By Yang Yang
Corporation, page 30Issue 528
July 18, 2011
Translated by Li Meng
Original article [Chinese]
Sina Weibo, Sina’s hit product, has garnered a huge amount of users, but is still trying to work out how to profit for this base. The platform is also being challenged from Tencent, which uses a more social networking site appeal and has more capital to burn.
An inside source from Sina confirmed on July 13th that the "Weibi,” its own virtual currency, will be launched in the third quarter of this year to some users before releasing it to everyone. 1 Weibi will be valued at 1 Yuan where various virtual products and value-adding services (including third-party virtual products and services) can be purchased.
Following the announcement, Sina shares rose 8.9% hitting an intraday high of $115, a sharp rebound from its low of $80 in June, and an increase of 40% within a month.
More known for its news, Sina profits from web advertising. While Tencent profits from paid application used on its network. Unwilling to just profit from advertising, Sina Weibo’s upcoming update takes a more Facebook appearance rather than Twitter, according to a screenshot seen on the internet.
In addition to the change of appearance, the Weibi will narrow Sina’s gap with Tencent’s share of the social gaming revenue, since virtual credit is now a necessity in the online gaming industry.
Under the CEO Cao Guowei's leadership, Sina is quickly heading towards the firm’s intended goals of interactive advertising, social games, real-time search, wireless value-added services, e-commerce and paid digital content.
Since the end of April this year, Sina Weibo has more than 140 million users and has more than 3,000 third-party applications. Goldman Sachs predicts that by 2012, Sina Weibo will have revenue of $21 million with advertising and applications as its two main revenue streams.
