China’s Biggest Microblog Service Slated To Succeed On Twitter’s Turf

Last month’s rumour that Sina (NSDQ: SINA) Weibo, a Chinese equivalent to Twitter, will launch internationally is gaining credence.

To start, it is driving up its service in Japan by striking a partnership with data company Find Japan that, from today, will verify the Weibo accounts of celebrities, businesses and institutions in the same way Twitter does with its “verified” accounts.

But this Zacks analysis note is optimistic about much grander international plans…

“According to a Credit Suisse analyst, weibo is expected to exceed Twitter in terms of top 100 bloggers’ followers in the second half of this year.

“SINA is expected to launch an English version of weibo, globally by the end of 2011. SINA noted that overseas users account for more than 10% of weibo users. With an imminent English version launch of the miniblog, we believe SINA will gain strong market share in international markets, which will drive revenue growth going forward, of course provided that its monetization efforts are successful.

“Most importantly, international expansion will provide SINA a diversified market, as the company faces significant competition within its domestic market from large companies such as Baidu (NSDQ: BIDU) Inc. (NasdaqGS: BIDU – News), AirMedia Group, Microsoft (NSDQ: MSFT) Corp. (NasdaqGS: MSFT – News), Google Inc. (NSDQ: GOOG) (NasdaqGS: GOOG – News), Sohu.Com Inc. (NasdaqGS: SOHU – News), Tencent and Alibaba.

“Despite the significant competition, we believe that SINA’s business has a competitive edge based on the site’s popularity in China, superior brand recognition, strong product pipeline, continuous investment in product development and marketing and a robust user base for its e-commerce and Weibo offerings.”

Russia’s Digital Sky Technologies says reports circulating today are wrong – it never offered to invest $500 million in Sina Weibo.

Sina introduced the service in August 2009; it already has 140 million users and plans to match Twitter’s 200 million. Leading Tencent, Baidu and Sohu (NSDQ: SOHU), Weibo has a 56 percent share (source: iResearch) of what is now a pretty active Chinese microblogging scene – perhaps surprisingly successful, given the country’s reputation for limiting online free speech.

Sina’s is one of several Chinese microblogging services, or “weibos”. The power of microblogs was epiphanically revealed to Chinese when, after a trend in which people post pictures of missing street kids, a father was reunited with his child recently. Now there’s local enthusiasm for using weibos to connect people with public services.

Weibo actually includes more features than Twitter, like groups and polling. But what could Weibo do in the west? Networks effects suggest Twitter has now locked up the microblogging market, is ahead of Weibo on monetisation strategy and the “Weibo” brand doesn’t necessarily trip of the tongue.

Weibo may well appeal to the millions of Chinese in western countries. Linking them with those in China could produce big effects for international sharing, freedom – and ad sales.

Zacks: “Blogging in eastern countries is considered to be a vehicle for keeping in touch with family and friends, while in the western countries (US and Europe) blogs are usually considered a publishing outlet. “We believe the (Japanese) partnership will help SINA to gain significant market share in Japan.” Sina Weibo proved very popular with Japanese who posted messages after March’s devastating earthquake and tsunamis.