It seems Alibaba’s plan to buy a 15 to 20 percent stake of Sina Weibo (which just hit 400 million user accounts) has hit a little snag: no one can agree on a price. Morning Whistle, citing an “industry insider,” says that talks between the two companies have stalled because the Weibo team wants more money than Alibaba is willing to pay.
Although any story coming from the anonymous and vague “industry insider” should be taken with several dump trucks full of salt, this particular story would not be surprising if true. Sina has long felt that Weibo is one of its most valuable properties, but its financials have, as yet, failed to live up to the hype. Things are improving — weibo advertising revenue doubled during Q3 — but I suspect that what may be happening in the boardroom is that Alibaba is offering a price based on what is actually on the books, and Sina is demanding a higher price that reflects their beliefs about how valuable the service will be when they finally figure out how to monetize it properly.
I suppose we’ll have to wait and see whether these reports are even accurate, but it’s hard to see why Alibaba is even bothering. The company certainly doesn’t need the money, and I’m not at all clear on why a highly profitable e-commerce company would want to put its hands into the highly volatile, politically sensitive, and thus-far-not-that-profitable microblogging sector.
Anyway, here’s hoping the companies can work it out in the end so that they’ll have a chance to adopt the lovely logo I’ve designed for them (above).
[via Morning Whistle]