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Sina and Tencent set to intensify online tussle

By CHEN LIMIN  (China Daily)

08:35, January 04, 2013

Sina Corp, the Chinese Web portal operator, may be facing a tough 2013 under intensifying competition from rival Tencent Holdings Ltd, China's biggest Internet company by revenue, according to industry analysts.

Sina Weibo, the company's micro-blogging service, had stood out as a sector success at a time when Web portals saw their advertising revenues slow amid the weak economic outlook. However, the popular service has been outshone over the past 12 months by WeChat, a hit service provided by Tencent.

Charles Chao, Sina's chairman and chief executive officer, admitted in November that Weibo was feeling growing pressure from WeChat, particularly on user access from mobile devices.

Tencent developed WeChat, a mobile application enabling users to send text messages, voice messages and photos free of charge, in January 2011, and the service is expected to attract 300 million users this month, according to Pony Ma, Tencent's chairman and chief executive officer.

Analysts now see the service as a real threat for Weibo, which has an estimated 424 million users.

Hong Bo, a Beijing-based IT analyst and founder of the consultancy company IT5G, said users now go to Weibo for information and personal interests, and to WeChat to communicate with friends, giving the latter significantly higher "user-loyalty".

Qiu Lin, an Internet stock analyst at Guosen Securities Co Ltd, said WeChat is likely to have greater potential in terms of generating revenue.

"As the biggest online games operator in China, Tencent may start to generate revenue from WeChat by introducing games to the platform as early as this year," he said.

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