Facebook Forges Links, Sina Shuffles; Facebook未弃中国梦 新浪或将一分为二
News involving a new China tie-up by Facebook (Nasdaq: FB) will undoubtedly reignite speculation that the social networking giant could finally enter the world’s biggest Internet market in 2013, fulfilling the long-stated goal of company founder Mark Zuckerberg. Meanwhile in other Internet news, leading web portal Sina (Nasdaq: SINA) is reportedly undergoing yet another new internal shuffle, foreshadowing major changes in store for one of China’s oldest online companies in 2013.
Both pieces of news are being driven in large part by the rapid rise of social networking sites (SNS) around the world, with Facebook a pioneer in the field and Sina cashing in on the trend through its wildly popular Weibo microblogging service, often called the Twitter of China. The news is also being driven by the rapid migration of many traditional Internet services to the mobile Internet, thanks to the rise of a new generation of sophisticated smartphones and high-speed telecoms networks that make mobile web surfing easy and affordable.
Let’s start off with Facebook, which is making its first China-related headlines in several months with word of a new advertising tie-up. (English article) Facebook’s global site is formally blocked in China, even though company founder Mark Zuckerberg has repeatedly said he wants to enter the market and has made several trips to the country to explore possible partnerships.
Despite the current blockage of its global site in China, this new tie-up is seeing Facebook partner with a Chinese advertising brokerage called PinYou Interactive Information Technology to look for Chinese companies that want to advertise on Facebook’s global sites. This kind of agreement isn’t all that uncommon, and indeed leading search engine Baidu (Nasdaq: BIDU) announced a similar tie-up earlier this year as it searches for European advertisers for its main China site.
Still, this kind of deal does seem to underscore Facebook’s determination to build up a China business, starting with the establishment of relationships with advertisers who would be key to its future development in the market. Facebook previously talked with a number of Chinese companies including Baidu about entering China through a partnership in 2011, but no agreements were ever reached.
Beijing would prefer that Facebook develop a local site in such a partnership rather than by itself, presumably to give the central government more control over such a site. Zuckerberg was too busy in 2012 with his company’s landmark IPO and the following tumble in its share price to pursue any major China initiatives. But with the IPO now behind him, look for the company to aggressively pursue more China initiatives in 2013, including the potential signing of a new partnership to enter the market with a new social networking site.
From Facebook, let’s move on quickly to Sina, which has been the source of non-stop reports in the last couple of months about various tie-ups and reorganizations as it tries to turn its popular Weibo microblogging service into a profitable business. The latest reports say Sina is undergoing an internal reorganization that will see the company divided into 2 main units, one focused on its older portal business and the other focused on its newer mobile SNS business anchored by Weibo. (English article) This news follows earlier reports that Sina chief Charles Chao was preparing to give his CEO title to another executive while retaining his other title as chairman, again hinting at a reorganization.
At the same time, rumors have repeatedly cropped up of talks for a deal that would see e-commerce leader Alibaba form a strategic tie-up with Sina Weibo, again in a bid to help Weibo become more commercial by offering e-commerce services to its more than 400 million users. (previous post) Look for the picture with Sina to become clearer in the first half of 2013, potentially ending the year with a formal split of the company into 2 pieces and the separate public listing of Sina Weibo in New York or Hong Kong.
Bottom line: A new move by Facebook indicates it will resume its push to open a China site in 2013, while Sina could formally split into 2 companies and separately list its Weibo unit by year-end.
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