Sina(SINA-commentary-Trade Now) reported its earnings last night, and news services accordingly showed their collective ability to cut and paste from the press release, letting you know that the company beat on revenue but came up a bit short on earnings per share. Sina also guided conservatively for the coming quarter on revenue, with the bottom end of the range dipping below analysts' current estimates.
But all that information, which is normally most important for investors, is really irrelevant for Sina -- and it has been so for at least the past six months.
What investors this morning care most about is the growth in Weibo-registered users. Last night, Sina announced this number had recently surpassed 140 million, with 150,000 "verified" users (of which I'm proud to be one). These figures were all as of April, up from 100 million in late February, when the company last reported earnings. So this represents a gain of 40 million new users in two months. Previously, conventional wisdom was that Weibo growth came to 10 million a month. It's actually double that.
CEO Charles Chao also reiterated that the company was continuing to invest a lot in engineering, headcount (censors) and marketing this year. This should ensure that Weibo holds on to a significant share of the social-networking market in China.
Monetization still isn't top priority for Weibo. Still, Chao has hinted at a six possible business models being examined to generate user-based-derived revenue in the months and quarters ahead.
In my view, Chao is doing exactly the right thing. Investors shouldn't be nervous about extra costs related to building out the internal infrastructure in support of more Weibo users. They also shouldn't worry about if revenue is lighter this year, even though sales have certainly grown in comparison with last year's numbers.
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