RealTime IT News

SINA Nabs MeMeStar

SINA , a San Mateo, Calif.-based information service provider for China and Chinese communities, Monday moved to acquire wireless service provider MeMeStar for $20.8 million in cash and SINA shares.

SINA said the purchase will help it double its wireless revenue, add two million paying subscribers, triple its nation-wide sales force for wireless business, and expand its service offerings. The media company based its logic on the notion that China has seen tremendous growth in the usage of Short Messaging Service (SMS) in the last two years, no doubt propelled by an increase in the number of mobile phone subscribers (which topped 200 million in 2002).

The CCID, a consulting group affiliated with the Chinese Government's Ministry of Information Technology and Telecommunication, said mobile data usages is expected to enjoy a 100 percent average annual growth over the next several years surpassing Internet usage.

MeMeStar, also known as "Xunlong," has 160 employees with service coverage areas spanning over twenty provinces in China. SINA said the concern has developed strong market presence in the Southern and Eastern provinces of Guangdong, Zhejiang and Jiansu, where the combined mobile user base surpasses 50 percent of the total China mobile user base.

SINA CEO Daniel Mao said the acquisition will help transform SINA's wireless business model from a mixture of subscription and usage based services to a predominantly subscription based model.

"Wireless service has been one of the fastest growing segments of our business. Over the past several quarters, we have seen an average fifty percent growth in this business quarter on quarter as more and more of our 50 million strong web users in China took to our wireless services," said Mao.

The transaction is subject to customary closing conditions including regulatory approvals and is expected to be completed in the first quarter of 2003.