* Real-name registration already hurting new user signups
* Platform investments will crimp Q1 results
* Sees Q1 rev $101 mln-$104 mln vs est $113.7 mln
* Shares down 4 pct
By Melanie Lee
Feb 27 China's Sina Corp said
government regulations forcing users of its Weibo microblogging
platform to register their real names, coupled with new
investments for the popular site, will hurt its profits for this
Sina posted a quarterly profit on Monday in line with
analyst estimates, but forecast a disappointing first quarter,
sending its shares down 4 percent in after-market trade.
Weibo, like Twitter in the United States, is a platform that
allows users to post messages of up to 140 characters. Investors
have been bullish on the platform's prospects, but the
government requirement forcing new and existing users to
register their real identities has dampened the outlook.
Sina aims to monetise Weibo this year by selling ads and
employing other fee-based services, but the new regulations
could result in fewer users and thus a less attractive venue for
"We believe the requirement to convert existing users into
verified users...will have a negative impact on user activity in
the short term," Charles Chao, chief executive of Sina, said on
an earnings call with reporters and analysts.
Chao said the regulations had already affected potential new
users. Of the total attempting to pass the verification process
since December, only 55-60 percent succeeded. He did not
disclose the specific numbers involved. The platform currently
has about 200 million users, according to company figures.
"These people will still be users, but in a very
dramatic scenario, they will not be able to speak, meaning they
won't be able to post messages," Chao said.
In 2011, Weibo emerged as a social media force to be
reckoned with, providing an outlet for Chinese Internet users to
vent on a wide range of topics, including some that Beijing
deems sensitive such as official corruption and the status of
The new rules were issued in December and have a three-month
implementation timeframe, after which users that are not
verified will not be allowed to post messages.
"We cannot rule out any new tightening policies that may be
introduced in the future which may further impact the user
growth and activities in a negative way," Chao said.
The company also said it would also continue to invest in
the platform. Sina invested $110 million to $120 million in the
Weibo platform in 2011. The firm hopes that by the second half
of the year, Weibo will be able to generate meaningful revenue,
although investments may offset those gains.
"For the whole year, as we continue to invest in our Weibo
platform, our operating results may continue to suffer as
incremental costs for Weibo investments may still be significant
on a year-over-year basis," Chao said.
Sina estimated first-quarter revenue in the range of $101
million to $104 million. Analysts were expecting revenue of
$113.7 million for the period, according to Thomson Reuters
Fourth-quarter net profit was $9.3 million, or 14 cents a
share, compared with a loss of $100 million, or $1.51 a share, a
year ago. Excluding one-off items, the company, which competes
with Baidu.com Inc and Sohu.com Inc, earned 21
cents a share. Revenue rose 21 percent to $133.4
Analysts on average expected earnings of 21 cents a share on
revenue of $129.3 million. Shares of the Shanghai-based company
closed at $62.95 on Monday on the Nasdaq.