This morning, Sina’s (NASDAQ:SINA) quarterly earnings call turned more than a few heads. The company actually posted a profit, but is forecasting a less pleasant Q1 2012 thanks to the approaching real-name registration deadline as well as some additional investments in the weibo platform. CEO Charles Chao said of the impending deadline:
We believe the requirement to convert existing users into verified users [...] will have a negative impact on user activity in the short term.
He did announce some good news, too — Sina Weibo has broken the 300 million user mark — but judging from the comments on Twitter this morning, most people seemed to feel that Mr. Chao sounded downbeat.
For a great summary of the whole thing, read through Digicha’s post with a rundown of @niubi’s tweets throughout the call, but here are a couple really significant ones:
$SINA CEO predicts 10-20% of new users may drop out real name registration process. then 40-45% of those who try will fail verification
— Bill Bishop (@niubi) February 28, 2012
$SINA CEO: initial response rate 2 trying get existing users 2 upgrade 2 real name has been “quite low”. lots of “uncertainty” & “hopefully”
— Bill Bishop (@niubi) February 28, 2012
interesting $sina will now focus disclosure on active user %. that #likely go up as real name kills off spam/inactive accounts. spinnable
— Bill Bishop (@niubi) February 28, 2012
That last point is especially significant, as it seems to indicate that Sina expects the actual number of active users to drop significantly. It also sounds like the site may not hit the March 16th deadline for forcing existing users to register or get out, but real-name is coming sooner or later, and clearly Sina expects to take a big hit on overall active user numbers. Active user percentage is the only statistic that’s likely to go up since whatever else the real-name requirement does, it is likely to cut down significantly on fake accounts.
Meanwhile, it remains unclear whether or not foreigners will be able to use the service at all after the cutoff. I have heard from a few people that they’ve been granted the “V” verification just in the past few days, and anyone who has that is good to go. But my own account remains unverified, and an attempt to register my real name earlier today resulted in a double failure: Sina’s system wouldn’t accept my passport number or my crazy foreigner name.
Of course, not having many foreigners is very unlikely to impact Sina’s bottom line. But it could be a significant annoyance for foreign businesses looking to market to the Chinese internet community, not to mention entrepreneurs and other foreign users who want to be able to interact with Chinese users via social media.
In any event, we’re keeping an eye on Weibo and activity levels there as the March 16 deadline approaches (assuming Sina hits it). The conversion numbers certainly don’t look good, but we won’t know for sure how things are going to look until it’s happening.
Is there really a weipocalyse coming, or am I blowing things out of proportion? Place your bets in the comments.