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.