"We expect this investment, with the two parties' aligned interests at stake, will enable Alibaba to direct demand to Weibo, thereby helping accelerate Weibo's revenues in the next three years," said analyst Piyush Mubayi.
The call was part of a note on China Internet Technology. In the note, Mubayi discussed what he described as a "battle of the internet giants."
"Baidu, Alibaba Group, and Tencent ? armed with mass user traffic, ecosystem resources, and execution capabilities ? have emerged as contenders for next-generation leadership. This struggle will likely shape the industry landscape over the next 5-10 years," stated the analyst. "Following Alibaba Group's
partnering with Sina Weibo, Tencent Weixin's main competitor, the first
strategic battle has begun, and it is rightly taking place in social commerce."
Goldman has a Buy rating on Tencent. Baidu, Inc. (Nasdaq: BIDU) is rated Neutral.
"Alibaba-Weibo tie-up not a positive for Baidu given potential competition for long-tailed advertising demand. However, we believe Baidu, as the search leader, is well placed to defend its competitive presence among its core customer segments," said Goldman.
For an analyst ratings summary and ratings history on SINA Corporation click here. For more ratings news on SINA Corporation click here.
Shares of SINA Corporation closed at $57.54 yesterday, with a 52 week range of $41.14-$70.00.
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