WEIBO TALK: Murdoch Back In China, Xiaomi’s Banner Year
Tech executives welcomed in the New Year with some intriguing hints on their microblogs, with posts suggesting major new moves in China from global media titan News Corp (Nasdsaq: NWSA) and online video operator LeTV (Shenzhen: 300104). In the former case, a local tech executive posted a photo of himself meeting with Rupert Murdoch in China, indicating the News Corp chief was back doing business in the country after a long absence. In the latter case, LeTV chief Jia Yueting was hinting that his company could soon become the latest Chinese Internet firm to enter the overheated smartphone market.
Meantime, incumbent smartphone sensation Xiaomi was also making its usual buzz in the cyber realm, announcing some impressive financial data for 2015. But its envious rivals weren’t letting Xiaomi celebrate its banner year uncontested, with several predicting the company could face some strong headwinds in the New Year.
Let’s begin our weekly microblogging round-up with the Murdoch photo, which was posted by Derek Shen, China chief of professional networking website LinkedIn (NYSE: LNKD), which launched a China service last year. (microblog post) The photo shows Murdoch and Shen standing together in the offices of China Broadband Capital (CBC), which has become one of China’s highest profile media investors.
CBC’s investment portfolio includes both LinkedIn, and also the Chinese-language TV station that was once News Corp’s biggest investment in the country. Murdoch sold the station to CBC in 2010 after years of frustration, and appeared to be largely writing off the difficult market in 2013 with his high-profile divorce of his much younger, China-born wife Wendi Deng. (previous post) But this latest photo indicates he’s still taking time to travel to China, and hints he was here to discuss business.
Shen talks mostly about Murdoch’s personal qualities in his brief post accompanying the photo, saying that despite being 84, the News Corp chief still walks tall, thinks clearly and takes careful notes when discussing new projects. The fact that Shen took part in the meeting, which was facilitated by CBC, hints that some kind of tie-up could be under discussions for the trio. Shen also has ties to struggling SNS site Renren (NYSE: RENN), as well as online search leader Baidu (Nasdaq: BIDU) through his previous venture, the group buying site Nuomi.
LinkedIn itself just entered China last year and hopes to expand aggressively, so perhaps News Corp could help to fund that expansion or even invest in a separate but related social networking (SNS) venture. In a separate post, Shen reflects on the busy year he had in China in 2014, including 400 interviews he personally conducted as part of LinkedIn’s efforts to quickly build up its China operation. We can probably expect to see the company make some headline-making moves in China in the year ahead.
Meantime, LeTV’s young and charismatic chief Jia Yueting was dropping his own less subtle hints of things to come, implying his company could soon enter the smartphone space. Jia disappeared from public view for most of the second half of last year, fueling concerns about LeTV, but then suddenly reappeared last month in a Beijing hospital. He later said his absence was necessary for treatment of an unspecified illness.
In his New Year microblog post, Jia drops his not-so-subtle hint by saying “LeTV fans, do you think that LeTV should put out a super-smartphone?” (microblog post) The post includes a small photo, but nothing else. Since Jia returned to public view, he has announced several major new initiatives, including a new energy car. So a smartphone certainly wouldn’t be unexpected. Many other Internet companies have also joined the race, including the entry by software security specialist Qihoo 360 (NYSE: QIHU), with its recent formation of a major joint venture with manufacturer Coolpad (HKEx: 2369).
We’ll close out this microblogging round-up with the king of cool from the smartphone space, Xiaomi, whose chief executive Lei Jun posted some of his company’s annual sales figures on his account. He said Xiaomi sold 61.12 million smartphones for the year, up 227 percent from 2013, beating its already upwardly revised target of 60 million. (microblog post) He added the company’s revenue grew at a slower but still impressive rate of 135 percent to 74.3 billion yuan ($12 billion), reflecting the stiff competition in the market.
Lei didn’t give any concrete forecasts for 2015, though several of the company’s envious rivals were happy to predict troubles for Xiaomi in the year ahead. One of those was a software engineer from Huawei, who said a less-than-stellar performance for Xiaomi in the important fourth-quarter could signal a slowdown ahead. (microblog post)
Executives from rival ZTE (HKEx: 763; Shenzhen: 000063) and leading telco China Mobile (HKEx: 941; NYSE: CHL) also questioned the sky-high valuation of $45 billion that Xiaomi got from a recent new funding round. (ZTE post; China Mobile post) Most of these executives are making their negative comments at least partly out of jealousy, though Xiaomi will also be coming under big pressure in the New Year to continue its meteoric rise.
