Sina Corporation is considering a U.S. IPO of its Sina Weibo microblogging service, a competitor to Twitter, Reuters reports.
The stock offering could blunt the global ambitions of Twitter: Weibo already has more than twice the number of users that Twitter has, and Twitter only has 187 million non-U.S. users — a fraction of Weibo’s non-U.S. presence.
The New York Times estimates the stock offering could be worth about $US5 billion. That would give Weibo a warchest to fuel its expansion in Asia — making it even harder for Twitter to make further inroads there.
Chinese citizens can use Weibo to write 140 character posts, chat or mention people with the ‘@username’ format, add hashtags, and more talk about news or voice their opinions relating to the government.
The recent acquisitions of WhatsApp ($19 billion)and Viber ($900 million) have placed added emphasis on social networks and messaging services.
In China, Sina Weibo has to contend with Internet conglomerate Tencent’s messaging app WeChat which boasts 300 million users, while China’s other tech powerhouses like Baidu and Alibaba have spent billions on various startups making this sector of the industry increasingly crowded.
Another threat to Sina Weibo’s growth has been the oppressive censorship policies of the local government. Quartz writes that Chinese citizens have to had to deal with censors forcing posts on forbidden topics to be taken down immediately.
Ultimately, these Chinese companies could see a big opening in the U.S. Millions of people use apps like WhatsApp and Japan’s LINE to to talk with friends all over the world for free. Before Facebook bought WhatsApp, it had little name brand awareness and barely made money in America. Now its one of the most popular apps in the U.S. app store.