SINA Corp. (
is set to launch its own online payment service WeiboPay
(formerly known as SinaPay) in Apr 2013, according to a recent
report from Reuters, which quoted China Daily. The online payment
service, on the lines of PayPal, will allow Weibo (SINA's
microblog) users to buy items from third-party merchants off the
Launched in 2009, SINA's Weibo gained massive popularity
within a short-span of time. The micro-blogging platform, which
is somewhat similar to Twitter, has garnered more than 500
million registered users. SINA has been continuously adding
consumer centric features such as apps, games and virtual
currency to Weibo and has managed to transform the micro-blog
platform to a full fledged social network website.
One such feature was the online payment platform SinaPay,
which SINA launched in Jan 2011. However, the service was
restricted to VIP mailboxes, online games, e-book downloads,
horoscopes and Sina Mall only. In Aug 2012, SINA upgraded the
platform and renamed it as WeiboPay.
Of late, SINA had been contemplating entry into the online
ecommerce market, primarily to improve monetization of the Weibo
platform. Earlier, it was rumored that SINA will tie-up with
Chinese ecommerce provider, Alibaba to launch an online payment
service. However, both the parties abandoned discussion after
they failed to agree on monetization.
SINA's recent announcement highlights the company's eagerness
to develop its own ecommerce service, rather than forming a
tie-up with an established player. The move will bring SINA face
to face against the likes of Alibaba, Tencent,
, which recently partnered
to enter the Chinese ecommerce market
Nonetheless, we believe that Weibo's huge install base will
provide SINA a significant competitive edge going forward.
Moreover, the company's continuous endeavor to enrich Weibo
content and ongoing investments on product development and
marketing further differentiates SINA's service in our view.
However, higher operating costs remain the major near-term
headwind. We believe that any weakness in advertising revenues
will impact SINA's ability to counter increasing operating
expenses, which in turn will hurt its bottom line going forward.
Further, we believe that increasing regulations from the Chinese
government will remain the primary concern for the stock going
Currently, SINA has a Zacks Rank #3 (Hold).
BAIDU INC (BIDU): Free Stock Analysis Report
SINA CORP (SINA): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
YAHOO! INC (YHOO): Free Stock Analysis Report
To read this article on Zacks.com click here.