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Sina seeks new revenues as WeChat snaps at its heels (2)

By Chen Limin (China Daily)

08:21, February 05, 2013

The company is in talks with a number of companies regarding cooperation of this kind, it said in an e-mail to China Daily, without giving more details.

However, analysts doubt how much the e-commerce trials will ultimately bear fruit.

"Sina, as a media company, actually doesn't have many advantages in providing e-commerce services or distributing games through Weibo," said Chen Zhengyu, a stock analyst with China Merchants Securities (HK) Co.

"The real thing it should concentrate on is the ability to provide advertisers with value - more targeted advertising on Weibo that can grasp and analyze users' habits and information," Chen said, adding that Sina has a long way to go in providing advertising of this kind.

Qiu Lin, an IT analyst with Guosen Securities in Hong Kong, said Sina's cooperation with Xiaomi and Mercedes-Benz on e-commerce is more of an act to attract eyeballs, rather than bringing in real profits.

Charles Chao, Sina's chairman and chief executive officer, said in 2011 that he hoped Weibo could have six revenue streams: targeted advertising, social games, real-time search, value-added services, e-commerce and data analysis.

However, Weibo relies mostly on advertising currently, together with a small proportion of revenue from distributing games. Out of the total Weibo revenue - $19.3 million - in the third quarter, games took up one fifth, or $4 million, the company said. The rest was from advertising.

"It will take more time to educate the market for other revenue streams to develop to become large scale," said Sina in the e-mail.


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