Goldpebble Sees Sina (NASDAQ:SINA) Weibo Paying Users Surging and Monetization Accelerating
SINGAPORE, HONG KONG and SHANGHAI, Feb. 6, 2013 /PRNewswire/ -- Goldpebble Research Pte. Ltd. ("Goldpebble"), an independent research company focusing on processing public information by using its proprietary algorithm, today released a research summary on SINA Corporation ("Sina", NASDAQ: SINA) (Report link: http://www.goldpebble.com/research). The summary shared the recent contrarian view on Sina Weibo based on the data processed with Goldpebble's Weibo Activity Monitoring System (GPWAMS).
- With GPWAMS, Goldpebble sees Weibo user activities have been growing over the past months. Weibo paying users and enterprise users have surged while the growth of users blogging daily and monthly has decelerated. Total Weibo users, daily blogging users and monthly blogging users reached a new high of 363mn*, 14.7mn* and 50.9mn* respectively in December 2012. The number of enterprise users accelerated to 354k* from 328k* in November. The number of paying users more than doubled from 308k* in November to 691k* in December.
- The bear view is that fast growing Tencent Wechat has taken the majority user share from Weibo. Goldpebble disagrees after looking into the reasons behind the recent paying user surge.
- Goldpebble also believes that with the CEO in charge of Weibo's business and the whole company focusing on mobile, 2013 will be the start of the platform's monetization and estimates the revenue from Weibo's banner ads for branding clients will be limited by display space and capped at $371mn* per year.
- Goldpebble thinks Sina needs to develop a social based advertising system to increase the revenue from SMEs without compromising user experience. Goldpebble sees Sina is ready to release a priority display on their follower's' page and is testing suggested post, location, and search result recommendations. These features are based on a very similar technology framework that Facebook implemented.
- Goldpebble has been counting Weibo's advertising banners on the PC, Android phone and iPhone for the past weeks. We found Weibo already penetrated over 60 top global brands as well as top local brands. We did a further screen of top global 500 brands and found that 211* of them have Weibo enterprise accounts with an average of 218k* fans/followers.
- Goldpebble thinks China has its unique culture, internet development, consumption pattern, and online spending behavior. The monetization path Sina is following is unprecedented in China. Weibo is doing more than advertising. Goldpebble looked into its monetization of its 229* web games, 15,697* Weibo apps and the Android app store inside Weibo app, fulfilled sales transaction.
- Goldpebble believes a strategic partnership with current P4P search providers like Baidu (search links) or Alibaba (Taobao through train) may bring mutual benefit to both parties. Baidu is the largest online advertising platform with more than $1 billion quarterly revenue and Taobao through train is making around $700 million* quarterly revenue. Sina, with $100 million earned from fixed banner ads from the portal and $20 million from fixed banner ads on Weibo, may instantly monetize its traffic while Baidu and/or Alibaba can not only get revenue but one of the best mobile app users in China. Alibaba's Taobao and Sina's Weibo are already referring two-way traffic leads to one another and utilizing the traffic creates more synergy between them. It has been confirmed by several media reports that Alibaba and Baidu are both in talks with Sina about buying a part of Weibo.
"We invested heavily on primary data acquisition systems that help us not only to monitor the business progress of a company but also to better understand a business. That's the reason why we can capture opportunities when there are discrepancies between what the capital market thinks and how a business is running," said Yifeng Mao, CFA, founder and head of research of Goldpebble, after releasing the report.
"We did an unparalleled job on providing unbiased and accurate data and fact based research to the market about Chinese companies. Understanding both investment research and information technology, Goldpebble strives to find relevant and actionable data and information from public sources both online and offline. We are expanding our geographic coverage to not only Chinese companies but also overseas companies with a presence in China, i.e. Yum! Brands, Inc., and Coach, Inc.," Yifeng further explained about Goldpebble's business.
Goldpebble is an independent research company that relies on public information and its own proprietary data-processing algorithm. Goldpebble focuses on companies, industries and the macro-economy in China. Goldpebble emphasizes on compliance, transparency and effective methods of doing quality research, identifying relevant information and investment hypothesis from a sea of public data sources. Goldpebble boasts a world class team of engineers and research analysts. For more information about Goldpebble, please visit http://www.goldpebble.com/ or follow us on Weibo weibo.com/goldpebble
*Goldpebble's proprietary data, in this report, are processed with Goldpebble's algorithm and due diligence team from Weibo's website, company filings to SEC and other public information sources.
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SOURCE Goldpebble Research