Sina's Growth Strategies in China

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Case Details:

Case Code : BSTR183
Case Length : 12 Pages
Period : 2001-2005
Organization : Sina Corporation
Pub Date : 2005
Teaching Note : Not Available
Countries : China
Industry : Online Media and Mobile Services

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EXCERPTS

The Initial Years

Wang's Silicon Valley trip convinced him that SRS would derive its revenues in future from Internet based businesses. He began work on a version of RichWin that would allow Chinese characters to be displayed on web browsers.

This version was released in the market in early 1996. In April 1996, Wang launched SRSnet.com, a website providing support for SRS software.

An electronic bulletin board was also added to the website for customers to report bugs in the company's software products. However, the bulletin board soon became a forum for users to discuss sports, current affairs and relationships. At the end of 1996, the website had 20,000 registered users...

Diversification Of Services

The number of Internet users in China skyrocketed from 4 million in June 1999 to 16.9 million in June 2000, registering a 323% increase. Sina's network of portals was designed to attract these users as well as those in other Chinese speaking countries. Sina's network of portals spanned four websites catering to online Chinese audiences in China, Taiwan, Hong Kong and in North America. The number of hits on Sina's four websites increased from around 5 million in June 1999 to 34 million in June 2000...

Non-Advertising Revenues

The growth of mobile telephony in China presented Sina with an opportunity to provide mobile users new services and realize revenues from it. China had 85 million mobile subscribers in 2000. This number was expected to rise to 150 million by the end of 2001 and to 200 million users by the end of 2002. A study conducted by IDC forecasted that this figure could reach 325 million by the end of 2005. In 2001, Sina began offering content based services for mobiles that were delivered through SMS.

The Road Ahead

In its effort to further increase the revenues from MVAS, Sina began acquiring companies that provided mobile content in China. One such acquisition was Memestar. This acquisition was completed in January 2003 for $20.8 million. It gave Sina an additional two million mobile content subscribers. Another significant acquisition that Sina made was Shenzhen-based Crillion Corporation. The acquisition announced in early 2004 involved payment of $125 million in both cash and stock by Sina.

Exhibits

Exhibit I: Sina – consolidated statement of income (2000-04)
Exhibit II: Sina's share price chart