An industry source has revealed that Chinese internet companies Baidu (Nasdaq: BIDU) and Alibaba Group plan to invest approximately USD 100 mln in Sina (Nasdaq: SINA) Microblog (Weibo), adding, "The details will be made public within two weeks."
While Alibaba has denied the rumor, Baidu has declined to comment. Sina has indicated that it is not aware of such a plan, however, a source close to the company has said, "discussions regarding the investment started approximately three to four months ago, and have been ongoing".
The source also indicated that Sina might terminate its cooperation with Google, and switch to the Baidu search engine. This could also be seen as a possible requirement for Baidu's investment in Sina Microblog.
Alibaba and Sina have already been working together since September 9, 2010, from which time Sina Microblog users have been able to view content generated on other websites powered by Alibaba's PHPWind PHP scripting forum application.
In an effort to compete with Sina, rival Tencent (0700.HK) is aggressively promoting Tencent Microblog. A Tencent source revealed, "Every month Tencent is expending considerable effort attracting users to Tencent Microblog, aiming to add grassroots users as well as celebrities, in order to gradually reverse Sina Microblog's snowballing share of the user market."
Editor's Note: In separate report, an industry source told DoNews that Sina Microblog was recently spun off and Baidu and Alibaba have already signed strategic investment agreements with the new company, though no date has been set for an official announcement concerning the details of the funding. None of the three companies are willing to comment on the rumors. According to the source, Sina Microblog merged with Sina's wireless division before being spun off as an independent business. Sina management's plan is to attract strategic investors before launching an IPO.