SINA's (SINA) Looks to Have a Winner In Weibo
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Price: $43.26 --0%
Rating Summary:
9 Buy, 14 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 3 | Down: 6 | New: 20
Rating Summary:
9 Buy, 14 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 3 | Down: 6 | New: 20
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Auriga analysts suggest that SINA Corp.'s (NASDAQ: SINA) Weibo, a Twitter-like service, could be a “game changer” as it has become a phenomenon in China.
The analysts wrote in a report on Wednesday that Weibo can be monetized by SINA in multiple ways, which will in some ways be similar to Apple Inc.’s (NASDAQ: AAPL) AppStore, Twitter and Facebook, but Auriga points out that Weibo differs in many ways from the two most popular social-networking Web sites in the U.S.
"By studying Facebook, the App Store and Twitter, we believe: 1) social media is changing the way information is delivered and received, resulting in a change in online advertising; and 2) the social networking platform changes how money is made online."
Facebook and the AppStore allow money to be generated through being an enabling platform and consistently bring users back. Application developers are able to generate revenue on the open platforms, even though it is a revenue-sharing model.
Twitter is a service that is able to accurately match advertisers to viewers by getting messages to consumers without a middle man. The re-tweet service of Twitter also allows for a viral effect, bringing a message to more and more people after the first layer of followers. Auriga calls this a "many-to-many" type of social media.
Weibo differs from Twitter in the fact that it is a celebrity driven service, while Twitter and Facebook are populated by more grassroots users. Thousands of celebrities use SINA's service with each having about one million to two million followers.
"We believe Weibo can best be used for direct market or product promotion, aimed at increasing final transaction volume and awareness of a certain product," Auriga analysts stated. "Unlike the US, China has never used direct marketing, such as coupons in Sunday newspapers, etc. We believe Weibo can actually serve as a direct marketing tool, but with better reach rates due to its re-tweet nature"
Auriga has a Buy rating on SINA with a price target of $60.
Shares of SINA are up 3.09 percent to $46.03 in early market movement on Wednesday.
The analysts wrote in a report on Wednesday that Weibo can be monetized by SINA in multiple ways, which will in some ways be similar to Apple Inc.’s (NASDAQ: AAPL) AppStore, Twitter and Facebook, but Auriga points out that Weibo differs in many ways from the two most popular social-networking Web sites in the U.S.
"By studying Facebook, the App Store and Twitter, we believe: 1) social media is changing the way information is delivered and received, resulting in a change in online advertising; and 2) the social networking platform changes how money is made online."
Facebook and the AppStore allow money to be generated through being an enabling platform and consistently bring users back. Application developers are able to generate revenue on the open platforms, even though it is a revenue-sharing model.
Twitter is a service that is able to accurately match advertisers to viewers by getting messages to consumers without a middle man. The re-tweet service of Twitter also allows for a viral effect, bringing a message to more and more people after the first layer of followers. Auriga calls this a "many-to-many" type of social media.
Weibo differs from Twitter in the fact that it is a celebrity driven service, while Twitter and Facebook are populated by more grassroots users. Thousands of celebrities use SINA's service with each having about one million to two million followers.
"We believe Weibo can best be used for direct market or product promotion, aimed at increasing final transaction volume and awareness of a certain product," Auriga analysts stated. "Unlike the US, China has never used direct marketing, such as coupons in Sunday newspapers, etc. We believe Weibo can actually serve as a direct marketing tool, but with better reach rates due to its re-tweet nature"
Auriga has a Buy rating on SINA with a price target of $60.
Shares of SINA are up 3.09 percent to $46.03 in early market movement on Wednesday.
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