Bottom line: Mark Zuckerberg’s meeting with Chinese President Xi Jinping and new China-related remarks by Sheryl Sandberg show Facebook is closing in on a goal of launching its signature service in China, with a breakthrough possible as soon as next year.
Facebook thrives on China ad sales
Despite being blocked in the world’s largest Internet market, social networking (SNS) giant Facebook (Nasdaq: FB) is using every opportunity to quietly remind the world that it’s determined to include China in its global footprint. Just a week after company founder Mark Zuckerberg met with Chinese President Xi Jinping at a high-profile event in Seattle, his chief deputy Sheryl Sandberg was quoted at an event in New York talking up the big business Facebook is already doing in China.
Company watchers will know that Facebook quietly opened a China office in Beijing last year, with an aim to courting local advertisers seeking to reach the company’s global audience of 1.5 billion users. That business is doing quite well, according to Sandberg, though the Facebook’s ultimate China goal is still its eventual entry into a domestic Internet market that boasts nearly 700 million web surfers. Read Full Post…
Bottom line: Twitter’s new CEO is likely to re-think the company’s decision to stay out of China due to Beijing’s strict self-censorship policies, and could ultimately make a play for the market in the next 2-3 years.
Twitter to re-think China under new CEO?
It seems that Weibo (Nasdaq: WB), often called China’s equivalent of Twitter (Nasdaq: TWTR), isn’t the only one struggling these days in the social networking (SNS) realm. The original Twitter has just announced that its own CEO Dick Costolo has succumbed to calls for his resignation due to stagnating growth, meaning his replacement will come under intense pressure to jump-start the company’s prospects. One of the fastest ways to do that would be going to China, leading to the intriguing prospect that Twitter’s road map could bring it to China sooner than many expected under its yet-to-be-named new leader. Read Full Post…
Bottom line: Twitter’s growing pursuit of business from Chinese advertisers shows it is watching the market for a potential future entry, while a new equity tie-up could see Didi Kuaidi’s hired car services launch on Weibo later this year.
Twitter chases China advertisers
Social networking (SNS) pioneer Twitter (NYSE: TWTR) and its Chinese clone WeiboCorp (Nasdaq: WB) are both in the China headlines today, each taking gambles on different parts of the market. After previously saying that China isn’t a market where it can do business, the original Twitter has quietly begun to court local advertisers, even as its actual service remains blocked in the country. Meantime, Weibo, which rose to prominence after Twitter was first blocked in China in 2009, has announced a relatively large new investment in local hired car services leader Didi Kuaidi. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 28. To view a full article or story, click on the link next to the headline.
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Buffett-Backed Automaker BYD (HKEx: 1211) Plans Up To $1.9 Bln Placement (English article)
Blocked in China, Twitter (NYSE: TWTR) Still Courts Chinese Firms For Ads (English article)
Sina Weibo (Nasdaq: WB) to Invest $142 Mln in Taxi App Didi Kuaidi (English article)
Gucci China Discounts Prompt Lines as Bagmaker Clears Stock (English article)
Chinese Airline Juneyao IPO Surges by Limit 44 Pct on Shanghai Debut (English article)
Bottom line: Sina stands a 50-50 chance of getting a takeover bid within the next year, as suitors eye it for its low valuation, well-respected name and controlling stake of Weibo.
Sina anticipating suitor?
Leading web portal Sina (Nasdaq: SINA) has become one of China’s perennial Internet underperformers, leading to occasional talk that it might become a takeover target for a larger, better-run peer. Now Sina has just announced its renewal of a “poison pill” plan designed to prevent such a hostile takeover. This particular move looks like a formality rather than indicator of a looming takeover bid, since Sina launched the original plan 10 years ago and perhaps it is now is now set to expire. But the fact that Sina is not only renewing the plan, but doing so in a very public way, indicates it may feel it could become a takeover target in the current hot climate for Chinese Internet M&A. Read Full Post…
Bottom line: AP’s willingness to consider new tie-ups with Xinhua is the result of economic pressures being felt by western media, but is unlikely to produce any major alliances due to the potential for negative publicity.
AP open to deeper partnership with Xinhua
Rapid changes in the traditional media realm are creating some strange bedfellows, and the situation looks even stranger in China due to the strong elements of censorship and state control. That odd combination of circumstances is creating a perfect storm that has led some western media companies to do the previously unthinkable and consider partnerships with some of China’s most centrally controlled media. Recent rumors have said that global financial news leader Bloomberg may be considering such a tie-up, and now the latest reports are saying US media giant Associated Press (AP) is also open to such partnerships. Read Full Post…
Bottom line: Chinese Internet stocks are likely to see a soft landing after a correction period in the first half of the year, with leaders and high-growth second tier players likely to experience a rebound in the second half.
China Internet stocks headed for soft landing
A new scorecard is casting a worrisome spotlight on the bumper crop of Chinese Internet firms that listed last year, pointing out that more than half are now trading below their IPO prices. The sagging prices continue a trend that I pointed out in my IPO scorecard at the end of last year. That trend has seen shares of many New York-listed Internet firms come back to their offering levels or lower as investors pocketed profits from strong post-IPO rises. (previous post) But rather than label this a reason for worry, I would argue instead this broader wave represents a rationalization of the market that will ultimately see the best-performing names rewarded and the money losers languish. Read Full Post…
Bottom line: Alibaba could make a bid to buy Yahoo as part of a broader overhaul of the relationship between these 2 Internet companies, but personal and other issues could ultimately hamper such a deal.
Yahoo to sell remaining Alibaba stake?
Media have been focused these last 2 days on reports of a new mega purchase by Alibaba (NYSE: BABA) in the insurance space, but another report centers on a far more intriguing possible deal involving the e-commerce giant’s long relationship with faded US search giant Yahoo (Nasdaq: YHOO). That particular relationship has undergone huge changes since the pair first formed their partnership a decade ago, and could easily be the subject of a book. In the latest chapter to that story, a new report is speculating that Alibaba could make a bid for Yahoo in the next year as it seeks to go global following its blockbuster IPO in 2014. Read Full Post…
Bottom line: SNS operator Tumblr could quickly find its site blocked in China if it rolls out a Chinese-language edition targeting mainland users without taking formal steps to enter the country.
Tumblr eyes China
News that US social networking site (SNS) Tumblr is eying the China market looks intriguing, as it would come not long after professional networking site LinkedIn (NYSE: LNKD) entered the market and as industry titan Facebook (Nasdaq: FB) lobbies hard for its own Chinese presence. But what most caught my attention about this latest development was the somewhat humorous headline in one report noting that Tumblr is “still not blocked in China”.
Of course the implication is that once Tumblr formally launches a Chinese language edition of its popular blogging and SNS service, it could very easily find its site blocked by China’s Internet police. Read Full Post…
Bottom line: Weibo’s latest moves to stop users from defecting to WeChat reflect the company’s concerns over its fading momentum, and send a negative signal that will put pressure on its stock.
Weibo takes new steps to counter WeChat’s rise
An entertaining war is breaking out in the social networking (SNS) space, with word that the Twitter-like Weibo (Nasdaq: WB) is taking steps to punish people who use the service to promote their parallel accounts on archrival WeChat. I say this particular war is somewhat entertaining, as it seems quite petty and reflects the intense competition between these 2 companies. But at a more serious level, Weibo’s move reflects the very real fact that its service is rapidly losing eyeballs to the trendier WeChat, which is far more versatile and is also optimized for the fast-growing mobile Internet space. Read Full Post…
Most of China’s high-tech attention was focused on the scenic canal city of Wuzhen near Shanghai this past week, as a who’s-who of top Internet executives gathered for a conference that billed itself as a global gathering. Most of China’s top names were reportedly at the event, including Baidu’s (Nasdaq: BIDU) Robin Li, Alibaba’s (NYSE: BABA) Jack Ma and NetEase’s (Nasdaq: NTES) Ding Lei. But the guest list was notably lacking in major global names, and at least one executive commented on the sensitive subject of the exclusion of global leaders like Facebook (Nasdaq: FB) and Twitter (NYSE: TWTR) from the Chinese Internet.
Meantime, the marketing savvy Lei Jun, who is also CEO and hypemaster supreme for smartphone sensation Xiaomi, also managed to make his own mini splash in the microblogging realm by declaring his own ambition to overtake Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL) to become the world’s biggest smartphone brand. Such hype from Lei isn’t all that unusual, though I was somewhat surprised to see several executives from other firms chime in with support for this upwardly mobile company. Read Full Post…
