Tag Archives: Weibo

latest Financial News of Sina Weibo , by Doug Young, expert of Chinese Business (former Reuters journalist in China).
SINA Corp (NASDAQ:SINA) Business and Financial report

Sina Gets Serious on Weibo 新浪开始严肃对待微博

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After months of frustration for investors, Sina (Nasdaq: SINA) has finally laid out a detailed plan for how it will earn money from Weibo, with company executives forecasting the highly popular but unprofitable microblogging service will produce “meaningful” money by the second half of this year. Investors clearly liked what they heard, bidding up Sina’s shares by 12 percent in New York trading the day after CEO Charles Chao made his comments on a conference call to discuss Sina’s otherwise unimpressive fourth-quarter results. (English article; results announcement) I’ve had a glance at the plan, and it looks like a mixed bag of some things that are likely to work and some that probably won’t. In the first category, the most promising part is Sina’s plan to sign up enterprise customers and launch an ad display system on Weibo, which now boasts more than 250 million users. (English article) These 2 approaches look smart because they both target business customers, who are probably quite happy to pay big bucks for a chance to reach Weibo’s millions of users. Less interesting are Sina’s plans to roll out a growing number of paid services for Weibo users, including paid gaming services. In one of its few previously announced Weibo monetization initiatives, Sina said in January it would offer a premium version of Weibo for users who wanted to pay for extras like getting SMS mobile phone notifications when they received new posts to their accounts. (previous post) That announcement was greeted with mostly yawns, as everyone, myself included, knows it’s very difficult to get people to start paying for services that they’ve previous gotten for free — especially the big majority of Weibo users who are under 30 and don’t necessarily have lots of cash to spend. Of course, execution will be key in all of this, as it’s easy to say you’re going to target enterprise customers but not necessarily as easy to create products that those customers will want. Facebook has been quite successful at making this transition, though the road has been less smooth for Twitter, the global microblogging giant. In China the story is the same, with Baidu (Nasaq: BIDU) a clear leader at monetizing the huge traffic that flows through its search engine while local Facebook equivalent Renren (NYSE: RENN) has had more difficulty. Given Sina’s long history and relatively strong record at executing this kind of strategy, I would say its chances of making some significant money from Weibo by the end of this year are good. If that happens, I would look for an IPO of this high-profile unit as soon as mid-2013.

Bottom line: Sina’s plans to target corporate customers to monetize its Weibo service looks like a smart move, though plans to get money from ordinary users look more problematic.

Related postings 相关文章:

◙ Sina Tests Weibo Demand With Paid Offering 新浪试水微博增值收费服务

◙ Twitter Eyeing China? Twitter想进中国？

◙ Sina’s Weibo Suffers New Setback With Lawsuit 吉林市驻京办可能起诉新浪微博

Baidu’s Strong Growth Underwhelms 百度业绩持续强劲增长将投资者期望抬升过高

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When is 80 percent growth nothing to get excited about? When you’re Baidu (Nasdaq: BIDU), China’s leading search engine, whose latest earnings report featuring 82.5 percent revenue growth and a 77 percent jump in profit is being greeted largely with yawns from investors who have come to expect this kind of turbo-charged growth from China’s Internet star. (earnings announcement) Baidu’s outlook for the first quarter was equally upbeat, with the company forecasting revenue growth of about 75 percent for the current reporting period. Shareholders bid up Baidu stock by 2.5 percent after the report came out, a modest gain reflecting the fact that the results and the guidance were mostly in line with expectation. I’ve looked over the report and there’s really not much of note in there. The company continues to be a one-note story, with nearly all of its revenue coming from its core online advertising services, which were up 82 percent for the quarter. Growth in revenue per customer seems to be slowing, up just 5 percent from the previous quarter, perhaps reflecting the fatigue that customers are starting to feel at having Baidu continually squeeze them for more money. Of course, when your investors start to expect 80 percent growth from you each quarter, the biggest danger is that they will punish you when you start to post lower numbers, which is almost inevitable. Leading web portal Sina (Nasdaq: SINA) learned that lesson the hard way last year, when expectations for its incredibly popular Weibo microblogging site grew a bit too big, fueling a rapid rise in Sina’s shares, which then  tumbled almost as quickly after Weibo ran into some regulatory obstacles and also showed signs of inability to quickly make money. (previous post) I still think China’s online ad market is due for a rapid slowdown later this year when the country’s current Internet bubble starts to burst. On top of that, some rival search engines are starting to gain some traction against Baidu, including Sohu’s (Nasdaq: SOHU) Sogou and perhaps more importantly Tencent’s (HKEx: 700) Soso, which seems to be gaining more momentum lately. All things considered, I wouldn’t be surprised to see Baidu’s turbo-charged growth fade somewhat by the end of this year, falling to the 50 percent level or perhaps even lower. When that happens, look for investors to punish its stock much the way they did to Sina last year.

Bottom line: Baidu’s continued turbo-charged growth has set investor expectations unreasonably high, with a slowdown that will deal a hit to its stock likely by the end of the year.

Related postings 相关文章:

◙ Baidu Dreams of Brazil 百度试水巴西

◙ Sohu Fails to Inspire With Latest Results 搜狐最新财报缺乏利好激励

◙ Tencent Search: Baidu Beware? 腾讯搜搜成功关键依赖创新

Starbucks Raises Prices, But Who Cares? 没人会在意星巴克提价

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If someone raises the price for an already ridiculously overpriced Gucci handbag, will shoppers really care? That’s the big question for Starbucks (Nasdaq: SBUX), which is tempting the lower-end luxury lifestyle market with its first price hike in 5 years, challenging China’s growing ranks of yuppies to pay 1-3 yuan more for their favorite cup of daily coffee. (English article) From a price perspective, this looks like a relatively modest hike, amounting to a 5-10 percent increase for coffee that already cost as much or more than a full meal at many local eateries. What’s more, Chinese consumers are already accustomed to price increases in this range, as inflation in 2011 hit some of the highest levels seen in years. But the real question is: will consumers even care when they are already so obviously spending money on a product that is really an extraneous low-end luxury good one of whose main functions is simply to let consumers show off their yuppie status? All of that said, my answer to the question is a definitive “no”, and I see little or no impact to Starbucks sales from this price increase. In fact, I could even see the opposite happening, with even more consumers flocking to Starbucks for coffee in order to show the world that higher prices won’t deter them from pursuing the yuppie lifestyle that Starbucks represents. Such consumers may also appreciate the fact that Starbucks waited for inflation to cool before making its move, unlike most companies that already raised their prices last year at the height of the inflationary cycle. I also like the way that Starbucks announced the move, informing its customers first on the popular Weibo microblogging platform in an attempt to ease the mild shock that some may soon feel on learning the price of their coffee has risen. What all of this says more broadly is that people will be willing to pay a premium for luxury goods in general regardless of mild price changes, as the value they get from such goods contains many intangible elements that can’t really be measured by the cost of the good to start with. All that said, Starbucks also realizes it’s not exactly a Gucci or Louis Vuitton, and has taken a prudent approach to its increase by keeping it modest, waiting until broader inflation is showing signs of cooling and being as transparent about it to consumers as possible.

Bottom line: Starbucks’ new price hike is unlikely to deter customers from buying its pricey coffee, and could even bring it more business from China’s growing ranks of yuppies.

Related postings 相关文章:

◙ Starbucks Goes Downmarket in China Drive 星巴克在华开拓低端市场

◙ Disney Bets on China Thirst for Luxury 迪士尼押注中国名品市场

◙ Starbucks Wide Open for China Business with New JV 星巴克在云南建合资厂

Twitter Eyeing China? Twitter想进中国？

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The world was buzzing over the weekend with news from the world’s 2 biggest social networking sites, Facebook and Twitter, with implications not only for themselves but also the China market in different ways. Twitter’s move was the more interesting in that regard, as it announced a new policy that could let posts on its site be seen in some markets but not others — a move that could clearly make it more viable in places like China where many sensitive topics are officially banned for online discussion. (Chinese article) Meantime, the markets were also buzzing with word that Facebook could file for its highly anticipated IPO this week, news that got investors excited about China SNS sites, with shares of both Renren (NYSE: RENN) and Sina (Nasdaq: SINA), operator of the wildly popular Weibo service, both posting nice gains on Friday. But let’s return for a moment to Twitter, as that’s the news that has the biggest potential to shake-up China’s microblogging sphere now dominated by Weibo. Anyone who lives in China knows that both Twitter and Facebook have been blocked in the market since the spring of 2009, presumably because they operate offshore and thus aren’t subject to China’s strict self-censorship laws for all of its websites. Facebook has signaled a number of times it still intends to make a play for China (previous post), with founder Mark Zuckerberg visiting China about a year ago and saying he wants to visit again as clearly the market is a critical piece of any global Internet strategy. Twitter has been much quieter on the subject, without ever really saying what its future plans are for the market now dominated by Weibo, which has around 250 million users. This latest adjustment at Twitter looks clearly aimed at the China market, as it would ease Chinese regulators’ concerns about the service’s ability to keep unwanted posts from outside markets off the site. Still, I’m not totally convinced Twitter has its eye on China just yet, mostly because Weibo itself has struggled to make any money in the market, despite its incredible popularity. Furthermore, anyone who plays in China SNS will now have to deal with Beijing’s recently announced real-name registration system, which will not only put a big burden on the SNS services themselves but is likely to deter many web surfers who like to remain anonymous. On the whole, I suspect this move by Twitter may be designed to test the China waters and will be followed by a visit to Beijing to see what regulators think. If the reaction is positive, I wouldn’t be surprised to see Twitter taking some kind of modest initiative in China by the end of this year, though it will face a difficult road catching up to Weibo.

Bottom line: Twitter’s latest policy shift allowing market-specific content controls could signal it is considering a move into China, which could come by the end of this year.

Related postings 相关文章:

◙ Despite China Rebuff, Facebook Going Back for More Facebook明知山有虎，偏向虎山行

◙ Cleanup Resumes, Facebook Sniffs Out China Investors 在美上市的中国企业将继续面临“大清洗”

◙ Weibo Gets Confidence Vote From Digital Sky DST投资消息或提振新浪短期前景

Sina Tests Weibo Demand With Paid Offering 新浪试水微博增值收费服务

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A half year after spinning off its Weibo unit with an aim to earning profits from the wildly popular microblogging service, Sina (Nasdaq: SINA) is taking the first step to generating significant new revenues from the business by rolling out a new premium paid service. The strategy is certainly necessary if Sina ever wants to earn a profit from Weibo, and I even like the fact that it’s charging a very modest fee for the service, at least initially, which should help attract customers. But I’m still quite skeptical that the strategy will actually work, as it’s always hard to get people to pay for something they’ve grown accustomed to getting for free. Let’s backtrack a moment and look at the details of this latest development, which has Sina rolling out a service that will allow Weibo users to get the new premium service for the modest fee of 5 yuan a month or 50 yuan a year, translating to less than $1 per month. (English article) The new service will allow users to get SMS notifications for some of their incoming posts — an offering that doesn’t sound that interesting since many users already access Weibo over their mobile phones. In theory the new service could be a major revenue generator, since the company could generate more than 1 billion yuan in annual revenue if even just 10 percent of Weibo’s 250 million users signed up for the service. But as I said already, the bigger issue will be getting people to pay for a service that they’re used to getting for free. E-commerce leader Alibaba Group has found out that such a switch can indeed be difficult, as reflected by the lackluster performance of its Taobao online auctions service. That service made headlines 7 years ago when it ultimately drove global leader eBay (Nasdaq: EBAY) out of the China market by offering its services for free; but since then, Alibaba has had a difficult time making significant profits from the business, due in large part to the fact that users don’t want to pay for something they’ve always received for free. I suspect that Weibo will learn a similar lesson with this latest premium offering, and would advise Sina to look at other options in its drive to make the platform profitable, including developing entirely new services that can leverage Weibo’s large user base.

Bottom line: Weibo’s new premium service is likely to fail due to lack of interest from users who are accustomed to getting the service for free.

Related postings 相关文章:

◙ Sina’s Weibo Suffers New Setback With Lawsuit 吉林市驻京办可能起诉新浪微博

◙ Microblog Clampdown: Only Chapter 1? 实名制向网络行业吹去冷风

◙ Watch Out Weibo, Weixin Is Growing 新浪微博要小心腾讯微信要崛起

News Digest: January 20, 2012

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The following press releases and media reports about Chinese companies were carried on January 20. To view a full article or story, click on the link next to the headline.

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◙ Sina’s (Nasdaq: SINA) Weibo Microblog to Launch Paid Service (English article)

◙ China Auto First Chinese IPO Filer Since US Rule Change (English article)

◙ China Unicom (HKEx: 762) 3G Users Pass 40 Million Mark (Chinese article)

◙ TAL Education (NYSE: XRS) Announces Unaudited Results Fiscal Q3 Ended Nov 30 (PRNewswire)

◙ BesTV, CNTV Discuss Possible IPTV Joint Venture (English article)

Regulator Eyes Online Video in Ad Crackdown 广电总局或限制视频网站广告

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Chinese regulators seem to have discovered a sudden fondness for the Internet, first saddling many social networking sites with cumbersome “real name” rules and now potentially setting their sights on the fast-rising video-sharing sector. I doubt these 2 initiatives are related, but they both do reflect a worrisome surge in China’s classic heavy-handed approach to fast-rising new industries, which often ends up stunting their development or even killing them outright. In this latest news, Chinese media are reporting that an official at SARFT, the agency that regulates TV, has hinted that tough new requirements limiting the amount of ads that TV stations can show during their programs may also soon be extended to video sharing sites. (English article) The new requirements would come just months after many of China’s leading video sites, including Youku (NYSE: YOKU), Sohu (Nasdaq: SOHU) and Tudou (Nasdaq: TUDO) have signed a series of landmark agreements to offer legally licensed content as they wean themselves from the pirated material that has historically been a mainstay on such sites. (previous post) Thus the new requirements, if they come, would almost look like punishment for this positive development, when instead encouragement should be offered. This new requirement would follow the higher-profile move in December when Beijing issued new rules requiring all social networking sites (SNS) to register users using only their real names. (previous post) That rule dealt a blow to Sina (Nasdaq: SINA), whose wildly popular Weibo microblogging service looks set to become the biggest victim of that new policy. Frankly speaking, I’m not even really sure how dependent the online video sites are on advertising for their revenue, as some of the movies and TV shows offered under these new licensing agreements are on a pay-per-view basis that would see users paying to watch content. But regardless of the current situation, advertising is clearly a potential revenue source as these companies work toward sustained profitability, and any move by regulators to put sharp new limits on this activity could seriously hamper the industry’s development.

Bottom line: Potential new rules limiting ads for online video sites could seriously hamper the industry’s development, hurting their chances for sustained long-term profitability.

Related postings 相关文章:

◙ Tudou, Youku: China’s New Piracy Police　　土豆和优酷：中国打击盗版的民间警察

◙ Jishi the Latest in Low-Key Media Listing Parade 吉视传媒加入中国媒体低调上市大军

◙ Tudou Surprises With Profit, Licensing Deal 土豆网意外扭亏为盈视频分享市场的好兆头

Weibo Gets Confidence Vote From Digital Sky DST投资消息或提振新浪短期前景

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Sina (Nasdaq: SINA), China’s leading web portal whose shares have been battered lately, has received a rare piece of good news in the form of a potential major new investment for its controversial Twitter-like Weibo service from heavy-hitter Digital Sky Technologies (DST). (English article; Chinese article) There’s so much to say on this subject that I’m not sure where to start, so perhaps the best place would be with the actual news. Media are reporting that DST, an early investor in Facebook and which has taken a recent liking to the Chinese Internet, is in talks to pump around $200 million into Weibo via a convertible bond exercisable at $65 per Sina share. That price would have been a bargain just 7 months ago, when Sina shares were trading  as high as $140. But anyone who follows this company knows its stock has plummeted in recent months and now trades at around $55, following a string of big write-offs for its e-commerce and real estate services investments (previous post), and amid a broader confidence crisis towards US-listed China stocks after a recent series of accounting scandals. Further clouding the picture was Beijing’s announcement this month that all users of microblogging services would have to register using their real names, a move with strongly negative implications for Sina’s wildly popular Weibo service that boasts more than 250 million users and was one of the company’s few bright spots. (previous post) Clearly this new investment by DST will come as a vote of confidence in Weibo, in Sina’s sputtering campaign to monetize the recently spun-off service for a potential future IPO. But company watchers should also note that DST is hedging its bets by buying a convertible bond rather than making a direct investment. Furthermore, DST is hardly the best barometer for good China Internet investments, as it has made a wide range of such investments this year, often at overinflated valuations. DST’s recent string of China purchases include stakes in e-commerce firm 360Buy, also known as Jingdong Mall, and a recent purchase of a stake in Alibaba, China’s e-commerce leader. The company was also interested in previously buying a stake in Kaixin, one of China’s leading social networking services, and itself is part owned by leading Chinese Internet company Tencent (HKEx: 700) All that said, this latest investment may help to boost Sina and Weibo’s prospects in the very short term, but the longer-term picture for both still looks quite cloudy.

Bottom line: A potential $200 million investment in Sina’s Weibo microblogging service by DST should help to boost the company in the short term as it tries to shore up its battered image.

Related postings 相关文章:

◙ New Rule Hits Sina, Instant Messaging to Benefit? 微博实名重创新浪 即时信息服务有望受益

◙ Sina Results: Not So Diversified After All 新浪仍依赖广告,突围遇阻

◙ Digital Sky Looking for Piece of the China Pie 俄罗斯DST或与Facebook联手进军中国市场

Microblog Clampdown: Only Chapter 1? 实名制向网络行业吹去冷风

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A new rule requiring microbloggers to register using their real names continues to send chills through the online world, with a new report saying the campaign will soon be extended to other social media. The domestic media reports cite an unnamed government official in Beijing, which announced the initial rule late last week (previous post), saying more guidelines will follow requiring all sites to implement real-name registration throughout their various social networking sites to give operators like Sina (Nasdaq: SINA), Tencent (HKEx: 700) and Renren (NYSE: REN) quick and easy access to who is doing what and pass that information to government officials upon request. (English article) If China was looking to kill or severely stifle development of its fledgling but vibrant social media, this certainly looks like a good way to do it. The initial rule appeared to target microblogging sites, which would have dealt a blow to a limited number of companies, most notably Sina’s popular Weibo service. But this new expanded rule would potentially affect any and every kind of social media service, from microblogging to social networking services (SNS) operated by Renren and Kaixin and even instant messaging services like Tencent’s popular QQ. The traditional SNS services may be best positioned to weather this storm, as most encourage their users to register using their real names, whereas the big majority of microblogging and instant messaging users use Internet names that are often difficult or impossible to trace. But regardless of any of that, this expanded requirement will send a strong signal that anything and everything a person writes in any of these sites is being monitored by the government, discouraging many from using the services at all. In some ways, this latest crackdown looks similar to one 5 or 6 years ago on the then-vibrant text messaging services industry, a mainstay of Sina, Sohu and NetEase (Nasdaq: NTES) at that time. That crackdown effectively killed the industry in the years that followed. I doubt results of this crackdown will be as severe, but I would still look for activity on these social media sites to slow and even drop off sharply in the next year.

Bottom line: Beijing’s potential expansion of its real-name policy to all social media will send a chill through the industry and severely hamper its development.

Related postings 相关文章:

◙ New Rule Hits Sina, Instant Messaging to Benefit? 微博实名重创新浪 即时信息服务有望受益

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Weibo Still Faces Crackdown Despite Govt Tie-Up 新浪微博难改“被监管”命运

New Rule Hits Sina, Instant Messaging to Benefit? 微博实名重创新浪 即时信息服务有望受益

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The Internet world has been buzzing over the weekend about a new rule announced by the Beijing municipal government late last week requiring all microbloggers to use their real names. First off, I should applaud regulators for at least flagging this issue before making the actual move, as a high-ranking official said back in October that such a rule was being considered. (previous post) But that said, the new rule itself has left lots of people scratching their heads over what it all means. Clearly the big loser is Sina’s (Nasdaq: SINA) Weibo service, which stands to lose many of its more than 200 million users when the new rule is fully implemented. At least a few of my friends say they won’t keep using Weibo if they have to register with their real names, and I wouldn’t be surprised to see the service lose up to half of its active users by the time things settled down. Sina, which is already struggling after taking massive write-downs for its real estate and e-commerce investments (previous post), said it is still studying the new rules to figure out their impact. (company announcement) The news marks a major setback for Weibo, often called the Chinese equivalent of Twitter, which Sina was in the process of trying to monetize though progress was slow. This new rule may make Sina think twice about putting too much emphasis on Weibo, potentially killing plans for a separate IPO for this formerly promising business. In the meantime, one of my sources tells me the move by the Beijing city government is likely to be followed by other cities, meaning rival services from companies like NetEase (Nasdaq: NTES) will also be affected, though the impact should be limited since most of those have far fewer users than Weibo. What’s far less clear is how, if at all, instant messaging services, which have many microblogging-type characteristics, will be affected. I wrote about one of those in the mobile space last week, the Weixin service being developed by Tencent (HKEx: 700) (previous post), and many other companies are developing similar services, especially for use on mobile phones. I suspect these instant messaging services will escape regulation for now under this new rule, and could  even potentially benefit when droves of microbloggers start to defect from Weibo and other services in the months ahead.

Bottom line: Sina’s Weibo is the clear loser in Beijing’s new campaign to clamp down on microblogging, while instant messaging firms like Tencent could emerge as possible beneficiaries.

Related postings 相关文章:

◙ Watch Out Weibo, Weixin Is Growing 新浪微博要小心腾讯微信要崛起

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Sina Results: Not So Diversified After All 新浪仍依赖广告,突围遇阻

Watch Out Weibo, Weixin Is Growing 新浪微博要小心腾讯微信要崛起

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While most of the China Internet world has been fixated on the meteoric rise of Sina’s (Nasdaq: SINA) Weibo microblogging service, a rival offering from Tencent (HKEx: 700) called Weixin, which literally means “tiny letter”, has quietly gained momentum and could pose a serious challenge in the near term. The looming Weibo vs Weixin rivalry also casts an interesting spotlight on the broader issue of PC vs mobile Internet, as Weibo is the clear leader in desktop web surfing while Weixin has a number of features that make it more suitable for mobile Internet use. Domestic media are reporting that Weixin had 50 million registered users, 20 million of those active, at the end of November. (English article) Of course those number still pale with Weibo’s 200 million registered users that Sina reported at the middle of this year. But considering Weixin was just launched early this year while Weibo has been in business for over 2 years now, Weixin clearly looks like an interesting bet. Others have tried to take on Weibo, including search titan Baidu (Nasdaq: BIDU), which shuttered its struggling microblogging service in May (previous post), and Renren (NYSE: RENN), which just recently joined the fray. (previous post) But Tencent has taken an interesting approach by developing Weixin as a product maximized for mobile microblogging, with features that, for example, allowing one’s phone to make a sound each time a new post is received and also allowing audio posts. Given that more and more of the Internet is going mobile, this initiative from Tencent, which has a strong track record of entering new business areas popularized by others, could have a good chance of success and pose the first strong challenge to Weibo. Meantime in the China Internet world, the cleanup of weaker US listed companies continues, with China CGame (Nasdaq: CCGM), a company whose market cap is just $4 million, reportedly being notified of its imminent de-listing from the Nasdaq — reports the company denies (Chinese article). Frankly speaking, I’m surprised this company hasn’t been delisted already, as it has traded below the $1 threshold required for continued listing since August. Such small companies have no business being listed on a big board anyhow, and the sooner this kind of company is purged from the big US exchanges the sooner investor confidence will return to this group of battered companies.

Bottom line: Tencent’s Weixin could soon pose a serious challenge to Sina’s Weibo microblogging service, drawing on its strong features aimed at mobile Internet users.

Related postings 相关文章:

◙ Sina’s Weibo: Growth Engine or Growing Burden? 新浪微博：动力or负担？

◙ Govt’s Microblog Shift Looks Good for Weibo 政府口风转变或有利於新浪微博

◙ Baidu’s Latest Botch: Microblogging 百度“微博”的倒掉