Bottom line: NetEase’s withdrawal from microblogging represents a broader decline for the overall sector, and is likely to put downward pressure on Weibo shares over the medium to longer term.
NetEase microblog withdrawal looks bad for Weibo
Media reports that web stalwart NetEase (Nasdaq: NTES) will finally shutter its microblogging service don’t come as a big surprise, since it’s been years since anyone has posed a challenge to the dominance of sector leader Weibo (Nasdaq: WB). But what does come as a slight surprise was the reaction to the news in Weibo’s share price. One would normally expect Weibo shares to rally on news of a competitor’s demise, but instead Weibo’s shares actually fell nearly 4 percent in the latest trading session. Read Full Post…
I’m no fan of censorship, but I still have to compliment Beijing on its recent unusual decision to inform South Korea of the reasons behind its recent decision to block the popular mobile instant messaging service called Line in China. This kind of explanation would sound normal in any other country; but it represents a big step for Chinese censors, who are highly secretive when they choose to block Internet sites, ban foreign films and TV shows and take other similar actions.
Many people, myself included, won’t be truly satisfied with China until it completely removes its practice of censoring material that simply expresses different views from the central government or is critical of high government officials. But at least this unusual act of openly explaining one of its censorship actions marks a move in the direction of more transparency, which could be a small sign of improvement in helping companies navigate the difficult Chinese media market. Read Full Post…
The following is the 7th and final part in a multi-part series about the rise of WeChat, the popular mobile instant messaging service owned by Tencent.
By Lanie Nie
WeChat builds an ecosystem
While China might be behind the US in many key areas of Internet development, it is quite advanced in the use of smartphones as the primary device for accessing the Internet. Tech guru Mary Meeker’s 2014 Internet Trends Report showed that China has more than 500 million mobile Internet users, accounting for 80 percent of its online population, the highest level worldwide. With the nation’s smartphone prices in freefall and high-speed 4G access expanding, it’s likely that a majority of Chinese people will be on the mobile Internet in the next 5 to 6 years. Read Full Post…
Update: Since originally writing this post, Tencent has issued a statement in response to the original Chinese media reports saying it has no plans to close its microblogging service. It adds the service will be combined with its news service, as part of a broader restructuring of its online media group.
New reports are saying that leading Internet firm Tencent (HKEx: 700) is quietly halting development for its largely ignored microblogging service, in what would amount to a rare admission of defeat in its core social networking services (SNS) business. The move would be long overdue, as Tencent’s microblogging service, a variant of US leader Twitter’s (NYSE: TWTR) service, was never really a major player in China. So in that sense I have to at least congratulate Tencent for finally conceding defeat in the space to Weibo (Nasdaq: WB), the Twitter imitator founded by leading web portal Sina (Nasdaq: SINA). Read Full Post…
Two of the world’s biggest social networking service (SNS) operators are in the headlines as the new week begins, starting with word that Facebook (Nasdaq: FB) is moving ahead with its plans to open in China. Meantime, separate reports are saying Japanese-based mobile instant messaging service Line has been disrupted in China, perhaps for carrying sensitive content.
These news bits may look different on the surface, but they’re really quite similar in broader terms. China is extremely wary of offshore-based SNS like Facebook, Line and Twitter (NYSE: TWTR), because they are not subject to the country’s strict self-censorship laws. Thus companies that want to develop a China business must open offices and host their Chinese services on local servers to placate Beijing, which is what Facebook and Line are doing now. Read Full Post…
I’ll be a bit whimsical on this final day of the week with a prediction that a sale could be looming for social networking (SNS) site Kaixin, following reports of strong growth for the company’s online gaming business. Anyone reading this is probably puzzled, unsure about the relationship between a growing gaming business and a company getting acquired. I’ll explain all that shortly, but will end the suspense now by saying the potential buyer would be Internet titan Tencent (HKEx: 700), which shares a number of links and other key qualities with the much smaller Kaixin. Read Full Post…
An interesting report has just emerged on the nature of traffic on Sina’s (Nasdaq: SINA) Weibomicroblogging service, casting a spotlight on how people use the platform just a week before it gets set to make a major New York IPO. The timing of this latest report looks a bit suspicious, aimed perhaps at further cooling sentiment towards an IPO that was already losing momentum. But from my perspective, this latest finding that a very small number of Weibo users are responsible for most of the site’s original postings isn’t necessarily a bad thing. To the contrary, this kind of revelation could even help Weibo by differentiating it from rival service WeChat, which is growing much faster. Read Full Post…
Word that Twitter (NYSE: TWTR) CEO Dick Costolo is making a trip to China just 4 months after his company’s IPO will almost certainly set to world tweeting about whether the social networking giant could be considering a play for the world’s largest Internet market. Such a move seems just a tad unlikely in the very near future, since Costolo has previously said that China isn’t a place where Twitter can operate due to the country’s tough self-censorship laws. But much has happened in the last 4 months that could be causing him to re-think his position, including the recent entry to China by corporate networking giant LinkedIn (NYSE: LNKD) and the upcoming $500 million New York IPO for Sina (Nasdaq: SINA) Weibo, often called the Twitter of China. Read Full Post…
Anti-monopoly regulator may need to brandish veto stamp
After years of fragmentation, China’s Internet has undergone a sudden and radical overhaul over the past year, with 3 major firms emerging as major consolidators. The frenzy of new tie-ups and acquisitions has been a welcome development, helping to cool overheated competition in a wide array of sectors where most companies were losing money.
But with the emergence of Alibaba, Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) as the 3 major consolidators, China’s anti-monopoly regulator should start to give closer scrutiny to future deals to avoid too much reduction in the competition necessary to ensure future innovation and consumer choice. Such scrutiny could and should ultimately lead to the veto of some future deals, especially larger ones, by regulators who need to become more assertive in the space. Read Full Post…
Less than 2 months after hiring a top executive to head its new push into China, professional networking leader LinkedIn (NYSE: LNKD) has come out with a series of announcements on the new launch of a Chinese-language edition for its service, and also some figures for the size of its addressable market in China. The company has also rolled out its official Chinese name, Lingying, which translates roughly to “Leading Hero”, perhaps encapsulating how it hopes to position itself in the market. And in a nod to the challenges it will face, its CEO Jeff Weiner has also put out a separate lower-profile announcement detailing how the company plans to handle sensitive issues involving China’s strict censorship policies. Read Full Post…
New data is highlighting an online trend that I wrote about last year, namely that microblogs have peaked in popularity and are starting to decline, in a bad sign for leading web portal Sina (Nasdaq: SINA) as it rushes monetize and list its popular Weibo service. Frankly speaking, I’m not too optimistic anymore about the prospects for Sina Weibo, which is really just a copy of US social media pioneer Twitter (NYSE: TWTR) and hasn’t shown much ability to innovate in the rapidly changing social networking (SNS) space. All that said, I imagine this latest report from the China Internet Network Information Center (CNNIC) is prompting new urgency for Sina to separately list its Weibo unit, and that such an IPO could come later this year. Read Full Post…
