Sohu IT, 3/02/11
In Chinese internet company Sina's (Nasdaq: SINA) recent Q4 2010 earnings call, CEO Charles Chao and CFO Herman Yu addressed analysts' questions on topics such as Sina's Weibo microblog service, the company's investment in Chinese B2C mail-order e-commerce company Mecox Lane (Nasdaq: MCOX), and Sina's online video business.
Chao said Sina has no plans to push for Weibo to become profitable this year, but instead will focus on improving quality and user experience, as well as further promoting the platform to attract more users. At the same time, however, Sina is developing a range of features that can eventually drive profits, such as an advertising system and real-time search, and is building a game platform that will be linked to Weibo.
Sina's advertising business grew 44% YoY in 2010, according to Chao, with significant growth potential this year as well. Sina's video advertising business grew 200% last year, and Sina plans to invest heavily in online video content and products in 2011 in a bid to increase market share. Yu said that Sina saw its number of advertising clients grow more than 10% in 2010, with rapid growth in the e-commerce and fast-moving consumer goods (FMCG) sectors bringing in many new customers.
Sina currently has approximately 3,500 employees and plans to add at least 1,000 this year. Sina Weibo, which began with a staff of around 100, had approximately 600 employees by the end of 2010 and is expected to double the size of its workforce this year. Sina's number of microblogging users grew 25-fold last year, with total registered users for Weibo now exceeding 100 mln, double compared to the total four months ago. The overwhelming majority of Sina Weibo users are individuals. The number of verified accounts reached approximately 80,000, and the average daily number of video viewings on the platform reached 10 mln. Sina will launch a new version of Weibo in Q2 2011.
Chao confirmed Sina has established Weibo as a standalone company, and is exploring various strategic possibilities. Sina is currently the sole shareholder of the new company with no strategic partners, but will not rule them out going forward.
Editor's Note: For more background on this topic, please see "Rumor: Sina Registers Two Firms for Microblog Business" MD 1/14/11 issue.