As people spend less time with their PCs, WeChat, known as Weixin in Chinese, gives Tencent a way to capture the explosive increase in the use of tablets and smartphones.

Despite its early lead in the mobile shift, Sina's advertising-driven business model ultimately won't keep pace with Tencent's e-commerce capability, said Cynthia Meng, a Hong Kong-based analyst with Jefferies Group Inc.

"Sina's mobile traffic is large but we're talking about positioning for mobile monetization," Meng said. "The first opportunities in mobile will come from games and mobile commerce" at which Tencent has a distinct advantage, she said.

Tencent gained 60 percent in Hong Kong trading last year, surpassing the 23 percent gain in the Hang Seng Index. Sina shares have declined 9 percent in New York.

Its core functions allow WeChat users to send texts, images or audio messages. The audio message function is similar to an application from WhatsApp Inc. WeChat's photo-sharing function called "Moments" operates with a timeline and cover-photo layout similar to that of Facebook Inc, which had more than 1 billion monthly active members as of Sept 30, including 604 million mobile users. The app's video conferencing ability is likened to Microsoft Corp's Skype.

Twitter Inc's messaging and social media service had more than 200 million monthly active users, the San Francisco-based company said on its website on Dec 18.

WeChat goes beyond those functions for keeping up with existing friends, providing ways to connect with new ones. The Drift Bottle function lets a user throw or pick up a random audio or text message. The interface has a picture of a stretch of beach under a blue sky, where users can pick up a bottle as a virtual hot air balloon drifts overhead. The user can respond to the message or throw it back.

Lai said he likes to use Drift Bottle daily even though it hasn't led to any meaningful new friendships yet.

"It's very unlikely for me to keep in touch with people I meet using the Drift Bottle," Lai said. "People usually just send back one response and the conversation ends there."

While the bottles go at random to any user around the world, there's also a way to meet people closer by with a function called Look Around that shows who's using the app in the vicinity. Users who meet each other this way can exchange contacts wirelessly by shaking their phones.

"WeChat is a killer app," said Alicia Yap a Hong Kong-based analyst at Barclays Plc. "WeChat seems to capture human behavior. Once people use it - and all their friends use it - they need to continue to use it."

Tencent vs. Sina

Sina sells smartphones to for profitability

Gossiping about the future on the Internet

Tenpay to serve Weixin users

Sina, Tencent set to intensify online tussle

Sina reshuffle focuses on Weibo

Sina eyes new ad system on Weibo