Sina seeks users and apps for its Weibo social network

PUBLISHED : Friday, 06 August, 2010, 12:00am
UPDATED : Friday, 06 August, 2010, 12:00am

Online media giant Sina Corp will intensify efforts to build up users and applications on Weibo, its Twitter-like mini-blogging service, amid rising demand from advertisers to use the social-networking platform.

The Shanghai-based firm, which reported higher-than-expected second-quarter earnings yesterday, said online advertisers will need to be patient because Weibo remains poised for more rapid growth.

'Our primary focus is to accumulate users and make this product much bigger in the near term, so we can monetise on a large scale in future,' said president and chief executive Charles Chao.

Chao said there were many requests from advertisers to use Weibo in conjunction with this year's football World Cup tournament, which was held in South Africa from June 11 to July 11, and these were rejected.

'There are thousands and thousands of corporate clients in our mini-blog platform. They find it a useful and effective way to reach customers and do some marketing.'

Weibo, which started beta tests in August last year, had about 5 million registered users in March and double that number by May, according to recent mainland reports quoting Chao.

Twitter, the pioneering mini-blog service that allows members to send status updates or 'tweets' of 140 characters or less, had an estimated 75 million users at the end of last year. Like Twitter, Weibo can be accessed by computer or mobile phone.

Sina plans to open up Weibo's application programming interface, so independent third-party software developers can create more relevant applications that subscribers worldwide may want to use, Chao said.

The Nasdaq-listed firm's second-quarter net profit increased 89 per cent to US$25.2 million, from US$13.3 million a year ago, to beat analysts' estimated US$18 million.

Led by robust demand from advertisers in the car, fast-moving consumer goods and financial services sectors, Sina posted a 10 per cent year on year increase in revenue to US$99.4 million, exceeding the consensus estimate of US$92.4 million.

Analysts at Deutsche Bank Equity Research Asia attributed Sina's strong gains mainly to 'better-than-expected advertising revenue, boosted by the World Cup; strong operating cost controls; and a reversal of an allowance for bad debt of US$1.6 million'. Deutsche Bank maintained a 'Buy' rating on Sina shares.

Ahead of the pack

Nasdaq-listed Sina's net profit for the second quarter jumped to US$25.2 million, a leap of: 89%