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

By newsdoug on December 12, 2011

Weixin takes on Weibo in mobile 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.

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