Sina's Q4 Review: Ambivalence all Around
Sina Corp came out on top of expectation when it posted net Q4 profits of $2.4 million. This is however, a much lower number compared to the postings a year ago.
Sina not what it used to be
The company is in dire straits as it is also hit by a small scandal about a large number of its Weibo users turning out to be fake accounts. Indeed, its alleged 503 million users are in fact closer to 50 million active users, perhaps less. This is a far cry from its claim to half the population of China.
Sina Corp share price for the 4th quarter now stands at $56.50 - a 13.4% drop from the start of this quarter. None of this is very impressive for what is supposedly the largest online portal in China.
Sina Weibo vs. WeChat
It has not been a good few months for Sina Weibo, who went from being the hottest ticket in town to becoming a little lukewarm.
One of its main worries is the rising popularity of Tencent's earth shatteringly magnificent app: WeChat (I am not paid by Tencent to sing its praise, I just really really like it).
Because internet trends are so loosely structured, WeChat is now picking up on hours formerly spent using Weibo. It's true that these companies offer very different services but because it all comes down to entertainment and communication, these two can still come into direct competition.
The other thorn in Sina Group's foot is that of online advertisement. A few weeks back, the company started including sponsored posts within its Weibo timeline. This venture received mixed emotions from reviewers, but it turns out that it didn't really help Sina push up the monetization rates of its company. This is still one of the biggest struggles of the group: actually making money!
The future struggles
Some may claim that Sina has passed peak popularity and that it will be a downward spiral from here on out. Although there is truth to back up this claim, it could also be a little hasty to advance this mega company has nothing more to offer.
It needs to sort out this story about fake Weibo account and find a way to attract new, active users to its microblogging empire. It also needs to seriously find a way to make to cash, FAST. Online advertising will most likely be the best way to do that but they need to change from what they are doing now. It will be sink or swim from here on out.