Sina dismisses rumors of Alibaba purchase
Updated: 2012-12-25 17:04
By Chen Limin (chinadaily.com.cn)
Chinese Web portal operator Sina Corp has said it's micro-blogging service Weibo has normal business relations with e-commerce giant Alibaba Group Holding Ltd, and dismissed rumors that Alibaba may be buying a stake in the service.
Rumors have suggested that Alibaba plans to buy a 15 to 20 percent stake in Sina Weibo, the most popular micro-blogging service in China, for around $3 billion, according to a report of newspaper China Business News.
Sina's stock price rose 7.81 percent on Nov 19 to $48.59 on the back of the rumor. The rise indicates investors' concerns over whether the popular micro-blogging service, Sina Weibo, can be a strong revenue generator amid slower user growth and fiercer competition.
Sina told China Daily the rumor is false. Alibaba declined to comment.
While the growth of Web portal operators has slowed in recent years because of the impact of other Internet services, Sina's stock rose as high as $142 in April 2011, when the popularity of Sina Weibo boosted investor confidence.
However, as the service failed to generate revenue as quickly as investors expected, Sina's stock price continues to decline, reaching $47.31 on Dec 24.
Sina Chief Executive Officer Charles Chao said Sina Weibo was faced with greater competition, especially by rival Tencent Holdings Ltd's service WeChat, whose increasing popularity on mobile devices poses a potential threat to Sina Weibo.