    
    
    
    79
    %
    
    $
    73,665
    
    
    
    85
    %
    
    
    16
    %
    
    
    -25
    %2.5G products
    
    
    39,313
    
    
    
    38
    %
    
    
    15,085
    
    
    
    21
    %
    
    
    12,592
    
    
    
    15
    %
    
    
    161
    %
    
    
    20
    %Total MVAS revenues
    
    $
    103,318
    
    
    
    100
    %
    
    $
    70,489
    
    
    
    100
    %
    
    $
    86,257
    
    
    
    100
    %
    
    
    47
    %
    
    
    -18
    %
     
 
 
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##### Table of Contents




 
  Other non-advertising revenues
  Costs of revenues
 Years ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    % of Change
    
    
    % of ChangeYOY 08 & 07
    
    
    YOY 07 & 06(In thousands, except percentages)Costs of revenues:Advertising
    
    $
    100,008
    
    
    $
    63,466
    
    
    $
    42,529
    
    
    
    58
    %
    
    
    49
    %Non-advertising:MVAS
    
    
    48,005
    
    
    
    29,339
    
    
    
    34,255
    
    
    
    64
    %
    
    
    -14
    %Other
    
    
    2,322
    
    
    
    1,897
    
    
    
    2,626
    
    
    
    22
    %
    
    
    -28
    %Subtotal
    
    
    50,327
    
    
    
    31,236
    
    
    
    36,881
    
    
    
    61
    %
    
    
    -15
    %Total costs of revenues
    
    $
    150,335
    
    
    $
    94,702
    
    
    $
    79,410
    
    
    
    59
    %
    
    
    19
    %
  Advertising.
  52




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Non-advertising.
    Gross profit margins
 Years ended December 31,2008
    
    2007
    
    2006Gross profit margins:Advertising
    
    
    61
    %
    
    
    62
    %
    
    
    65
    %Non-advertising:
    
    
    55
    %
    
    
    60
    %
    
    
    60
    %MVAS
    
    
    54
    %
    
    
    58
    %
    
    
    60
    %Other
    
    
    70
    %
    
    
    72
    %
    
    
    60
    %Overall
    
    
    59
    %
    
    
    62
    %
    
    
    63
    %
  Advertising.
 Non-advertising.
 53




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##### Table of Contents



Operating expenses
 Years ended December 31,2008
    
    2007
    
    2006
    
    % of change(in thousands, except percentages)% of net
    
    
    
    
    
    % of net
    
    
    
    
    
    % of net
    
    YOY
    
    YOYrevenues
    
    
    
    
    
    revenues
    
    
    
    
    
    revenues
    
    08 & 07
    
    07 & 06Sales and marketing expenses
    
    $
    79,784
    
    
    
    22
    %
    
    $
    50,555
    
    
    
    21
    %
    
    $
    49,972
    
    
    
    23
    %
    
    
    58
    %
    
    
    1
    %Product development expenses
    
    $
    30,371
    
    
    
    8
    %
    
    $
    21,942
    
    
    
    9
    %
    
    $
    19,573
    
    
    
    9
    %
    
    
    38
    %
    
    
    12
    %General and administrative expenses
    
    $
    33,179
    
    
    
    9
    %
    
    $
    26,738
    
    
    
    11
    %
    
    $
    27,172
    
    
    
    13
    %
    
    
    24
    %
    
    
    -2
    %
 Sales and marketing expenses.
 Product development expenses.
 General and administrative expenses.
 Amortization of intangible assets
 Interest and other income
 Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Interest income
    
    $
    15,371
    
    
    $
    11,522
    
    
    $
    8,510Other income
    
    
    2,899
    
    
    
    1,209
    
    
    
    39$
    18,270
    
    
    $
    12,731
    
    
    $
    8,549
  Amortization of convertible debt issuance cost
  54




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Gain on business and equity investments, net
  Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)COHT
    
    $
    3,137
    
    
    $
    
    
    
    $
    Shanghai-NC Soft
    
    
    
    
    
    
    
    
    
    
    2,006Others
    
    
    (779
    )
    
    
    830
    
    
    
    (663
    )$
    2,358
    
    
    $
    830
    
    
    $
    1,343% of total net revenues
    
    
    
    *

    
    
    
    *

    
    
    1
    %
 
 *
    
    Less than 1%  Provision for income taxes
 Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Current income tax provision
    
    $
    14,098
    
    
    $
    6,030
    
    
    $
    4,401Deferred income tax
    
    
    (56
    )
    
    
    474
    
    
    
    (350
    )Total
    
    $
    14,042
    
    
    $
    6,504
    
    
    $
    4,051Income from China operations
    
    $
    108,147
    
    
    $
    70,167
    
    
    $
    56,128Effective tax rate for China operations
    
    
    13
    %
    
    
    9
    %
    
    
    7
    %
      55




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##### Table of Contents



If tax benefits
available to us in China are reduced or repealed, our results of operations could suffer
significantly and your investment in our shares may be adversely affected Income Taxes
 B. Liquidity and Capital Resources
 As of December 312008
    
    2007
    
    2006(In thousands)Cash and cash equivalents and short-term investments
    
    $
    603,824
    
    
    $
    477,999
    
    
    $
    362,751Working capital
    
    $
    498,524
    
    
    $
    377,608
    
    
    $
    267,116Shareholders equity
    
    $
    620,505
    
    
    $
    494,976
    
    
    $
    387,813
    56




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##### Table of Contents



Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Net cash provided by operating activities
    
    $
    114,000
    
    
    $
    89,065
    
    
    $
    63,097Net cash used in investing activities
    
    
    (23,960
    )
    
    
    (5,857
    )
    
    
    (850
    )Net cash provided by financing activities
    
    
    12,407
    
    
    
    19,037
    
    
    
    9,979Effect of exchange rate changes on cash and cash equivalents
    
    
    9,207
    
    
    
    6,244
    
    
    
    2,541Net increase in cash and cash equivalents
    
    
    111,654
    
    
    
    108,489
    
    
    
    74,767Cash and cash equivalents at beginning of period
    
    
    271,666
    
    
    
    163,177
    
    
    
    88,410Cash and cash equivalents at end of period
    
    $
    383,320
    
    
    $
    271,666
    
    
    $
    163,177
 Operating activities
    57




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Investing activities
    Financing activities
  C. Research and Development, Patents and Licenses, etc.
  D. Trend Information
  E. Off-Balance Sheet Arrangements
  F. Contractual Obligations
  Payments due by periodLess than one
    
    
    One to
    
    
    Three to
    
    
    More thanTotal
    
    
    year
    
    
    three years
    
    
    five years
    
    
    five years(In thousands)Operating lease obligations
    
    $
    8,874
    
    
    $
    5,317
    
    
    $
    3,221
    
    
    $
    336
    
    
    $
    Purchase commitments
    
    
    33,458
    
    
    
    26,183
    
    
    
    6,819
    
    
    
    432
    
    
    
    24Other long-term liabilities
    
    
    4,039
    
    
    
    
    
    
    
    1,536
    
    
    
    
    
    
    
    2,503Total contractual obligations
    
    $
    46,371
    
    
    $
    31,500
    
    
    $
    11,576
    
    
    $
    768
    
    
    $
    2,527
  58




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##### Table of Contents



Item 6. Directors, Senior Management and Employees
 A. Directors and Senior Management
  Name
    
    Age
    
    PositionCharles Chao
    
    
    43
    
    
    President, Chief Executive Officer and Director (Principal Executive Officer)Herman Yu
    
    
    38
    
    
    Chief Financial Officer (Principal Financial and Accounting Officer)Hong Du
    
    
    37
    
    
    Chief Operating OfficerTong Chen
    
    
    42
    
    
    Executive Vice President & Chief EditorYan Wang
    
    
    36
    
    
    Chairman of the BoardPehong Chen
    
    
    51
    
    
    Independent DirectorLip-Bu Tan
    
    
    49
    
    
    Independent DirectorTer Fung Tsao
    
    
    63
    
    
    Independent DirectorYichen Zhang
    
    
    45
    
    
    Independent DirectorSong-Yi Zhang
    
    
    53
    
    
    Independent DirectorHurst Lin
    
    
    44
    
    
    Independent Director
 Charles Chao
 Herman Yu
 Hong Du
 59




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##### Table of Contents



Tong Chen
 Yan Wang
 Pehong Chen
 Lip-Bu Tan
 Ter Fung Tsao
 Yichen Zhang
 Song-Yi Zhang
 60




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##### Table of Contents



Hurst Lin
  B. Amounts of Compensation Paid and Benefits Granted
 Compensation
   Shareholders Equity
 Share Incentive Plans
  Shareholders
Equity
  61




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##### Table of Contents



Ordinary SharesUnderlying
    
    Exercise PriceName
    
    Outstanding Options
    
    (US$/Share)
    
    Grant Date
    
    Expiration DateChao, Charles
    
    
    *
    
    
    $
    3.13
    
    
    January 8, 2001
    
    January 8, 2011*
    
    
    $
    1.50
    
    
    March 29, 2001
    
    March 29, 2011*
    
    
    $
    1.35
    
    
    August 29, 2001
    
    August 29, 2011*
    
    
    $
    17.50
    
    
    June 16, 2003
    
    June 16, 2013*
    
    
    $
    24.23
    
    
    July 27, 2004
    
    July 27, 2014*
    
    
    $
    24.73
    
    
    June 7, 2006
    
    June 7, 2012*
    (1)
    
    
    
    
    
    November 16, 2007
    
    
    
    *
    (1)
    
    
    
    
    
    January 12, 2009
    
    

    
    Yu, Herman
    
    
    *
    
    
    $
    20.86
    
    
    September 7, 2004
    
    September 7, 2014*
    
    
    $
    24.73
    
    
    June 7, 2006
    
    June 7, 2012*
    (1)
    
    
    
    
    
    November 16, 2007
    
    

    
    *
    (1)
    
    
    
    
    
    January 12, 2009
    
    

    
    Du, Hong
    
    
    *
    
    
    $
    12.98
    
    
    May 21, 2003
    
    May 21, 2013*
    
    
    $
    20.86
    
    
    September 7, 2004
    
    September 7, 2014*
    
    
    $
    26.43
    
    
    April 25, 2005
    
    April 25, 2015*
    
    
    $
    24.73
    
    
    June 7, 2006
    
    June 7, 2012*
    (1)
    
    
    
    
    
    November 16, 2007
    
    
    
    *
    (1)
    
    
    
    
    
    January 12, 2009
    
    
    
    Chen, Tong
    
    
    *
    
    
    $
    1.88
    
    
    August 14, 2002
    
    August 14, 2012*
    
    
    $
    15.47
    
    
    May 29, 2003
    
    May 29, 2013*
    
    
    $
    20.86
    
    
    September 7, 2004
    
    September 7, 2014*
    
    
    $
    24.73
    
    
    June 7, 2006
    
    June 7, 2012*
    (1)
    
    
    
    
    
    November 16, 2007
    
    
    
    *
    (1)
    
    
    
    
    
    January 12, 2009
    
    
    
    Chen, Pehong
    
    
    *
    
    
    $
    33.68
    
    
    September 26, 2003
    
    September 26, 2013*
    
    
    $
    36.40
    
    
    June 28, 2004
    
    June 28, 2014*
    
    
    $
    24.39
    
    
    June 23, 2006
    
    June 23, 2016*
    
    
    $
    49.95
    
    
    December 6, 2007
    
    December 6, 2013*
    
    
    $
    40.59
    
    
    September 8, 2008
    
    September 8, 2014Tan, Lip-Bu
    
    
    *
    
    
    $
    1.32
    
    
    November 27, 2001
    
    November 27, 2011*
    
    
    $
    33.68
    
    
    September 26, 2003
    
    September 26, 2013*
    
    
    $
    36.40
    
    
    June 28, 2004
    
    June 28, 2014*
    
    
    $
    26.37
    
    
    September 27, 2005
    
    September 27, 2015*
    
    
    $
    49.95
    
    
    December 6, 2007
    
    December 6, 2013*
    
    
    $
    40.59
    
    
    September 8, 2008
    
    September 8, 2014Tsao, Ter Fung
    
    
    *
    
    
    $
    17.00
    
    
    April 12, 2000
    
    April 12, 2010*
    
    
    $
    33.68
    
    
    September 26, 2003
    
    September 26, 2013*
    
    
    $
    36.40
    
    
    June 28, 2004
    
    June 28, 2014*
    
    
    $
    26.37
    
    
    September 27, 2005
    
    September 27, 2015*
    
    
    $
    24.39
    
    
    June 23, 2006
    
    June 23, 2016*
    
    
    $
    49.95
    
    
    December 6, 2007
    
    December 6, 2013*
    
    
    $
    40.59
    
    
    September 8, 2008
    
    September 8, 2014Zhang, Song-Yi
    
    
    *
    
    
    $
    30.35
    
    
    April 28, 2004
    
    April 28, 2014*
    
    
    $
    26.37
    
    
    September 27, 2005
    
    September 27, 2015*
    
    
    $
    24.39
    
    
    June 23, 2006
    
    June 23, 2016*
    
    
    $
    49.95
    
    
    December 6, 2007
    
    December 6, 2013*
    
    
    $
    40.59
    
    
    September 8, 2008
    
    September 8, 2014Zhang, Yi-Chen
    
    
    *
    
    
    $
    33.68
    
    
    September 26, 2003
    
    September 26, 2013*
    
    
    $
    36.40
    
    
    June 28, 2004
    
    June 28, 2014*
    
    
    $
    26.37
    
    
    September 27, 2005
    
    September 27, 2015*
    
    
    $
    24.39
    
    
    June 23, 2006
    
    June 23, 2016*
    
    
    $
    49.95
    
    
    December 6, 2007
    
    December 6, 2013*
    
    
    $
    40.59
    
    
    September 8, 2008
    
    September 8, 2014Wang, Yan
    
    
    *
    
    
    $
    24.23
    
    
    July 27, 2004
    
    July 27, 2014Other employees
    
    
    1,494,023
    
    

    From $0.5 to  
$33.29

    
    
    From June 17, 1999 to 
March 20, 2008
    
    From June 17, 2009 to September 8, 2014151,000
    (1)
    
    
    
    
    
    March 30, 2009
    
    
    
    Total
    
    
    3,519,226
 
 *
    
    Less than one percent of the outstanding ordinary shares.(1)
    
    Restricted share units.  62




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##### Table of Contents



Change in Control and Severance Agreements
 Board Practices  Potential Payments upon Termination or Change in
Control
 C. Board Practices
 Terms of Directors and Executive Officers
  Item 6.A. Directors and Senior Management
 Item 6.A. Directors and
Senior Management
 Board Committees
  63




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##### Table of Contents



Independent accountant
 1.
    
    Appoint the independent accountant for ratification by the stockholders and approve the
compensation of and oversee the independent accountant.2.
    
    Confirm that the proposed audit engagement team for the independent accountant complies
with the applicable auditor rotation rules.3.
    
    Ensure the receipt of, and review, a written statement from the Companys independent
accountant delineating all relationships between the accountants and the Company, consistent
with Independence Standards Board Standard 1.4.
    
    Review with the Companys independent accountant any disclosed relationship or service
that may impact the objectivity and independence of the accountant.5.
    
    Pre-approve all audit services and permitted non-audit services to be provided by the
independent accountant as required by the Exchange Act.6.
    
    Review the plan for and the scope of the audit and related services at least annually.
 Financial Reporting
 7.
    
    Review and discuss with finance management the Companys earnings press releases as well
as earnings guidance provided to analysts.8.
    
    Review the annual reports of the Company with finance management and the independent
accountant prior to filing of the reports with the SEC.9.
    
    Review with finance management and the independent accountant at the completion of the
annual audit:
 a.
    
    The Companys annual financial statements and related footnotes;b.
    
    The independent accountants audit of the financial statements;c.
    
    Any significant changes required in the independent accountants audit plan;d.
    
    Any serious difficulties or disputes with management encountered by the independent
accountant during the course of the audit; ande.
    
    Other matters related to the conduct of the audit which are to be communicated to
the Committee under generally accepted auditing standards.
 Related Party and Relationship Disclosure
 10.
    
    Ensure the receipt of, and review, a report from the independent accountant required by
Section 10A of the Exchange Act.11.
    
    Oversee the Companys compliance with SEC requirements for disclosure of accountants
services and Audit Committee members and activities.12.
    
    Review and approve all related party transactions other than compensation transactions.
 Critical Accounting Policies & Principles and Key Transactions
 13.
    
    Review with finance management and the independent accountant at least annually the
Companys application of critical accounting policies and its consistency from period to
period, and the compatibility of these accounting policies with generally accepted
accounting principles, and (where appropriate) the Companys provisions for future
occurrences which may have a material impact on the financial statements of the Company.14.
    
    Oversee the Companys finance function, which may include the adoption from time to time
of a policy with regard to the investment of the Companys assets.
 64




---



##### Table of Contents



15.
    
    Periodically discuss with the independent accountant, without Management being present,
(i) their judgments about the quality, appropriateness, and acceptability of the Companys accounting principles and financial
disclosure practices, as applied in its financial reporting, and (ii) the completeness and
accuracy of the Companys financial statements.16.
    
    Review and discuss with finance management all material off-balance sheet transactions,
arrangements, obligations (including contingent obligations) and other relationships of the
Company with unconsolidated entities or other persons, that may have a material current or
future effect on financial condition, changes in financial condition, results of operations,
liquidity, capital resources, capital reserves or significant components of revenues or
expenses.
 Internal Control and Related Matters
 17.
    
    Oversee the adequacy of the Companys system of internal controls. Obtain from the
independent accountant management letters or summaries on such internal controls. Review any
related significant findings and recommendations of the independent accountant together with
managements responses thereto.18.
    
    Oversee the Companys Anti-Fraud and Whistleblower Program.19.
    
    Perform annual self assessment on Audit Committee effectiveness.
    Potential Payments upon Termination or Change in Control
  Terms of Potential Payments  Termination
  65




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##### Table of Contents



Terms of Potential Payments  Change in Control
    D. Employees
  66




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##### Table of Contents



E. Share Ownership
  
    
    each shareholder known to us to own beneficially more than 5% of the ordinary shares;
    
    each director;
    
    each of our executive officers listed in Directors and Senior Management above; and
    
    all of our current directors and executive officers as a group.
  Number of Shares
    
    
    Percent ofName and Address of Beneficial Owners
    
    Beneficially Owned (#)
    
    
    Shares Beneficially Owned (%)(1)Major ShareholdersOppenheimerFunds, Inc. (2)
    
    
    5,242,200
    
    
    
    9.53
    %Two World Financial Center, 225 Liberty Street
New York, NY 10281Orbis Investment Management Ltd. (3)
    
    
    4,087,593
    
    
    
    7.43
    %34 Bermudiana Road, Hamilton HM 11,
BermudaT.Rowe Price Associates, INC (4)
    
    
    3,365,700
    
    
    
    6.12
    %100 E. Pratt Street,
Baltimore, Maryland 21202TPG-Axon Capital Management, LP (5)
    
    
    3,100,000
    
    
    
    5.64
    %888 Seventh Avenue, 38th Floor
New York, NY 10019Citigroup Financial Products Inc. (6)
    
    
    2,973,240
    
    
    
    5.41
    %399 Park Avenue
New York, NY 10013Directors and Executive OfficersLip-Bu Tan (7)
    
    
    *
    
    
    
    *c/o Walden International
One California Street, 28th Floor
San Francisco, CA 94111Ter Fung Tsao (8)
    
    
    *
    
    
    
    *c/o Helen Hsiao,
8F, Suite 801
136, Jean-Ai Road, SEC. 3
Taipei, TaiwanHurst Lin (9)
    
    
    *
    
    
    
    *Pehong Chen (10)
    
    
    *
    
    
    
    *333 Distel Circle
Los Altos, CA 94022Yan Wang (11)
    
    
    *
    
    
    
    *Yichen Zhang (12)
    
    
    *
    
    
    
    *CITIC 26/F CITIC Tower
1 Tim Mei Avenue,
Central Hong KongSong-Yi Zhang (13)
    
    
    *
    
    
    
    *c/o Morgan Stanley
27/F, Three Exchange Square,
Central Hong KongCharles Chao (14)
    
    
    *
    
    
    
    *Herman Yu (15)
    
    
    *
    
    
    
    *Hong Du (16)
    
    
    *
    
    
    
    *Tong Chen (17)
    
    
    *
    
    
    
    *All directors and executive officers as a group (11 persons) (18)
    
    
    1,205,411
    
    
    
    2.19
    %
 
 *
    
    Less than one percent of the outstanding ordinary shares.(1)
    
    For each named person, the percentage ownership includes ordinary shares which the person has
the right to acquire within 60 67




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##### Table of Contents



days after June 10, 2009. However, such shares shall not be deemed outstanding with respect to
the calculation of ownership percentage for any other person. Beneficial ownership calculations
for 5% shareholders are based solely on publicly-filed Schedule 13Ds or 13Gs, which 5%
shareholders are required to file with the SEC.(2)
    
    Beneficial ownership calculation is based solely on a review of a Schedule 13G filing made
with the SEC on January 29, 2009.(3)
    
    Beneficial ownership calculation is based solely on a review of a Schedule 13G filing made
with the SEC on February 17, 2009.(4)
    
    Beneficial ownership calculation is based solely on a review of a Schedule 13G/A filing made
with the SEC on February 12, 2009.(5)
    
    Beneficial ownership calculation is based solely on a review of a Schedule 13G and Schedule
13G/A filings made with the SEC on February 13, 2009.(6)
    
    Beneficial ownership calculation is based solely on a review of a Schedule 13G filing made
with the SEC on February 3, 2009.(7)
    
    Includes 3,000 shares held by a trust for which Mr. Tan and his wife serve as trustees and
69,000 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(8)
    
    Includes 10,000 shares held by Mr. Tsao and 103,500 shares issuable upon exercise of options
exercisable within 60 days of June 10, 2009.(9)
    
    Includes 20,972 shares held by Mr. Lin as of June 10, 2009.(10)
    
    Includes 6,882 shares held by a trust controlled by Mr. Chen and 51,000 shares issuable upon
exercise of options exercisable within 60 days of June 10, 2009.(11)
    
    Includes 100,000 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(12)
    
    Includes 66,000 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(13)
    
    Includes 73,500 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(14)
    
    Consists of 536,971 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(15)
    
    Includes 26,355 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(16)
    
    Includes 51,251 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(17)
    
    Includes 86,980 shares issuable upon exercise of options exercisable within 60 days of June 10, 2009.(18)
    
    Includes 1,164,557 shares issuable upon exercise of options within 60 days of June 10, 2009
held by all our directors and officers as a group.  Item 6.B. Compensation
 Share Incentive Plans
 
 Item 7. Major Shareholders and Related Party Transactions
 68




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##### Table of Contents



A. Major Shareholders
 Item 6.E. Directors, Senior Management and Employees
 Share Ownership.
   B. Related Party Transactions
     Commercial Contracts
  Control Agreements
  69




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##### Table of Contents




    
    Our subsidiary STC agreed to provide Yan Wang, our former Chief Executive Officer and
current Chairman of the Board, an interest-free loan of RMB 300,000 for purposes of providing
capital to Beijing SINA Internet Information Services Co., Ltd. and RMB 300,000 for purposes
of providing capital to Guangdong SINA Internet Information Service Co., Ltd. The entire
principal amount of each of these loans is currently outstanding. Each of these loans was
extended as replacement for loans previously extended to Mr. Wang by BSIT in the same
principal amounts disclosed above and on the same terms as described below, except where
noted, which loans were replaced by the STC loans due to BSIT being dissolved by the Company.
    
    STC also agreed to provide Tong Chen, our Executive Vice President and Chief Editor,
interest-free loans totaling RMB300,000 for purposes of providing capital to Guangdong SINA
Internet Information Service Co., Ltd. In addition, STC has agreed to provide Tong Chen
interest-free loans totaling RMB 4,500,000 for purposes of providing capital to Beijing SINA
Internet Information Service Co., Ltd. and an interest-free loan of RMB 200,000 for purposes
of providing capital to Beijing SINA Infinity Advertising Co., Ltd. The entire principal
amount of each of these loans is currently outstanding. Each of these loans was extended as
replacement for loans previously extended to Mr. Chen by BSIT in the same principal amounts
disclosed above and on the same terms as described below, except where noted, which loans
were replaced by the STC loans due to BSIT being dissolved by the Company.
    
    STC agreed to provide Hong Du, our Chief Operating Officer, an interest-free loan of RMB
5,350,000 for purposes of providing capital to Beijing SINA Internet Information Service Co.,
Ltd. The entire principal amount of the loan is currently outstanding. The loan was extended
as replacement for the loan previously extended to Ms. Du by BSIT in the same principal
amount as disclosed above and on the same terms as described below, except where noted, which
loans were replaced by the STC loans due to BSIT being dissolved by the Company.
    
    The aforementioned capital investments in the VIEs are funded by SINA and recorded as
interest-free loans to the PRC officers and employees. Such interest-free loans are extended
solely for subscription of the shares of the VIEs, and the transfer of ownership of the
 shares in the VIEs, as directed by SINA, is the requisite form of repayment of such
interest-free loans. These are not personal loans. Under various contractual agreements,
employee shareholders of the VIEs are required to transfer their ownership in these entities
to our subsidiaries in China when permitted by PRC laws and regulations or to our designees
at any time, and all shareholders of the VIEs are obligated to waive their right of first
refusal or any other rights that are restrictive on such requested transfer. In addition, our
employee shareholders of the VIEs have pledged their shares in the VIEs (and all rights
relating thereto) as collateral for non-payment of (i) the interest-free loans and (ii) fees
on technical and other services due to us. Except as set forth above, employee shareholders
of the VIEs are not otherwise permitted to transfer, pledge or otherwise encumber their
ownership of VIEs without STCs written approval. All voting rights with respect to the
 shares of the VIEs are assigned to us. We have the power to appoint all directors and senior
management personnel of the VIEs. Through our wholly-owned subsidiaries in China, we have
also entered into exclusive technical agreements and other service agreements with the VIEs,
under which these subsidiaries provide technical services and other services to the VIEs in
exchange for substantially all net income of the VIEs. In addition to the terms described
above which were also applicable to the BSIT loans, STC has entered into a letter agreement
with the PRC officers and employees that provides for (i) the cancellation of such officers
and employees obligations under the contractual agreements upon the transfer or acquisition
of shares held by such officers and employees and (ii) the indemnification of such officers
and employees for any liability incurred in the course of discharging such officers and
employees obligations under any of the contractual agreements.
 Employment and Compensation Agreements
 Item 6. Directors, Senior Management and Employees
 Indemnification Agreements
  Registration Rights Agreements
  C. Interests of Experts and Counsel
  70




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##### Table of Contents



Item 8. Financial Information
 A. Consolidated Statements and Other Financial Information
  Legal Proceedings
  Dividend Policy
  B. Significant Changes
  
 Item 9. The Offer and Listing
 A. Listing Details
  Trading PriceHigh
    
    
    LowAnnual Highs and Lows2004
    
    
    49.50
    
    
    
    18.882005
    
    
    34.25
    
    
    
    20.182006
    
    
    30.36
    
    
    
    20.232007
    
    
    59.27
    
    
    
    29.162008
    
    
    58.60
    
    
    
    21.49Quarterly Highs and LowsFirst Quarter 2007
    
    
    37.73
    
    
    
    29.16Second Quarter 2007
    
    
    43.27
    
    
    
    31.53Third Quarter 2007
    
    
    50.45
    
    
    
    34.65Fourth Quarter 2007
    
    
    59.27
    
    
    
    43.50First Quarter 2008
    
    
    46.97
    
    
    
    32.00Second Quarter 2008
    
    
    58.60
    
    
    
    35.23Third Quarter 2008
    
    
    47.86
    
    
    
    31.80Fourth Quarter 2008
    
    
    35.16
    
    
    
    21.49Monthly Highs and LowsDecember 2008
    
    
    30.37
    
    
    
    22.00January 2009
    
    
    25.48
    
    
    
    19.47February 2009
    
    
    24.12
    
    
    
    19.89March 2009
    
    
    25.85
    
    
    
    17.89April 2009
    
    
    30.77
    
    
    
    22.71May 2009
    
    
    29.68
    
    
    
    25.59
 71




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##### Table of Contents



B. Plan of Distribution
  C. Markets
  D. Selling Shareholders
  E. Dilution
  F. Expenses of the Issue
  
 Item 10. Additional Information
 A. Share Capital
  B. Memorandum and Articles of Association
  Register, Entry Number and Objects
  Directors
  72




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##### Table of Contents



Rights, Preferences and Restrictions of Ordinary Shares
 General
 Dividend Rights Rights to Share Profits pari
passu
 Voting Rights Item 6. Directors, Senior Management and Employees-C. Board
Practices
  Liquidation Rights
 Redemption and Repurchase of Shares
 Calls on Shares and Forfeiture of Shares
 Modification of Rights of Shares
  73




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##### Table of Contents



Meetings of Shareholders
     Limitations on the Right to Own or to Vote Shares
  Anti-Takeover Provisions
   Disclosure of Share Ownership
  Change in Capital
  Amendment of Memorandum and Articles
  Differences in Corporate Law
  74




---



##### Table of Contents



Mergers and Schemes of Arrangement.
 
    
    a meeting of each relevant class of members or creditors has been convened pursuant
to an order of the court;
    
    a 75% majority of shareholders or creditors or the relevant class thereof has voted
in favor of the scheme; and
    
    court approval of the scheme has been obtained.
  
    
    the statutory provisions as to majority votes have been complied with;
    
    the shareholders or creditors have been fairly represented at the meeting in
question;
    
    the scheme is such as a businessman would reasonably approve; and
    
    the scheme is not one that would more properly be sanctioned under some other
provision of the Companies Law (2007 Revision) of the Cayman Islands.
   Shareholders Suits.
 C. Material Contracts
  D. Exchange Controls
 Item 4. Information on the CompanyB. Business Overview Government Regulation and Legal
Uncertainties Classified Regulations Foreign Exchange. Item 3. Key Information  Risk
Factors  Restrictions on paying dividends or making other payments to us bind our subsidiaries and
VIEs in China
 E. Taxation
  75




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##### Table of Contents



Cayman Islands Taxation
  United States Federal Income Taxation
   
    
    banks;
    
    financial institutions;
    
    insurance companies;
    
    broker dealers;
    
    traders that elect to mark to market;
    
    tax-exempt entities;
    
    persons liable for alternative minimum tax;
    
    persons holding common share as part of a straddle, hedging, conversion or integrated
transaction;
    
    persons that actually or constructively own 10% or more of our voting shares;
    
    persons holding ordinary shares through partnerships or other pass-through entities; or
    
    persons who acquired ordinary shares pursuant to the exercise of any employee share
option or otherwise as consideration.
   
    
    a citizen or individual resident of the U.S.;
    
    a corporation (or other entity taxable as a corporation for U.S. federal income tax
purposes) organized under the laws of the U.S., any State or the District of Columbia;
    
    an estate whose income is subject to U.S. federal income taxation regardless of its
source; or
    
    a trust that (1) is subject to the supervision of a court within the U.S. and the control
of one or more U.S. persons or (2) has a valid election in effect under applicable U.S.
Treasury regulations to be treated as a U.S. person.
 76




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##### Table of Contents



Taxation of Dividends and Other Distributions on the Ordinary Shares
     Taxation of Disposition of Shares
  Passive Foreign Investment Company
  77




---



##### Table of Contents




    
    at least 75% of its gross income is passive income (the income test), or
    
    at least 50% of the value of its assets (based on an average of the quarterly values of the
assets during a taxable year) is attributable to assets that produce or are held for the
production of passive income (the asset test).
    
    
    the excess distribution or gain will be allocated ratably over your holding period for the
ordinary shares,
    
    the amount allocated to the current taxable year, and any taxable year prior to the first
taxable year in which we became a PFIC, will be treated as ordinary income, and
    
    the amount allocated to each other taxable year will be subject to the highest tax rate in
effect for that taxable year and the interest charge generally applicable to underpayments of
tax will be imposed on the resulting tax attributable to each such taxable year.
   de minimis
 78




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##### Table of Contents



Information Reporting and Backup Withholding
   F. Dividends and Paying Agents
  G. Statement by Experts
  H. Documents on Display
  I. Subsidiary Information
 Item 4. Information on the Company  C. Organizational
Structure
 
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
 Interest Rate and Security Market Risk
   79




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##### Table of Contents



Foreign Currency Exchange Rate Risk
  TranslationChange in the value of
    
    adjustments to
    
    Transaction gainChinese renminbi against the
    
    comprehensive income
    
    (loss)U.S. dollar
    
    (in thousands)
    
    (in thousands)Appreciate 2%
    
    $
    8,775
    
    
    $
    (73
    )Appreciate 5%
    
    $
    21,972
    
    
    $
    (183
    )Depreciate 2%
    
    $
    (8,756
    )
    
    $
    73Depreciate 5%
    
    $
    (21,853
    )
    
    $
    183
 Investment Risk
 Investment in marketable debt securities
  
 Item 12. Description of Securities Other than Equity Securities
  
 PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  80




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##### Table of Contents



Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Managements Annual Report on Internal Control over Financial Reporting
 Internal Control-Integrated Framework
   Changes in Internal Control over Financial Reporting
  
 Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
  81




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##### Table of Contents



Item 16C. Principal Accountant Fees and Services
  2008
    
    2007Audit Fees
    
    $
    1,295,915
    
    
    $
    1,077,218Audit-Related Fees (1)
    
    
    
    
    
    
    102,547Tax Fees (2)
    
    
    30,551
    
    
    
    36,900All Other Fees (3)
    
    
    1,500
    
    
    
    1,500
 
 (1)
    
    Audit-Related Fees consist of fees billed for assurance and related services by our principal
auditors that are reasonably related to the performance of the audit or review of our
financial statements and are not reported under Audit fees.(2)
    
    Tax fees consist of fees billed for professional services related to tax advice and
assistance with tax reporting.(3)
    
    All Other Fees consist of $1,500 subscription fee for accounting rules and materials.  
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Change in Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
  
 PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
  82




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##### Table of Contents



ExhibitNumber
    
    Description1.1
    
    Amended and Restated Articles of Association of SINA Corporation (Filed as Exhibit 3.1 to the Companys
Annual Report on Form 10-K filed on March 16, 2005, and incorporated herein by reference).1.2
    
    Amended and Restated Memorandum of Association of SINA.com (currently known as SINA Corporation) (Filed as
Exhibit 3.1 to the Companys Annual Report on Form 10-K filed on March 16, 2005, and incorporated herein
by reference).2.1
    
    Form of Subordinated Note due July 15, 2023 (Filed as Exhibit 4.1 to the Companys Report on Form 10-Q for
the three month period ended June 30, 2003, and incorporated herein by reference).2.2
    
    Indenture, dated as of July 7, 2003, by and between the Company and the Bank of New York (Filed as Exhibit
4.2 to the Companys Report on Form 10-Q for the three month period ended June 30, 2003, and incorporated
herein by reference).2.3
    
    Registration Rights Agreement, dated as of July 7, 2003, by and between the Company and Credit Suisse
First Boston LLC (Filed as Exhibit 4.3 to the Companys Report on Form 10-Q for the three month period
ended June 30, 2003, and incorporated herein by reference).2.4
    
    Rights Agreement dated as of February 22, 2005 between SINA Corporation and American Stock Transfer &
Trust Company, as Rights Agent (Filed as Exhibit 4.1 to the Companys Report on Form 8-K filed on February
24, 2005, and incorporated herein by reference).4.1
    
    Form of Indemnification Agreement between SINA.com and each of its officers and directors (Filed as
Exhibit 10.1 to the Companys Registration Statement on Form F-1, Registration No. 333-11718, filed on
March 27, 2000, as amended, and incorporated herein by reference).4.2
    
    SRS International Ltd. 1997 Stock Option Plan and form of incentive stock option agreement (Filed as
Exhibit 10.2 to the Companys Registration Statement on Form F-1, Registration No. 333-11718, filed on
March 27, 2000, as amended, and incorporated herein by reference).4.3
    
    Sinanet.com 1997 Stock Plan and form of stock option agreement (Filed as Exhibit 10.3 to the Companys
Registration Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference).4.4
    
    Amended SINA.com 1999 Stock Plan and form of share option agreement (Filed as Exhibit 10.4 to the
Companys Registration Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000, as
amended, and incorporated herein by reference).4.5
    
    Form of share option agreement under the amended SINA.com 1999 Stock Plan (Filed as Exhibit 10.5 to the
Companys Annual Report on Form 10-K filed on March 16, 2005 and incorporated by reference herein).4.6
    
    1999 Directors Stock Option Plan (Filed as Exhibit 10.6 to the Companys Registration Statement on Form
F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and incorporated herein by
reference).4.7
    
    Form of nonstatutory stock option agreement under the 1999 Directors Stock Option Plan (Filed as Exhibit
10.6 to the Companys Registration Statement on Form F-1, Registration No. 333-11718, filed on March 27,
2000, as amended, and incorporated herein by reference).4.8
    
    SINA.com 1999 Executive Stock Plan (Filed as Exhibit 10.19 to the Companys Registration Statement on Form
F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and incorporated herein by
reference).4.9*
    
    Form Lease Agreement of Ideal International Plaza between the Registrants subsidiaries or VIEs and
Beijing Zhongwu Ideal Real Estate Development Co., Ltd. for the office located in Ideal International
Plaza, 58 North 4th Ring Road West, Haidian,, Beijing, PRC, and the list of the lease agreements.4.10
    
    Business Cooperation Agreement dated March 7, 2000 between Beijing SINA Internet Information Services Co.,
Ltd. and Beijing Stone Rich Sight Information Technology Co., Ltd. (currently known as Beijing SINA
Information Technology Co., Ltd.) (Filed as Exhibit 10.23 to the Companys Registration Statement on Form
F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and incorporated herein by
reference).4.11
    
    Equipment and Leased Line Transfer Agreement dated March 7, 2000 between Beijing SINA Internet Information
Services Co., Ltd. and Beijing Stone Rich Sight Information Technology Co., Ltd. (currently known as
Beijing SINA Information Technology Co., Ltd.) (Filed as Exhibit 10.23 to the Companys Registration
Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and incorporated
herein by reference).
 83




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##### Table of Contents



ExhibitNumber
    
    Description4.12
    
    Advertising Agency Agreement dated March 7, 2000 between Beijing SINA Internet Information Services Co.,
Ltd. and SINA.com (currently known as SINA Corporation) (Filed as Exhibit 10.26 to the Companys
Registration Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference).4.13
    
    Advertisement Production and Technical Service Agreement dated March 7, 2000 between Beijing Stone Rich
Sight Information Technology Co., Ltd. (currently known as Beijing SINA Information Technology Co., Ltd.)
and Beijing SINA Interactive Advertising Co. Ltd. (Filed as Exhibit 10.27 to the Companys Registration
Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and incorporated
herein by reference).4.14
    
    Advertising Publication and Cooperation Agreement dated March 7, 2000 between Beijing SINA Internet
Information Services Co., Ltd. and Beijing SINA Interactive Advertising Co., Ltd. (Filed as Exhibit 10.28
to the Companys Registration Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000,
as amended, and incorporated herein by reference).4.15
    
    Amendment to Advertising Agency Agreement dated April 1, 2000 between Beijing SINA Interactive Advertising
Co., Ltd. and SINA.com (currently known as SINA Corporation) (Filed as Exhibit 10.37 to the Companys
Registration Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference).4.16
    
    Amendment to Advertisement Publication and Cooperation Agreement dated April 1, 2000 between Beijing SINA
Interactive Advertising Co., Ltd. and Beijing SINA Internet Information Services Co., Ltd. (Filed as
Exhibit 10.38 to the Companys Registration Statement on Form F-1, Registration No. 333-11718, filed on
March 27, 2000, as amended, and incorporated herein by reference).4.17
    
    Amendment to Advertising Production and Technical Service Agreement dated April 1, 2000 between Beijing
Stone Rich Sight Information Technology Co., Ltd. (currently known as Beijing SINA Information Technology
Co., Ltd.) and Beijing SINA Interactive Advertising Co., Ltd. (Filed as Exhibit 10.39 to the Companys
Registration Statement on Form F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and
incorporated herein by reference).4.18
    
    E-Commerce Cooperation Agreement dated April 1, 2000 between Beijing Stone Rich Sight Information
Technology Co., Ltd. (currently known as Beijing SINA Information Technology Co., Ltd.) and Beijing SINA
Internet Information Services Co., Ltd (Filed as Exhibit 10.40 to the Companys Registration Statement on
Form F-1, Registration No. 333-11718, filed on March 27, 2000, as amended, and incorporated herein by
reference).4.19*
    
    Share Pledge Agreements (18 agreements in total) between SINA.com Technology (China) Co., Ltd. (a
subsidiary of the Company) and certain employees of the Company in relation to significant Variable
Interest Entities controlled by the Company.4.20*
    
    Loan Agreements (18 agreements in total) between Sina.com Technology (China) Co., Ltd (a subsidiary of the
Company) and certain employees of the Company for funding significant Variable Interest Entities
controlled by the Company.4.21*
    
    Agreements on Authorization to Exercise Shareholders Voting Power (18 agreements in total) between
Sina.com Technology (China) Co., Ltd (a subsidiary of the Company) and certain employees of the Company in
relation to significant Variable Interest Entities controlled by the Company.4.22*
    
    Translation of Technical Services Agreement dated January 1, 2008 between Beijing New Media Information
Technology Co., Ltd. and Guangzhou Media Message Technologies Inc.4.23*
    
    Translation of Internet Advertisement Publishing Technical Services Agreement dated January 1, 2008
between SINA.com Technology (China) Co., Ltd and Beijing SINA Internet Information Services Co., Ltd.4.24*
    
    Translation of Technical Services Agreement dated January 1, 2008 between Beijing New Media Information
Technology Co., Ltd. and Shenzhen Wang Xing Technology Co., Ltd.4.25*
    
    Translation of Mobile Value Added Technical Services Agreement dated January 1, 2008 between SINA.com
Technology (China) Co., Ltd. and Beijing SINA Internet Information Services Co., Ltd.4.26*
    
    Translation of Internet Advertisement Publishing Technical Services Agreement dated January 1, 2008
between SINA.com Technology (China) Co., Ltd. and Beijing SINA Infinity Advertising Co., Ltd.4.27
    
    Change of Control Agreement dated February 1, 2001 with Charles Chao (Filed as Exhibit 10.48 to the
Companys Report on Form 10-Q for the three month period ended March 31, 2001, and incorporated herein by
reference).4.28
    
    Employment Agreement dated July 31, 2006 between Charles Guowei Chao and SINA Corporation (Filed as
Exhibit 10.1 to the Companys Report on Form 10-Q for the three month period ended September 30, 2006, and
incorporated herein by reference).
 84




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##### Table of Contents



ExhibitNumber
    
    Description4.29
    
    Stock Purchase Agreement dated February 24, 2004, among SINA, Crillion, the shareholders of Crillion
listed on Part I of Exhibit A of the Stock Purchase Agreement and the individuals listed on Part II of
Exhibit A of the Stock Purchase Agreement (Filed as Exhibit 2.1 to the Companys Report on Form 8-K filed
on April 7, 2004, and incorporated herein by reference).4.30
    
    Amendment Agreement dated March 23, 2004, among SINA, Crillion, the shareholders of Crillion listed on
Part I of Exhibit A of the Stock Purchase Agreement and the individuals listed on Part II of Exhibit A of
the Stock Purchase Agreement (Filed as Exhibit 2.2 to the Companys Report on Form 8-K filed on April 7,
2004, and incorporated herein by reference).4.31
    
    Equity Transfer Agreement dated February 24, 2004, among the individuals listed on Schedule A attached to
the Equity Transfer Agreement, Shenzhen Wang Xing Technology Co., Ltd., a limited liability company
organized and existing under the laws of the Peoples Republic of China, and the individuals listed on
Schedule B attached to the Equity Transfer Agreement (Filed as Exhibit 2.3 to the Companys Report on Form
8-K filed on April 7, 2004, and incorporated herein by reference).4.32
    
    Stock Purchase Agreement dated July 1, 2004 among SINA Corporation, Davidhill Capital Inc., the
shareholders of Davidhill Capital Inc. listed on Part I of Exhibit A to such agreement, and the company
and individuals listed on Part II of Exhibit A to such agreement. (Filed as Exhibit 2.1 to the Companys
Report on Form 8-K filed on October 22, 2004, and incorporated herein by reference).4.33
    
    Amendment Agreement dated October 13, 2004 among SINA Corporation, Davidhill Capital Inc., the
shareholders of Davidhill Capital Inc. listed on Part I of Exhibit A to the Stock Purchase Agreement, and
the company and individuals listed on Part II of Exhibit A to the Stock Purchase Agreement. (Filed as
Exhibit 2.2 to the Companys Report on Form 8-K filed on October 22, 2004, and incorporated herein by
reference).4.34
    
    Asset Purchase Agreement dated July 1, 2004 by and between Guiyang Longmaster Information Technology Co.,
Ltd. and Beijing Davidhill Internet Technology Service Co., Ltd. (Filed as Exhibit 2.3 to the Companys
Report on Form 8-K filed on October 22, 2004, and incorporated herein by reference).4.35
    
    2007 Share Incentive Plan (Filed as Exhibit 4.2 to the Companys Report on Form S-8 filed on July 26,
2007, and incorporated herein by reference).4.36
    
    Form of share option agreement for non-employee directors under the 2007 Share Incentive Plan (Filed as
Exhibit 4.44 to the Companys Report on Form 20-F filed on June 30, 2008, and incorporated herein by
reference).4.37
    
    Form of restricted share unit agreement for existing service providers under the 2007 Share Incentive Plan
(Filed as Exhibit 4.45 to the Companys Report on Form 20-F filed on June 30, 2008, and incorporated
herein by reference).4.38
    
    Form of performance restricted share unit agreement under the 2007 Share Incentive Plan (Filed as Exhibit
4.46 to the Companys Report on Form 20-F filed on June 30, 2008, and incorporated herein by reference).4.39
    
    Form of share option agreement for existing service providers under the 2007 Share Incentive Plan (Filed
as Exhibit 4.47 to the Companys Report on Form 20-F filed on June 30, 2008, and incorporated herein by
reference).4.40*
    
    Form of restricted share unit agreement for existing service providers under the 2007 Share Incentive Plan.4.41*
    
    Form of restricted share unit agreement for existing service providers under the 2007 Share Incentive Plan.4.42*
    
    Asset Purchase Agreement dated as of December 22, 2008 by and between Focus Media Holding Limited and the
Company.8.1*
    
    List of Subsidiaries.12.1*
    
    Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a)
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.12.2*
    
    Certificate of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a)
as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.13.1*
    
    Certificate of Chief Executive Officer pursuant to 18 U.S.C. section 1350.13.2*
    
    Certificate of Chief Financial Officer pursuant to 18 U.S.C. section 1350.15.1*
    
    Consent of Independent Registered Public Accounting Firm.15.2*
    
    Consent of Jun He Law offices.
 
 *
    
    Filed herewith.
    
    Confidential treatment requested for certain portions of this Exhibit pursuant to Rule 24b-2
promulgated under the Securities Exchange Act, which portions are omitted and filed separately
with the Securities and Exchange Commission. 85




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##### Table of Contents



SIGNATURES
  SINA CorporationBy:
    /S/ Charles ChaoCharles ChaoDate: June 29, 2009
    
    President and Chief Executive Officer 86




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageConsolidated Financial Statements:Report of Independent Registered Public Accounting Firm
    
    F-88Consolidated Balance Sheets at December 31, 2008 and 2007
    
    F-89Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006
    
    F-90Consolidated Statements of Shareholders Equity for the years ended December 31, 2008, 2007 and 2006
    
    F-91Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006
    
    F-92Notes to Consolidated Financial Statements
    
    F-93
 87




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
      PricewaterhouseCoopers Zhong Tian CPAs Limited Company
  
 88




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##### Table of Contents



SINA CORPORATION
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except per share data)
 December 31,2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    383,320
    
    
    $
    271,666Short-term investments
    
    
    220,504
    
    
    
    206,333Accounts receivable, net of allowances for doubtful accounts of $9,146 and $5,663, respectively
    
    
    79,183
    
    
    
    56,719Prepaid expenses and other current assets
    
    
    9,424
    
    
    
    8,840Total current assets
    
    
    692,431
    
    
    
    543,558Property and equipment, net
    
    
    34,111
    
    
    
    26,846Equity investments
    
    
    
    
    
    
    1,300Intangible assets, net
    
    
    10,477
    
    
    
    6,695Goodwill
    
    
    84,050
    
    
    
    82,663Other assets
    
    
    1,425
    
    
    
    1,201Total assets
    
    $
    822,494
    
    
    $
    662,263LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,397
    
    
    $
    940Accrued liabilities
    
    
    68,468
    
    
    
    49,488Income taxes payable
    
    
    17,391
    
    
    
    9,079Deferred revenue
    
    
    7,651
    
    
    
    7,443Convertible debt
    
    
    99,000
    
    
    
    99,000Total current liabilities
    
    
    193,907
    
    
    
    165,950Long-term liabilities:Other liabilities
    
    
    4,039
    
    
    
    1,337Total liabilities
    
    
    197,946
    
    
    
    167,287Commitments and contingencies (Note 18)Minority interests
    
    
    4,043
    
    
    
    Shareholders equity:Ordinary Shares: $0.133 par value; 150,000 shares authorized; 56,121 and 55,521 shares issued
and outstanding
    
    
    7,464
    
    
    
    7,384Additional paid-in capital
    
    
    357,109
    
    
    
    332,461Retained earnings
    
    
    204,340
    
    
    
    123,702Accumulated other comprehensive income (loss):Unrealized loss on investments in marketable securities
    
    
    (329
    )
    
    
    (920
    )Cumulative translation adjustments
    
    
    51,921
    
    
    
    32,349Total shareholders equity
    
    
    620,505
    
    
    
    494,976Total liabilities, minority interests and shareholders equity
    
    $
    822,494
    
    
    $
    662,263
  89




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##### Table of Contents



SINA CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 Years ended December 31,2008
    
    
    2007
    
    
    2006Net revenues:Advertising
    
    $
    258,499
    
    
    $
    168,926
    
    
    $
    120,067Non-advertising
    
    
    111,088
    
    
    
    77,201
    
    
    
    92,787369,587
    
    
    
    246,127
    
    
    
    212,854Costs of revenue:Advertising
    
    
    100,008
    
    
    
    63,466
    
    
    
    42,529Non-advertising
    
    
    50,327
    
    
    
    31,236
    
    
    
    36,881150,335
    
    
    
    94,702
    
    
    
    79,410Gross profit
    
    
    219,252
    
    
    
    151,425
    
    
    
    133,444Operating expenses:Sales and marketing
    
    
    79,784
    
    
    
    50,555
    
    
    
    49,972Product development
    
    
    30,371
    
    
    
    21,942
    
    
    
    19,573General and administrative
    
    
    33,179
    
    
    
    26,738
    
    
    
    27,172Amortization of intangible assets
    
    
    1,337
    
    
    
    1,176
    
    
    
    1,820Total operating expenses
    
    
    144,671
    
    
    
    100,411
    
    
    
    98,537Income from operations
    
    
    74,581
    
    
    
    51,014
    
    
    
    34,907Interest and other income, net
    
    
    18,270
    
    
    
    12,731
    
    
    
    8,549Amortization of convertible debt issuance cost
    
    
    
    
    
    
    (342
    )
    
    
    (685
    )Loss on investment in Tidetime Sun
    
    
    
    
    
    
    
    
    
    
    (147
    )Gain on sale of business and equity investments, net
    
    
    2,358
    
    
    
    830
    
    
    
    1,343Income before income taxes and minority interests
    
    
    95,209
    
    
    
    64,233
    
    
    
    43,967Income tax expenses
    
    
    (14,042
    )
    
    
    (6,504
    )
    
    
    (4,051
    )Income before minority interests
    
    
    81,167
    
    
    
    57,729
    
    
    
    39,916Minority interests
    
    
    (529
    )
    
    
    
    
    
    
    Net income
    
    $
    80,638
    
    
    $
    57,729
    
    
    $
    39,916Basic net income per share
    
    $
    1.44
    
    
    $
    1.05
    
    
    $
    0.74Diluted net income per share
    
    $
    1.33
    
    
    $
    0.97
    
    
    $
    0.69Shares used in computing basic income per share
    
    
    55,821
    
    
    
    55,038
    
    
    
    53,696Shares used in computing diluted income per share
    
    
    60,474
    
    
    
    60,020
    
    
    
    58,549
  90




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##### Table of Contents



SINA CORPORATION
 
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 (In thousands)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    TotalOrdinary Shares
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    EquityBalances at December 31, 2005
    
    
    53,265
    
    
    $
    7,084
    
    
    $
    284,559
    
    
    $
    26,057
    
    
    $
    1,922
    
    
    $
    319,622Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,916
    
    
    
    
    
    
    
    39,916Unrealized gain on marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    532
    
    
    
    532Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,290
    
    
    
    8,290Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,738Issuance of ordinary shares pursuant to
stock plans
    
    
    895
    
    
    
    119
    
    
    
    9,860
    
    
    
    
    
    
    
    
    
    
    
    9,979Stock-based compensation expenses
    
    
    
    
    
    
    
    
    
    
    9,474
    
    
    
    
    
    
    
    
    
    
    
    9,474Business acquisition
    
    
    184
    
    
    
    25
    
    
    
    (25
    )
    
    
    
    
    
    
    
    
    
    
    Balances at December 31, 2006
    
    
    54,344
    
    
    
    7,228
    
    
    
    303,868
    
    
    
    65,973
    
    
    
    10,744
    
    
    
    387,813Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57,729
    
    
    
    
    
    
    
    57,729Unrealized gain on marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,451
    
    
    
    1,451Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,234
    
    
    
    19,234Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,414Issuance of ordinary shares pursuant to
stock plans
    
    
    1,138
    
    
    
    151
    
    
    
    18,886
    
    
    
    
    
    
    
    
    
    
    
    19,037Stock-based compensation expenses
    
    
    
    
    
    
    
    
    
    
    8,712
    
    
    
    
    
    
    
    
    
    
    
    8,712Issuance of
ordinary shares pursuant to convertible bonds conversion
    
    
    39
    
    
    
    5
    
    
    
    995
    
    
    
    
    
    
    
    
    
    
    
    1,000Balances at December 31, 2007
    
    
    55,521
    
    
    
    7,384
    
    
    
    332,461
    
    
    
    123,702
    
    
    
    31,429
    
    
    
    494,976Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    80,638
    
    
    
    
    
    
    
    80,638Unrealized gain on marketable securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    591
    
    
    
    591Currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,572
    
    
    
    19,572Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,801Issuance of ordinary shares pursuant to
stock plans
    
    
    600
    
    
    
    80
    
    
    
    10,469
    
    
    
    
    
    
    
    
    
    
    
    10,549Stock-based compensation expenses
    
    
    
    
    
    
    
    
    
    
    14,309
    
    
    
    
    
    
    
    
    
    
    
    14,309Others
    
    
    
    
    
    
    
    
    
    
    (130
    )
    
    
    
    
    
    
    
    
    
    
    (130
    )Balances at December 31, 2008
    
    
    56,121
    
    
    $
    7,464
    
    
    $
    357,109
    
    
    $
    204,340
    
    
    $
    51,592
    
    
    $
    620,505
  91




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SINA CORPORATION
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 Years ended December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    80,638
    
    
    $
    57,729
    
    
    $
    39,916Adjustments to reconcile net income to net cash provided by operating activities:Depreciation
    
    
    16,002
    
    
    
    13,374
    
    
    
    9,892Stock-based compensation
    
    
    14,309
    
    
    
    8,712
    
    
    
    9,474Amortization of convertible debt issuance cost
    
    
    
    
    
    
    342
    
    
    
    685Amortization of intangible assets
    
    
    1,603
    
    
    
    1,176
    
    
    
    1,820Provision for allowance for doubtful accounts
    
    
    3,528
    
    
    
    5,294
    
    
    
    5,044Income attributable to minority interests
    
    
    529
    
    
    
    
    
    
    
    Deferred income taxes
    
    
    (56
    )
    
    
    474
    
    
    
    (350
    )Gain on sale of business and equity investments, net
    
    
    (2,358
    )
    
    
    (830
    )
    
    
    (1,343
    )Foreign exchange gains from liquidated subsidiaries
    
    
    (1,964
    )
    
    
    
    
    
    
    Loss on investment in Tidetime Sun
    
    
    
    
    
    
    
    
    
    
    147Loss on disposal of property and equipment
    
    
    53
    
    
    
    83
    
    
    
    17Changes in assets and liabilities (net of effect from business acquisition):Accounts receivable
    
    
    (21,903
    )
    
    
    (14,241
    )
    
    
    (14,791
    )Prepaid expenses and other current assets
    
    
    65
    
    
    
    2,003
    
    
    
    (490
    )Other assets
    
    
    24
    
    
    
    77
    
    
    
    1,429Accounts payable
    
    
    62
    
    
    
    (58
    )
    
    
    (1
    )Accrued liabilities
    
    
    14,646
    
    
    
    9,140
    
    
    
    11,171Income taxes payable
    
    
    8,614
    
    
    
    2,504
    
    
    
    2,922Deferred revenue
    
    
    208
    
    
    
    3,286
    
    
    
    (2,445
    )Net cash provided by operating activities
    
    
    114,000
    
    
    
    89,065
    
    
    
    63,097Cash flows from investing activities, net of effect from business acquisition:Purchases of short-term investments
    
    
    (154,036
    )
    
    
    (98,792
    )
    
    
    (102,135
    )Maturities of short-term investments
    
    
    150,885
    
    
    
    104,354
    
    
    
    120,121Purchases of property and equipment
    
    
    (18,790
    )
    
    
    (12,158
    )
    
    
    (14,090
    )Cash paid for acquisitions, net of cash acquired, and equity investments
    
    
    (2,019
    )
    
    
    (1,261
    )
    
    
    (11,266
    )Proceeds from sale of business and investments, net
    
    
    
    
    
    
    2,000
    
    
    
    6,520Net cash used in investing activities
    
    
    (23,960
    )
    
    
    (5,857
    )
    
    
    (850
    )Cash flows from financing activities:Proceeds from minority shareholder
    
    
    2,500
    
    
    
    
    
    
    
    Proceeds from issuance of ordinary shares
    
    
    10,549
    
    
    
    19,037
    
    
    
    9,979Other financing activities
    
    
    (642
    )
    
    
    
    
    
    
    Net cash provided by financing activities
    
    
    12,407
    
    
    
    19,037
    
    
    
    9,979Effect of exchange rate change on cash and cash equivalents
    
    
    9,207
    
    
    
    6,244
    
    
    
    2,541Net increase in cash and cash equivalents
    
    
    111,654
    
    
    
    108,489
    
    
    
    74,767Cash and cash equivalents at the beginning of the year
    
    
    271,666
    
    
    
    163,177
    
    
    
    88,410Cash and cash equivalents at the end of the year
    
    $
    383,320
    
    
    $
    271,666
    
    
    $
    163,177Supplemental disclosures:Cash paid for income taxes
    
    $
    5,270
    
    
    $
    3,634
    
    
    $
    1,294Cash paid for acquisitions
    
    $
    (3,663
    )
    
    $
    
    
    
    $
    (11,266
    )Cash acquired
    
    
    1,644
    
    
    
    
    
    
    
    Cash paid for acquisitions, net of cash acquired
    
    $
    (2,019
    )
    
    $
    
    
    
    $
    (11,266
    )Supplemental disclosures of noncash investing and financing activities:Ordinary shares issued pursuance to convertible bond conversion
    
    $
    
    
    
    $
    1,000
    
    
    $
    Increase in equity investment from deposit on equity investment
    
    $
    
    
    
    $
    
    
    
    $
    800
  92




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SINA CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Operations
   2. Significant Accounting Policies
 Basis of presentation and use of estimates
  Consolidation
   93




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##### Table of Contents




    
    Beijing SINA Internet Information Service Co., Ltd. (the ICP Company), a China company
controlled through business agreement. The ICP Company is responsible for operating
www.sina.com.cn in connection with its Internet content company license, selling the
advertisements to advertisers and providing MVAS with its Value-Added Telecommunication
Services Operating License in China via third-party operators to the users. It is 1.5% owned
by Yan Wang, the Companys Chairman of the Board, 22.50% owned by the Companys executive
officer Tong Chen, 26.75% owned by the Companys executive officer Hong Du, and 49.25% owned
by two other non-executive PRC employees of the Company. The registered capital of the ICP
Company is $2.5 million.
    
    Guangzhou Media Message Technologies, Inc. (Xunlong), a China company controlled
through business agreement. Xunlong is responsible for providing MVAS in China via
third-party operators to the users under its Value-Added Telecommunication Services
Operating License. It is owned by two non-executive PRC employees of the Company. The
registered capital of the Xunlong is $1.2 million.
    
    Beijing Star-Village Online Cultural Development Co., Ltd. (StarVI), previously
translated as Beijing Star-Village.com Cultural Development Co., Ltd, a China company
controlled through business agreement. StarVI is responsible for providing MVAS in China via
third-party operators to the users under its Value-Added Telecommunication Services
Operating License. It is owned by three non-executive PRC employees of the Company. The
registered capital of the StarVI is $1.2 million.
    
    Shenzhen Wang Xing Technology Co., Ltd. (Wangxing), a China company controlled through
business agreement. Wangxing is responsible for providing MVAS in China via third-party
operators to the users under its Value-Added Telecommunication Services Operating License.
It is owned by three non-executive PRC employees of the Company. The registered capital of
Wangxing is $1.2 million.
    
    Beijing SINA Infinity Advertising Co., Ltd. (the IAD Company), a China company
controlled through business agreement. The IAD Company is an advertising agency. It is 20%
owned by the Companys executive officer Tong Chen and 80% owned by four non-executive PRC
employees of the Company. This entity has an approved business scope including design,
production, agency and issuance of advertisements. The registered capital of the IAD Company
is $0.1 million.
    
    Beijing Yisheng Leju Information Services Co., Ltd. (Beijing Leju), a China company
controlled by us through a series of contractual arrangements. Beijing Leju is an
advertising agency and is responsible for selling advertisement of real-estate and home
decoration channels. It is owned by two non-executive PRC employees of the Company. This
entity has an approved business scope including agency and issuance of advertisements. The
registered capital of Beijing Leju is $0.1 million.
   Cash equivalents
  Available-for-sale securities
  94




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Allowances for doubtful accounts
  Long-lived assets
 Property and equipment.
  Goodwill.
 Intangible assets other than goodwill.
  Equity investments
   95




---



##### Table of Contents



Convertible debt
  Revenue recognition
 Advertising
    Non-advertising
 MVAS
   96




---



##### Table of Contents



Fee-based services.
 E-commerce.
 Enterprise services.
   Costs of revenues
 Advertising
  97




---



##### Table of Contents



Non-advertising
  Product development expenses
  Advertising expenses
  Stock-based compensation
      98




---



##### Table of Contents



Shareholders Equity
 Operating leases
  Income taxes
    Foreign currency
   Net income per share
  99




---



##### Table of Contents



Comprehensive income
  Recent accounting pronouncements
       100




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##### Table of Contents



3. Minority Interests
   4. Goodwill and Intangible Assets
  Advertising
    
    
    MVAS
    
    
    Total(In thousands)Balances at December 31, 2006
    
    $
    13,772
    
    
    $
    68,891
    
    
    $
    82,663Balances at December 31, 2007
    
    $
    13,772
    
    
    $
    68,891
    
    
    $
    82,663Additional interest in a majority-owned investment
    
    
    1,387
    
    
    
    
    
    
    
    1,387Balances at December 31, 2008
    
    $
    15,159
    
    
    $
    68,891
    
    
    $
    84,050
  101




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December 31, 2008
    
    
    December 31, 2007Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    
    amortization
    
    
    Net
    
    
    Cost
    
    
    amortization
    
    
    Net(In thousands)Technology
    
    $
    10,300
    
    
    $
    (4,635
    )
    
    $
    5,665
    
    
    $
    10,300
    
    
    $
    (3,605
    )
    
    $
    6,695Database
    
    
    3,541
    
    
    
    (266
    )
    
    
    3,275
    
    
    
    
    
    
    
    
    
    
    
    Software
    
    
    1,844
    
    
    
    (307
    )
    
    
    1,537
    
    
    
    
    
    
    
    
    
    
    
    Non-compete agreements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,147
    
    
    
    (3,147
    )
    
    
    Total
    
    $
    15,685
    
    
    $
    (5,208
    )
    
    $
    10,477
    
    
    $
    13,447
    
    
    $
    (6,752
    )
    
    $
    6,695
   Fiscal year
    
    (In thousands)2009
    
    $
    1,9982010
    
    
    1,9982011
    
    
    1,6932012
    
    
    1,3842013
    
    
    1,384Thereafter
    
    
    2,020Total expected amortization expense
    
    $
    10,477
 5. Investment in Tidetime Sun
  6. Equity Investments
  Shanghai NC-SINA
    
    
    Others
    
    
    Total(In thousands)Balances at December 31, 2005
    
    $
    1,417
    
    
    $
    1,844
    
    
    $
    3,261Investment
    
    
    
    
    
    
    800
    
    
    
    800Share of loss of equity investments
    
    
    (108
    )
    
    
    (582
    )
    
    
    (690
    )Sale of equity investments
    
    
    (1,309
    )
    
    
    (892
    )
    
    
    (2,201
    )Balances at December 31, 2006
    
    
    
    
    
    
    1,170
    
    
    
    1,170Investment
    
    
    
    
    
    
    1,300
    
    
    
    1,300Sale of equity investments
    
    
    
    
    
    
    (1,170
    )
    
    
    (1,170
    )Balance at December 31, 2007
    
    
    
    
    
    
    1,300
    
    
    
    1,300Converted to controlling interest
    
    
    
    
    
    
    (1,300
    )
    
    
    (1,300
    )Balance at December 31, 2008
    
    $
    
    
    
    $
    
    
    
    $
    
  102




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7. Cash, Cash Equivalents and Short-term Investments
  As of December 31, 2008
    
    
    As of December 31, 2007Unrealized
    
    
    Estimated fair
    
    
    
    
    
    
    Unrealized
    
    
    Estimated fairCarrying value
    
    
    losses
    
    
    value
    
    
    Carrying value
    
    
    losses
    
    
    value(In thousands)Cash and cash equivalents:Cash
    
    $
    196,548
    
    
    $
    
    
    
    $
    196,548
    
    
    $
    147,724
    
    
    $
    
    
    
    $
    147,724Cash equivalents:Bank time deposits
    
    
    56,617
    
    
    
    
    
    
    
    56,617
    
    
    
    30,433
    
    
    
    
    
    
    
    30,433Money market funds
    
    
    130,155
    
    
    
    
    
    
    
    130,155
    
    
    
    93,509
    
    
    
    
    
    
    
    93,509186,772
    
    
    
    
    
    
    
    186,772
    
    
    
    123,942
    
    
    
    
    
    
    
    123,942383,320
    
    
    
    
    
    
    
    383,320
    
    
    
    271,666
    
    
    
    
    
    
    
    271,666Short-term investments:Bank time deposits
    
    
    205,609
    
    
    
    
    
    
    
    205,609
    
    
    
    165,872
    
    
    
    
    
    
    
    165,872U.S. Treasury and federal agency bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,080
    
    
    
    (397
    )
    
    
    15,683Corporate bonds and notes
    
    
    15,224
    
    
    
    (329
    )
    
    
    14,895
    
    
    
    20,328
    
    
    
    (138
    )
    
    
    20,190Floating rate notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,973
    
    
    
    (385
    )
    
    
    4,588220,833
    
    
    
    (329
    )
    
    
    220,504
    
    
    
    207,253
    
    
    
    (920
    )
    
    
    206,333Total cash, cash equivalents and
short-term investments
    
    $
    604,153
    
    
    $
    (329
    )
    
    $
    603,824
    
    
    $
    478,919
    
    
    $
    (920
    )
    
    $
    477,999
   Less than 12 months
    
    TotalGross
    
    
    
    
    
    GrossEstimated
    
    unrealized
    
    Estimated
    
    unrealizedfair value
    
    losses
    
    fair value
    
    losses(In thousands)Corporate bonds and notes
    
    $
    14,895
    
    
    $
    (329
    )
    
    $
    14,895
    
    
    $
    (329
    )
  103




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##### Table of Contents



GrossEstimated
    
    
    unrealizedfair value
    
    
    losses(In thousands)Due within one year
    
    $
    210,839
    
    
    $
    6Due after five years
    
    
    9,665
    
    
    
    (335
    )$
    220,504
    
    
    $
    (329
    )
 8. Balance Sheet Components
 December 31,2008
    
    
    2007(In thousands)Accounts receivable, net:Accounts receivable
    
    $
    88,329
    
    
    $
    62,382Allowance for doubtful accounts:Balance at beginning of year
    
    
    (5,663
    )
    
    
    (4,471
    )Additional provision charged to expenses
    
    
    (3,528
    )
    
    
    (5,294
    )Write-off, net of recoveries
    
    
    45
    
    
    
    4,102Balance at end of year
    
    
    (9,146
    )
    
    
    (5,663
    )$
    79,183
    
    
    $
    56,719Prepaid expenses and other current assets:Content fees
    
    $
    4,034
    
    
    $
    3,906Rental and other deposits
    
    
    1,404
    
    
    
    1,092Others
    
    
    3,986
    
    
    
    3,842$
    9,424
    
    
    $
    8,840Property and equipment, net:Computers and equipment
    
    $
    76,253
    
    
    $
    57,826Leasehold improvements
    
    
    4,988
    
    
    
    3,805Furniture and fixtures
    
    
    3,821
    
    
    
    2,663Other
    
    
    1,571
    
    
    
    1,63786,633
    
    
    
    65,931Less: Accumulated depreciation and amortization
    
    
    (52,522
    )
    
    
    (39,085
    )$
    34,111
    
    
    $
    26,846Accrued liabilities:Accrued compensation and benefits
    
    $
    9,480
    
    
    $
    7,990Sales commission
    
    
    4,055
    
    
    
    2,407Business taxes payable
    
    
    5,835
    
    
    
    5,961Sales rebates
    
    
    10,305
    
    
    
    11,777Marketing expenses
    
    
    9,100
    
    
    
    4,641Professional fees
    
    
    5,144
    
    
    
    2,185Internet connection costs
    
    
    3,151
    
    
    
    1,160Content fees
    
    
    13,526
    
    
    
    8,403Others
    
    
    7,872
    
    
    
    4,964$
    68,468
    
    
    $
    49,488
 9. Related Party Transactions
   10. Income Taxes
  104




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##### Table of Contents



Years ended December 31,2008
    
    2007
    
    2006(In thousands, except percentage)Income before taxes and minority interests
    
    $
    95,209
    
    
    $
    64,233
    
    
    $
    43,967Loss from non China operations
    
    $
    (12,938
    )
    
    $
    (5,934
    )
    
    $
    (12,161
    )Income from China operations
    
    $
    108,147
    
    
    $
    70,167
    
    
    $
    56,128Income tax expenses applicable to China operations
    
    $
    14,042
    
    
    $
    6,504
    
    
    $
    4,051Effective tax rate for China operations
    
    
    13
    %
    
    
    9
    %
    
    
    7
    %
 Cayman Islands
  China
     105




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##### Table of Contents



Composition of income tax expenses for China operations
  Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Current tax provision
    
    $
    (14,098
    )
    
    $
    (6,030
    )
    
    $
    (4,401
    )Deferred tax provision
    
    
    56
    
    
    
    (474
    )
    
    
    350Income tax expenses
    
    $
    (14,042
    )
    
    $
    (6,504
    )
    
    $
    (4,051
    )
 Reconciliation of the differences between statutory tax rate and the effective tax rate for China
operations
  Years ended December 31,2008
    
    
    2007
    
    
    2006Statutory EIT rate
    
    
    25
    %
    
    
    33
    %
    
    
    33
    %Effect on
tax holiday, preferential tax rate and dividend tax on VIEs
undistributed earnings, net
    
    
    (13
    %)
    
    
    (29
    %)
    
    
    (32
    %)Permanent differences
    
    
    1
    %
    
    
    1
    %
    
    
    1
    %Change in valuation allowance
    
    
    
    
    
    
    4
    %
    
    
    5
    %Effective tax rate for China operations
    
    
    13
    %
    
    
    9
    %
    
    
    7
    %
   Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands, except per share amount)Tax holiday effect
    
    $
    16,146
    
    
    $
    20,734
    
    
    $
    18,323Basic net income per share effect
    
    $
    0.29
    
    
    $
    0.38
    
    
    $
    0.34Diluted net income per share effect
    
    $
    0.27
    
    
    $
    0.35
    
    
    $
    0.31
  December 31,2008
    
    
    2007
    
    
    2006(In thousands)Deferred tax assets:Net operating loss carryforwards (expiring through 2012)
    
    $
    669
    
    
    $
    1,021
    
    
    $
    1,774Allowances for doubtful accounts, accruals and other liabilities
    
    
    5,159
    
    
    
    4,168
    
    
    
    3,165Depreciation
    
    
    1,736
    
    
    
    2,828
    
    
    
    1,620Total deferred tax assets
    
    
    7,564
    
    
    
    8,017
    
    
    
    6,559Less: valuation allowance
    
    
    (6,252
    )
    
    
    (6,761
    )
    
    
    (4,829
    )Net deferred tax assets
    
    $
    1,312
    
    
    $
    1,256
    
    
    $
    1,730
  106




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U.S.
   December 31,2008
    
    
    2007
    
    
    2006(In thousands)Deferred tax assets:Net operating loss carryforwards
    
    $
    30,013
    
    
    $
    29,282
    
    
    $
    28,461Other tax credits, allowances for doubtful accounts, accruals and other liabilities
    
    
    425
    
    
    
    441
    
    
    
    445Total deferred tax assets
    
    
    30,438
    
    
    
    29,723
    
    
    
    28,906Less: valuation allowance
    
    
    (30,438
    )
    
    
    (29,723
    )
    
    
    (28,906
    )Deferred tax assets
    
    $
    
    
    
    $
    
    
    
    $
    
 Hong Kong
   December 31,2008
    
    
    2007
    
    
    2006(In thousands)Deferred tax assets:Net operating loss carryforwards
    
    $
    2,360
    
    
    $
    2,130
    
    
    $
    2,290Less: valuation allowance
    
    
    (2,360
    )
    
    
    (2,130
    )
    
    
    (2,290
    )Deferred tax assets
    
    $
    
    
    
    $
    
    
    
    $
    
 Aggregate net deferred tax assets
 107




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##### Table of Contents



December 31,2008
    
    
    2007
    
    
    2006(In thousands)Net deferred tax assets included in other current assets and other assets:Net operating loss carryforwards
    
    $
    33,042
    
    
    $
    32,433
    
    
    $
    32,525Allowances for doubtful accounts, accruals and other liabilities
    
    
    5,238
    
    
    
    4,263
    
    
    
    3,264Depreciation
    
    
    1,736
    
    
    
    2,828
    
    
    
    1,620Other tax credits
    
    
    346
    
    
    
    346
    
    
    
    346Total deferred tax assets
    
    
    40,362
    
    
    
    39,870
    
    
    
    37,755Less: valuation allowance
    
    
    (39,050
    )
    
    
    (38,614
    )
    
    
    (36,025
    )Net deferred tax assets
    
    $
    1,312
    
    
    $
    1,256
    
    
    $
    1,730
 Movement of valuation allowances for deferred tax assets
  Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands)Balance at beginning of the year
    
    $
    38,614
    
    
    $
    36,025
    
    
    $
    32,555Provision for the year
    
    
    436
    
    
    
    2,589
    
    
    
    3,470Balance at end of the year
    
    $
    39,050
    
    
    $
    38,614
    
    
    $
    36,025
 11. Net Income Per Share
   Years ended December 31,2008
    
    
    2007
    
    
    2006(In thousands, except per share amounts)Basic net income per share calculation:Numerator:Net income used in computing basic net income per share
    
    $
    80,638
    
    
    $
    57,729
    
    
    $
    39,916Denominator:Weighted average ordinary shares outstanding
    
    
    55,821
    
    
    
    55,038
    
    
    
    53,696Basic net income per share
    
    $
    1.44
    
    
    $
    1.05
    
    
    $
    0.74Diluted net income per share calculation:Numerator:Net income
    
    $
    80,638
    
    
    $
    57,729
    
    
    $
    39,916Amortization of convertible debt issuance cost
    
    
    
    
    
    
    342
    
    
    
    685Net income used in computing diluted net income per share
    
    $
    80,638
    
    
    $
    58,071
    
    
    $
    40,601Denominator:Weighted average ordinary shares outstanding
    
    
    55,821
    
    
    
    55,038
    
    
    
    53,696Weighted average ordinary shares equivalents:Stock options
    
    
    770
    
    
    
    1,114
    
    
    
    967Unvested restricted shares
    
    
    44
    
    
    
    
    
    
    
    Convertible debt
    
    
    3,839
    
    
    
    3,868
    
    
    
    3,877Others
    
    
    
    
    
    
    
    
    
    
    9Shares used in computing diluted net income per share
    
    
    60,474
    
    
    
    60,020
    
    
    
    58,549Diluted net income per share
    
    $
    1.33
    
    
    $
    0.97
    
    
    $
    0.69
  108




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12. Employee Benefit Plans
 China Contribution Plan
  4 01(k) Savings Plan
  13. Profit Appropriation
   14. Shareholders Equity
 Stockholder Rights Plan
   109




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##### Table of Contents



2007 Share Incentive Plan
  1999 Stock Plan
   1999 Executive Stock Option Plan
  1999 Directors Stock Option Plan
 110




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##### Table of Contents



Compensation Costs
  Years ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Costs of revenues
    
    $
    3,248
    
    
    $
    1,788
    
    
    $
    1,743Sales and marketing
    
    
    2,098
    
    
    
    1,234
    
    
    
    1,511Product development
    
    
    1,978
    
    
    
    1,593
    
    
    
    1,808General and administrative
    
    
    6,943
    
    
    
    4,097
    
    
    
    4,412$
    14,267
    
    
    $
    8,712
    
    
    $
    9,474
  Valuation of Stock Options
  Years ended December 31,2008
    
    2007
    
    2006Stock options:Expected term (in years)
    
    
    4.0
    
    
    
    4.0
    
    
    
    3.8-5.0Expected volatility
    
    
    46% -50%
    
    
    
    50
    %
    
    
    68%-71%Risk-free interest rate
    
    
    2.0% - 2.7%
    
    
    
    3.2
    %
    
    
    5.0%-5.2%Expected dividend yield
    
    
    0
    
    
    
    0
    
    
    
    0
   Shares AvailableDecember 31, 2005
    
    
    2,681Granted
    
    
    (2,100
    )Cancelled/expired/forfeited
    
    
    722December 31, 2006
    
    
    1,303Increased authorization
    
    
    5,000Granted
    
    
    (434
    )Cancelled/expired/forfeited
    
    
    (1,300
    )December 31, 2007
    
    
    4,569Granted *
    
    
    (804
    )Cancelled/expired/forfeited
    
    
    86December 31, 2008
    
    
    3,851
 111




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##### Table of Contents



*
    
    In 2008, 676,000 options and 73,300 restricted shares units, or 128,275 equivalent shares,
were granted. Summary of Stock Option
  Weighted AverageOptions
    
    Weighted Average
    
    Remaining
    
    AggregateOutstanding
    
    Exercise Price
    
    Contractual Life
    
    Intrinsic Value(in thousands)
    
    
    
    
    
    (in years)
    
    (in thousands)December 31, 2005
    
    
    3,610
    
    
    $
    14.97Granted
    
    
    2,100
    
    
    $
    23.90Exercised
    
    
    (896
    )
    
    $
    11.14Cancelled/expired/forfeited
    
    
    (722
    )
    
    $
    11.84December 31, 2006
    
    
    4,092
    
    
    $
    20.95
    
    
    
    6.14
    
    
    $
    32,668Granted
    
    
    84
    
    
    $
    49.95Exercised
    
    
    (1,138
    )
    
    $
    16.73Cancelled/expired/forfeited
    
    
    (238
    )
    
    $
    22.31December 31, 2007
    
    
    2,800
    
    
    $
    23.41
    
    
    
    5.22
    
    
    $
    58,981Granted
    
    
    676
    
    
    $
    33.94Exercised
    
    
    (483
    )
    
    $
    21.82Cancelled/expired/forfeited
    
    
    (158
    )
    
    $
    29.61December 31, 2008
    
    
    2,835
    
    
    $
    25.85
    
    
    
    4.39
    
    
    $
    4,018Vested and expected to vest as of December 31, 2006
    
    
    3,898
    
    
    $
    20.82
    
    
    
    6.16
    
    
    $
    31,658Exercisable as of December 31, 2006
    
    
    1,882
    
    
    $
    18.56
    
    
    
    6.38
    
    
    $
    20,015Vested and expected to vest as of December 31, 2007
    
    
    2,711
    
    
    $
    23.32
    
    
    
    5.24
    
    
    $
    57,321Exercisable as of December 31, 2007
    
    
    1,561
    
    
    $
    21.86
    
    
    
    5.53
    
    
    $
    35,046Vested and expected to vest as of December 31, 2008
    
    
    2,736
    
    
    $
    25.63
    
    
    
    4.38
    
    
    $
    4,018Exercisable as of December 31, 2008
    
    
    1,785
    
    
    $
    23.45
    
    
    
    4.38
    
    
    $
    4,015
     Weighted
    
    
    
    
    
    Weighted
    
    Weighted AverageOptions
    
    Average
    
    Options
    
    Average
    
    RemainingRange of Exercise prices
    
    Outstanding
    
    Exercise Price
    
    Exercisable
    
    Exercise Price
    
    Contractual Life(in thousands)
    
    
    
    
    
    (in thousands)
    
    
    
    
    
    (in years)$0.5  $23.17
    
    
    1,049
    
    
    $
    19.33
    
    
    
    773
    
    
    $
    17.96
    
    
    
    3.87$24.23  $24.73
    
    
    863
    
    
    $
    24.62
    
    
    
    653
    
    
    $
    24.59
    
    
    
    4.03$25.57  $33.68
    
    
    743
    
    
    $
    32.49
    
    
    
    278
    
    
    $
    31.19
    
    
    
    5.32$36.40  $49.95
    
    
    180
    
    
    $
    42.31
    
    
    
    81
    
    
    $
    39.94
    
    
    
    5.372,835
    
    
    $
    25.85
    
    
    
    1,785
    
    
    $
    23.45
    
    
    
    4.39
 112




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Summary of Service-Based Restricted Share Units
  Shares Granted
    
    Weighted-Average Grant-Date(in thousands)
    
    Fair ValueDecember 31, 2006
    
    
    
    
    
    
    Awarded
    
    
    100
    
    
    $
    46.83December 31, 2007
    
    
    100
    
    
    $
    46.83Issued
    
    
    (25
    )
    
    $
    46.83December 31, 2008
    
    
    75
    
    
    $
    46.83
  Summary of Performance-Based Restricted Share Units
  Shares Granted
    
    Weighted-Average Grant-Date(in thousands)
    
    Fair ValueDecember 31, 2006
    
    
    
    
    
    
    Awarded
    
    
    100
    
    
    $
    46.83Forfeited
    
    
    (2
    )
    
    
    December 31, 2007
    
    
    98
    
    
    $
    46.83Awarded
    
    
    73
    
    
    $
    33.29Issued
    
    
    (91
    )
    
    $
    41.80Forfeited
    
    
    (12
    )
    
    $
    37.84December 31, 2008
    
    
    68
    
    
    $
    40.57
   15. Segment Information
  113




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Advertising
    
    MVAS
    
    Other
    
    Total(In thousands)Year ended and as of December 31, 2008:Net revenues
    
    $
    258,499
    
    
    $
    103,318
    
    
    $
    7,770
    
    
    $
    369,587Costs of revenues
    
    
    100,008
    
    
    
    48,005
    
    
    
    2,322
    
    
    
    150,335Gross profit margins
    
    
    61
    %
    
    
    54
    %
    
    
    70
    %
    
    
    59
    %Year ended and as of December 31, 2007:Net revenues
    
    $
    168,926
    
    
    $
    70,489
    
    
    $
    6,712
    
    
    $
    246,127Costs of revenues
    
    
    63,466
    
    
    
    29,339
    
    
    
    1,897
    
    
    
    94,702Gross profit margins
    
    
    62
    %
    
    
    58
    %
    
    
    72
    %
    
    
    62
    %Year ended and as of December 31, 2006:Net revenues
    
    $
    120,067
    
    
    $
    86,257
    
    
    $
    6,530
    
    
    $
    212,854Costs of revenues
    
    
    42,529
    
    
    
    34,255
    
    
    
    2,626
    
    
    
    79,410Gross profit margins
    
    
    65
    %
    
    
    60
    %
    
    
    60
    %
    
    
    63
    %
  China
    
    International
    
    Total(In thousands)Year ended and as of December 31, 2008:Revenues
    
    $
    365,959
    
    
    $
    3,628
    
    
    $
    369,587Long-lived assets
    
    
    33,005
    
    
    
    1,106
    
    
    
    34,111Year ended and as of December 31, 2007:Revenues
    
    $
    242,036
    
    
    $
    4,091
    
    
    $
    246,127Long-lived assets
    
    
    25,481
    
    
    
    1,365
    
    
    
    26,846Year ended and as of December 31, 2006:Revenues
    
    $
    209,200
    
    
    $
    3,654
    
    
    $
    212,854Long-lived assets
    
    
    25,726
    
    
    
    1,375
    
    
    
    27,101
  16. Financial Instruments
 Fair Value of Financial Instruments
 Fair Value Measurements at December 31, 2008Quoted Prices in Active Market
    
    
    Significant Otherfor Identical Assets
    
    
    Observable InputsTotal
    
    
    (Level 1)
    
    
    (Level 2)Money market funds (1)
    
    $
    130,155
    
    
    $
    130,155
    
    
    $
    Bank time deposits (2)
    
    
    262,226
    
    
    
    
    
    
    
    262,226Corporate bonds and notes (3)
    
    
    14,895
    
    
    
    
    
    
    
    14,895Total
    
    $
    407,276
    
    
    $
    130,155
    
    
    $
    277,121
 
 (1)
    
    Included in cash and cash equivalents on the Companys consolidated balance sheets.(2)
    
    Included in cash and cash equivalents and short-term investments on the Companys
consolidated balance sheets.(3)
    
    Included in short-term investments on the Companys consolidated balance sheets. Concentration of Risk
    114




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115




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17. Convertible Debt
   18. Commitments and Contingencies
  Less than one
    
    One to
    
    Three to
    
    More thanTotal
    
    year
    
    Three years
    
    five years
    
    five years(In thousands)Operating lease commitments
    
    $
    8,874
    
    
    $
    5,317
    
    
    $
    3,221
    
    
    $
    336
    
    
    $
    
  Less than one
    
    One to
    
    Three to
    
    More thanTotal
    
    year
    
    Three years
    
    Five years
    
    five years(In thousands)Purchase commitments
    
    $
    33,458
    
    
    $
    26,183
    
    
    $
    6,819
    
    
    $
    432
    
    
    $
    24
   116




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19. Subsequent Events
  117