Sina Answers Twitter With $6 Billion Value Aided by Micro-Blogs
Sina Answers Twitter With $6 Billion Value Aided by Micro-Blogs
2011-02-17 05:36:26.683 GMT
By Bloomberg News
Feb. 17 (Bloomberg) — Ye Fangzhao, a 25-year-old freelance brochure editor for auto companies, abandoned his Twitter account a year ago to start using Sina Weibo, a Chinese equivalent. Now he’s on the micro-blogging service 10 hours a day to connect with motoring experts and keep up on trends.
“I don’t need to go to bookstores or buy magazines,” says Ye, who lives in Xiamen, on China’s east coast. “It saves me time and money.”
Sina Corp., which operates China’s third-most visited website, is targeting people like Ye to win more attention from China’s 450 million Internet users, Bloomberg Businessweek reports in its Feb. 21 edition. Chief Executive Officer Charles Chao says he hopes Weibo’s popularity will help Sina transform from a news portal to a social networking environment that lures outside developers.
Sina has 87 percent of the weibo, or micro-blogging, market by time spent browsing, according to Eric Wen, an analyst at Mirae Asset Securities Co. in Hong Kong. That helped triple its value since the service began in August 2009 to $5.8 billion on the Nasdaq Stock Market in New York by Feb. 15. The weibo service alone may be worth $2 billion, half of it from advertising potential, Wen said in a Jan. 25 report.
“Weibo is the best opportunity for Sina to transform into an Internet platform,” says Ma Yuan, a Beijing-based analyst with Bocom International Holdings Co., who has a buy rating on the company. “It is becoming the next killer application on the Internet and mobile phones.”
Twitter Blocked
The company took advantage of the social media vacuum created in July 2009 after Twitter and other social networking sites were blocked in China around the time of the 20th anniversary of the Tiananmen Square crackdown and the eruption of ethnic unrest in Xinjiang region. Ye was among users who continued to use Twitter by getting around China’s so-called Great Firewall, as the country’s Web monitoring system is known, before switching to Weibo in 2010. He was attracted by its bigger Chinese audience and convenience.
“Our strategy is to build a platform that is open to everybody,” says Chao, 45. “We hope people will join and create content and applications for all to use.”
Like Twitter, Sina Weibo’s posts are limited to 140 characters. In Chinese, where many words are just two or three characters, micro-bloggers can express a lot more in the same space.
Twitter was the model for Sina as it built on its popularity as a news portal and celebrity blogging site to expand into social networking, Chao says. Innovations added by Sina include allowing users to comment on other people’s posts, as well as upload videos and pictures.
‘Strongest Brand’
Sina started its micro-blogging service at least four months before its three main rival portals: Shenzhen-based Tencent Holdings Ltd., and Sohu.com Inc. and Netease.com Inc.’s 163, both based in Beijing.
“In China, weibo has become synonymous with Sina,” says Sabrina Dong, an analyst at Analysis International, a research company in Beijing. “It has the strongest brand.”
The micro-blogging site functions more as news media than Twitter does, says Hu Yong, an associate professor of journalism and communications at Peking University.
“It forms an unprecedented public arena for people across the regions and classes to participate,” Hu says. “Anyone may become a center of information.”
Just as “to tweet” has become a verb in English, “zhi weibo,” literally meaning “to knit a scarf,” has entered the lexicon in China. The word weibo sounds like the Chinese word for scarf.
‘No-Brainer’
Sina deploys Chinese and foreign celebrities to attract users. Tweets from Bill Gates, the chairman of Microsoft Corp., and Rio Ferdinand, a soccer player with the English team Manchester United, are copied over from San Francisco-based Twitter Inc.’s service to Sina’s weibo. Gates has more than 720,000 fans and Ferdinand almost 300,000 on Sina Weibo.
“It was a no-brainer,” says Ferdinand. “It brings me closer to people who have an interest in me and United and how things are going.” Matt Graves, a spokesman for Twitter, declined to comment.
The most popular account belongs to Yao Chen, an actress who has more than five million followers. Lady Gaga has about eight million on Twitter. Sina Weibo’s top 100 bloggers will surpass their counterparts on Twitter in followers in the second
half of this year, Credit Suisse Group AG said in a Feb. 9 report.
Sina hasn’t released the number of its weibo users since claiming 50 million by last October. The total may rise to 120 million by 2012, according to Pennsylvania-based Susquehanna International Group LLP.
Competition Intensifies
Tencent, China’s largest Internet company by value, said Feb. 5 that it had 100 million weibo users. Tencent’s market share of weibo by the amount of time users spend browsing is 8 percent, according to Mirae Asset’s Wen. He prefers Tencent over
Sina to cash in most on China’s social networking service boom because of its dominance in other community applications such as instant messaging. Wen has a hold rating on Sina.
The competition is intensifying. Tencent last month put on TV ads featuring Liu Xiang, the Olympic champion hurdler, who it says has an audience of 10 million. Sohu launched a dating service on its weibo, while Sina offered pre-paid phone cards
and golden rabbit ornaments to users who referred friends. Li Mei, a spokeswomen for Sohu, wouldn’t disclose its user data, saying “our goal now is to grow the number of users.” Netease Chief Executive Officer Ding Lei says its Weibo, which has 32 million registered users last month, focuses on “talented grassroots users” rather than celebrities.
Egypt Searches Censored
As Sina Weibo accelerates the spread of information across the country, it creates challenges for China’s Internet censors, says Bill Bishop, a Beijing-based independent media consultant.
As with other Internet services in China, censors police the weibo site, requiring the company to delete or limit sensitive posts. On Sina Weibo, a Feb. 10 search for “Egypt” in Chinese brought up a notice saying results can’t be shown because of legal restrictions. A user link on the same page offered a live broadcast of protests in Tahrir Square, and many accounts still discuss the situation.
“There are clear laws that forbid the spread of harmful information,” such as that which damages national security and social stability, says Li Wufeng, chief of the State Council Information Office Internet Affairs Bureau. China’s policy is to “develop the Internet so that the public will enjoy all kinds of applications,” he says.
Even so, Sina Weibo is “by far the best platform for free speech” in China, says Lee Kai-fu, former China head of Google Inc. and one of Sina Weibo’s most popular users with 3 million fans. Users engage in frequent discussions rarely seen in the mainstream media.
‘Sensitive Words’
Censorship itself is a common topic, using the Chinese word for “river crab,” which has become a euphemism for deleting or blocking content on the Internet. River crab sounds like the word for harmony in Chinese.
Xia Shang, a Shanghai-based novelist and tea seller who offers a discount to his Sina Weibo fans, last month used a post to satirize the Great Firewall.
“There is a country that has sensitive words all over its body,” he tweeted.
After few of his thousands of fans replied, Xia discovered censors had quickly kept the post from being disseminated to his followers, even though it appeared on his own account as if it had been published.
The company’s attempts to disguise censored weibo posts shows Sina’s tricky balancing act, Xia says.
“I’m sympathetic to Sina’s dilemma,” he says. “It needs trouble makers like us because it’s not attractive with only bourgeois talk, yet it cannot survive without imposing some control.”
Fan Wenxin in Shanghai.With assistance from Mark Lee in Hong Kong, Tariq Panja in London, Douglas Macmillan in San Francisco. Editors: Neil Western, Robert L. Simison