Tag Archives: Weibo

When is a loss a good thing? In my opinion the answer should be “never,” but investors seem to be taking a different view based on the share price reaction for leading web portal Sina (Nasdaq: SINA) following release of its latest quarterly results. (results announcement) Frankly speaking, I don’t see why investors are getting so excited. Perhaps the results weren’t as bad as many had feared, and perhaps some are encouraged by the progress in monetizing Weibo, Sina’s wildly popular microblogging service that recently passed the 300 million user mark, with more than half of active subscribers accessing the service over mobile phones and tablet PCs. (Chinese article) Whatever the reason, Sina’s shares are up about 7 percent in after-hours trading, though that’s coming off the lowest levels the stock has seen in more than a year. Let’s take a look at the actual results for a better view of what to me looks like a weak quarter. Sina took a rare swing into the red in the first 3 months of the year, reporting a $13.7 million loss versus a $15 million profit a year earlier. But most worrisome was the fact that Sina also reported an even rarer operating loss of $18.1 million for the quarter. Equally worrisome in the latest results were the sharp slowdown in advertising, one of Sina’s main revenue sources, which grew just 9 percent. Other reports point out the advertising slowdown was already a known factor, and that the company’s net loss for the quarter was actually slightly better than analyst forecasts, which could account for the optimistic reaction to the company’s share price. Furthermore, the company also forecast that its advertising revenue growth should rebound slightly in the current quarter meaning it doesn’t see the situation deteriorating in the next few months. From a broader perspective, I said last week that I liked Sina’s plans to roll out a points rating system for Weibo that would allow users to judge each others’ credibility, which seemed like a good proactive move to address Beijing’s concerns about the spreading of false rumors on the microblogging site. (previous post) That kind of action will be especially important as Sina tries to turn Weibo into a profit engine, since the company seems to be taking a lax attitude towards implementing a real-name registration requirement for the service mandated by Beijing. In fact, the regulatory risk factor probably remains the biggest danger for Sina going forward, as Beijing could theoretically order Sina at any time to immediately close all accounts that haven’t registered by their real names, which I would expect is at least half of the 300 million users. All that said, look for a mild rebound in Sina shares over the next few weeks on this latest report, though that could easily change if any new negative sounds come out of the government in Beijing.

Bottom line: A jump for Sina shares based on its latest results is probably due to relief that the numbers weren’t worse than expected, with a modest rally likely in the next couple of months.

Related postings 相关文章:

◙ Sina Gets Proactive on Weibo 新浪微博的积极举措

◙ Sohu Disappoints Again, LDK Cuts Inspire 搜狐再次令人失望，江西赛维裁员鼓舞人心

◙ China’s Microblog Crackdown Continues 中国继续加强微博管控 新浪或受冲击

Finally we’re seeing leading web portal operator Sina (Nasdaq: SINA) take some proactive measures to clean up its popular but controversial Weibo microblogging service, in a refreshing and much-needed change to its reactive approach of only taking action after Beijing’s steady stream of new restrictive policies. This is exactly the kind of approach Sina needs to be taking to convince Beijing that it can responsibly manage this wildly popular Twitter-like service, and also to give its own users a valuable new tool to help them distinguish truth from the many fictitious rumors that frequently circulate on the site. Let’s look at the actual news, which has domestic media reporting that Sina will roll out a points rating system for Weibo users to help everyone judge the credibility of other users on the site. (English article) Everyone will start off with a perfect rating of 100, and then people who consistently post false information or engage in other “bad behavior” will have points deducted. This kind of rating system is already a common tool on many web sites, especially e-commerce sites whose operators use such scores to help buyers determine which sellers are credible and likely to provide good customer service. Sina’s move comes a half year after Beijing first ordered microblogging sites to register all their users with their real names, a directive aimed at curbing the rampant rumor-mongering that now takes place on the site. (previous post) None of the microblogging sites have commented directly on how many of their users have provided their real names to date, even though Beijing initially set a March deadline for all users to register with their real names. Previous indications have said the number of people who have registered with their real names is relatively low, with reports in March saying Sina had registered just 60 percent of its more than 200 million users with their real names at that time. (previous post) I suspect that even that number was an exaggeration, and the number is probably less than 50 percent, though Beijing has yet to comment on what may happen next for all of those users who have yet to provide real names. This new point system may help to ease some of Beijing’s concerns, as people will be less likely to believe postings from people with lower scores, and thus equally unlikely to transfer those people’s Weibo postings. As a result, people with low scores will gradually be ignored by the broader microblogging community, helping to improve the overall quality of the messages on Weibo in general. I like this new system, and hope that Sina continues to refine it and take other proactive measures to provide a truly useful and credible service in this increasingly influential medium. Of course such improvement will also make the site more attractive to advertisers and paying customers, which will help when Sina eventually spins off Weibo into a separate publicly listed company.

Bottom line: Sina’s roll out of a point system for Weibo is a smart move that will ease Beijng’s rumor mongering concerns, and also improve quality of the microblogging community.

Related postings 相关文章:

◙ China’s Microblog Crackdown Continues 中国继续加强微博管控 新浪或受冲击

◙ New Crackdown Spotlights Social Networking Risk 新的打压凸显社交网络风险

◙ Real Name Registration: Burden or Not for Weibo? 实名制会否成为新浪微博的负担？