Weibo-Alibaba teaming up a good idea - Wei Gu

Wei Gu

The announcement that Alibaba, the China's largest e-commerce company, buys a minority share into Sina Weibo, the Chinese equivalent of Twitter, is a win-win situation for both, writes financial analyst Wei Gu in Reuters' Breakingviews. Wei Gu:

Micro-blogging service Twitter is powerful in shaping public opinion, but weak at monetizing its 400 million person user base. Alibaba could help. Its Taobao and Tmall commerce sites are popular with small businesses, who could be incentivised to pay for sponsored sites on Sina’s micro-blogging service. Alibaba might benefit too, by directing more high quality Weibo users on to its shopping sites. 

Getting an anchor investor may also be the first step in a Weibo spin-off. Sina’s chief executive has said the company is considering such a move, to help Weibo garner a better valuation. An Alibaba investment would give an indication of value. The $3 billion valuation mooted in Alibaba’s talks compare with analyst estimates from $1 billion by Goldman Sachs to $4 billion by Credit Suisse.

More in Reuters' Breakingviews.

Wei Gu is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers' request form.

This week, on November 22, the China Weekly Hangout is about the future of nuclear power in China. You can register at our event page here. (Two weeks earlier we missed the change in daylight saving time in the US and had to cancel.) First part will focus on the resumption of building nuclear power stations, the second part of the chances NIMBY protests can derail this ambitious program. Planned participants: Richard Brubaker and Chris Brown.

You can access all editions here.

What might be the chances of China's internet companies to enter a global market? The China Weekly Hangout discussed in November 2012 the cases of Baidu, Tencent and Alibaba, featuring Steven Millward of TechinAsia and Fons Tuinstra of the China Speakers Bureau.

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