3 reasons NOT to invest in LinkedIn IPO

The vast majority of LinkedIn’s members rarely ever visit the site – a fact that has some investors turning their noses at the company’s upcoming IPO.

The social networking site for professionals and job seekers, LinkedIn.com, has valued itself at $3 billion in the run-up to its IPO. That’s about 12 times 2010 revenue (per Reuters), and that makes it a bargain compared to some of the Chinese tech IPOs we’ve seen of late. RenRen, for instance, is trading at 76 times revenue. The relatively low valuation for LinkedIn has some investors second guessing big bets on the company’s prospects for growth. Here are three reasons why it might be a good idea to park your cash somewhere other than in the LinkedIn IPO:

1) Niche audience. LinkedIn caters to a very specific subset of the population: job seekers and professionals eager to network. While that makes the site a great marketing tool for recruiters and companies eager to fill white collar jobs, it also automatically puts a cap on the site’s potential audience. Since companies like Twitter, Facebook and RenRen don’t target specific niches, their long-term growth prospects aren’t nearly as limited.

2) Not profitable yet. Don’t look for LinkedIn to start posting profits this year. The company’s said as much in its IPO filing: “We expect revenue growth rate to decline, and as we continue to invest for future growth, we do not expect to be profitable on a GAAP basis in 2011.” LinkedIn plans to ramp up hiring and re-invest in rolling out new features on the site instead. If those features are successful in substantially boosting traffic and membership on the site, profits could be just around the corner … That is, however, a big “if” (just as it is for Facebook, Twitter and RenRen). Albert Babayev as SeekingAlpha believes the company’s revenue multiple will fall below where it is today (to 7x or maybe even 5x) in the coming years. That means it’ll be worth less than what it’s trading for even now on private exchanges.

3) Plateauing growth. Pageviews at LinkedIn appear to have flat-lined since the start of the year:

Source: Alexa.com

Babayev actually points out an even more damning fact: the vast majority of LinkedIn’s members rarely ever visit the site. “LinkedIn has 1% of total Facebook visits, while boasting to have an equivalent of 16% of Facebook users,” he writes based on stats from Compete.com. It’s clear then that LinkedIn is far less sticky (about 15 percent less) than Facebook. Squeezing more dollars our of the same audience is a daunting task.

Despite these arguments against investing in a LinkedIn IPO, I’m still fairly bullish on the company. It’s model isn’t nearly as reliant on advertising as that of rivals like Facebook and Twitter. Last year, LinkedIn generated the bulk of its revenue (41 percent) by selling job listings on the site. The rest came from a mix advertising (32 percent) and premium subscriptions (27 percent). Multiple revenue streams ensure the company will have cashflow to fund new features and grow it’s membership base. In the end, though, investors will have the last say, and I imagine they’ll welcome the stock with open arms. A year or two down the road, LinkedIn’s future looks a lot more murky.

LinkedIn IPO Date: A specific date has not yet been set, but it will likely be within two weeks.

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RenRen IPO: 5 things you don’t know about ‘China’s Facebook’

While the mainstream media has flooded the tubes with news stories on RenRen, here are five things you might not have known about the “Facebook of China.”

RenRen’s IPO date has arrived. Shares in the “Facebook of China” will begin trading today (May 4, 2011) on the NYSE under ticker symbol “RENN.” The whole affair has the feel of being backstage before a Justin Bieber concert, which is to say traders are giddy.

Finally, we’ll get to sink our hands into a genuine social networking stock. Better yet, it hails from behind the Great Firewall in the world’s largest Internet market. Expect fireworks.

While the mainstream media has flooded the tubes with news stories on RenRen, here are five things you might not have known about the “Facebook of China”:

1) Pony up for those brand pages. RenRen may have copied the master (Facebook) in the beginning, but it’s taken a slightly different tact toward advertising. Rather than giving away “fan pages” to businesses for free, RenRen charges companies upwards of $90,000 to launch branded “mini-sites” on RenRen. That’s one way to solve the revenue problem that’s hanging over Facebook’s head.

2) It’s messy behind the scenes. News broke yesterday that one of RenRen’s audit-committee chairmen was stepping down after alleged financial fraud at a different Chinese tech company where he serves as CFO. Perhaps that’s not a big deal (since it stems from allegations at a different company), but this might give you pause: RenRen’s had trouble spitting out just how many users the site has. First, they claimed user growth of 29 percent during Q1. A week and a half later, the social networking site backpedaled, saying growth was actually more like 19 percent. Hmmm… As it stands right now, RenRen claimed to have 117 million activated users as of March 31, 2011. Take it for what it’s worth.

3) Strength in numbers. The PRC is home to the world’s largest Internet market with more than 420 million Web users, according to Internet World Stats. That’s nearly twice the number of surfers in the U.S., and China’s Internet penetration rate is just 31 percent! Compare that to the U.S., where 77 percent of the population has Web access. Clearly, the Internet growth story moving forward is going to be told on the other side of the Pacific.

4) Coupons anyone? RenRen operates a Groupon-style deal of the day clone at Nuomi.com. Launched last summer, Nuomi’s already a Top 200 site in China (per Alexa), but it does face stiff competition. The Xinhua News claims there are already more than 2,600 group buying websites in the PRC. Fortunately, RenRen’s IPO warchest might help the company market Nuomi. Execs appear more than willing to do just that as they announced plans to spend more than $30 million in advertising the site in February. They won’t lose the Groupon war without a fight.

5) Multiple social networks in one. Early in April, RenRen launched a second social networking site dubbed “Jingwei.” Jingwei targets professionals who are interested in networking opportunities. If it catches on, we might not have the opportunity to invest just in the “Facebook of China” but the “LinkedIn of China” and the “Groupon of China,” too – all in one stock. What more could you ask for in a country where only the privileged few have access to shares in Facebook, Twitter, Groupon and LinkedIn?

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5 reasons NOT to invest in the RenRen IPO

“The Facebook of China” is probably too tempting of a stock to pass up, but there are still warning signs that warrant acknowledgment before you invest in RenRen’s IPO.

Let me preface this by saying I’ve drank the RenRen Kool-Aid. How could any self-respecting geek turn down the opportunity to invest in the first major U.S. IPO for a social networking stock – especially one that’s being dubbed “the Facebook of China”? Still, there are warning signs that warrant being pointed out (even if you ultimately decide to ignore them in what will probably be a feeding frenzy on IPO day):

1) Competition. As it stands now, Facebook.com is blocked by the Chinese government. Rumors are running rampant that a partnership with Baidu.com, Inc. (NASDAQ:BIDU) – China’s largest search engine – is imminent, though. That could be bad news for RenRen. Who needs a Facebook clone, after all, when you can get the real thing? That said, I’m still not sure Facebook’s willing to turn information on its users over to the Chinese government – particularly if those users end up “disappearing” a few days later. Even if Facebook does decide to move ahead, it won’t happen overnight.

2) How many users do we have? One of the more puzzling pieces of the RenRen IPO is trying to figure out how many people use the site. RenRen itself can’t seem to spit out an accurate number. On April 15, the company claimed monthly uniques grew 29 percent (up 7 million users) during Q1 2011, per the Daily Times. Then, on April 27, RenRen back-tracked saying that monthly uniques were actually up just 19 percent (or 5 million users) during Q1. Weird…

All told, RenRen claims to have 117 million activated users as of March 31, 2011. Sources outside the company including Beijing’s Analysys International had previously reported the site has as many as 160 million registered users. I guess estimates will have to suffice.

3) Accounting abnormalities. “Prior to this offering, we have been a private company with limited accounting personnel and other resources for addressing our internal control over financial reporting,” RenRen writes in its F-1 filing with the SEC. An independent review of the company’s accounting procedures turned up “one material weakness and one significant deficiency.” Namely, the company has “insufficient accounting personnel with appropriate U.S. GAAP knowledge,” no stated plan for investing cash surpluses, and poor management of “treasury functions.” That makes RenRen the sort of company that embezzlers and fraudsters love. And fraudsters aren’t in short supply in China (take, for example, the recent news that the CEO of China’s Puda Coal secretly sold the company and forgot to mention that fact to shareholders).

4) PengYou. Ultimately, RenRen’s biggest competitor might not be Facebook, but rather a homegrown rival in PengYou.com. Two weeks ago, analysts at Goldman Sachs went on the record proclaiming PengYou will “become the dominant social network in China by leveraging (Tencent’s) much larger QQ community and more developed platforms.” Although PengYou launched just five months ago, it’s already the 26th most-visited site in China (check out my post RenRen IPO’s biggest hurdle might be PengYou for more).

5) What are ethics? When RenRen first launched in 2005 as XiaoNei.com, the company labeled itself a “Mark Zuckerberg production.” Zuckerberg, the CEO of Facebook, had nothing to do with the site, of course, but that didn’t really matter to RenRen’s founders. They just made a copy of Facebook and pushed it live. RenRen has something of a reputation for stealing ideas. When Kaixin001.com launched a social networking site in China, RenRen copied it (all the way down to the color scheme) and launched the doppelganger on Kaixin.com. Kaixin001.com eventually won a lawsuit against RenRen, but you can still type in Kaixin.com and get re-directed to RenRen.com. Maybe nice guys do finish last, after all.

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Facebook stock powers growth at SecondMarket

People want Facebook shares, and SecondMarket’s one of the few places they can get them, no matter what the price may be.

Business is booming at SecondMarket.com. The secondary exchange lets high-net-worth investors buy and sell shares in private companies including some of the tech world’s brightest lights; companies like Twitter, Facebook, Zynga and Groupon.

Over the past six months, the number of SecondMarket participants surged 152 percent to 53,000. Most of that’s thanks to interest in buying Facebook stock.

Facebook shares, which trade in weekly eBay-style auctions on the site, accounted for more than 40 percent of SecondMarket’s transactions last month, according to Bloomberg Markets.

While most of us would probably love to get our hands on some pre-IPO Facebook shares, there’s little transparency and even less liquidity on secondary exchanges. That’s one of the reasons we’ve seen eye-popping valuations on Facebook. One of SecondMarket’s largest competitors, SharesPost, cautions investors against blindly buying stock in trendy private companies.

In a single day of trading in January, SharesPost points out one group of investors bought a block of Facebook shares for less than $30 each. The same day, another group of investors spent $60 a share for Facebook stock.

Without access to proper financial statements, investors are taking on significant risk when they wade into secondary exchanges. And now it appears the SEC may be considering relaxing rules to make secondary trading easier. Bloomberg Markets reports that SEC Chairman Mary Schapiro indicated as much in a letter to California Representative Darrell Issa.

Schapiro wrote that she was considering raising the limit on the number of shareholders a private company can have without reporting financial information to the commission. That number’s currently 499. If it’s raised significantly, volume on private exchanges will likely spike as employees at companies like Facebook and Twitter may be given more leeway to sell off shares they’ve accumulated.

That would probably drive up Facebook shares higher – even without an accurate look at the company’s earnings and financial prospects. It doesn’t seem to matter right now, though.

“People aren’t buying Facebook for its revenues in 2010,” Wedbush Inc. analyst Lou Kerner tells Bloomberg Markets. “They’re buying it for what it’s going to be doing in 2015. We believe if it were public, it would be worth in excess of $100 billion.”

People want Facebook shares, and SecondMarket’s one of the few places they can get them – no matter what the price may be.

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As RenRen’s IPO date approaches, the so-called “Facebook of China” may face stiff competition from Baidu.com, Inc. (NASDAQ:BIDU), Facebook and Tencent Holdings Ltd. (HKG:0700).

With RenRen’s IPO date looming on May 4, investors are salivating over the first major social networking site to hit American stock exchanges. The so-called “Facebook of China” may face stiff competition in the months to come, though, as both Baidu.com, Inc. (NASDAQ:BIDU) and Tencent Holdings Ltd. (HKG:0700) have moved to aggressively ramp up their social marketing efforts in China.

China’s largest search engine, Baidu.com, is well-known among investors. Shares in the company debuted on the Nasdaq in 2005, and they’ve risen more than 1140 percent since. Earlier this month, Facebook announced rumors surfaced that Facebook struck a deal with Baidu to launch a new social networking site in the country (per MSNBC). No launch date has been announced (if it does indeed come to pass), but the companies will reportedly work together to build a new social networking site from scratch, as Facebook.com remains blocked by the Chinese government.

A partnership makes perfect sense. Baidu currently owns 73 percent of the search market in China but has struggled to succeed in the social networking space. The site’s reach should help it heavily promote a new social networking venture much the way Google has done with its Chrome Web browser. Facebook benefits from Baidu’s close working relationship with the Chinese government – something its needed to get past the Great Firewall.

Time is of the essence, though, and Tencent already has a head start on Baidu. Tencent operates the world’s largest online community with its wildly popular instant messaging platform, Tencent QQ. QQ claims more than 636 million active users. To put that in perspective, that’s more than twice the population of the U.S.

Tencent’s earliest foray into social networking started in 2009 with the launch of XiaoYou, a Facebook-like platform targeted at students. XiaoYou allowed users to create profiles based on nicknames (rather than real names) much like MySpace.com. We saw how well MySpace played out here, and Tencent must have taken notice.

The company scrapped XiaoYou last summer in favor of a new “real-name” social networking site dubbed PengYou (per TechRice). When PengYou launched public beta testing in September, invites were extended to employees at publicly-listed Chinese companies, including Fortune 500 companies in China, TechRice writes. By December, the site fully opened up to the public, and an Open API was released so that developers could write custom software for PengYou.

The site allows users to sync up with their QQ accounts and their SINA Weibo microblogging accounts (think the “Twitter of China”). Investors like those ideas. Late last week, analysts at Goldman Sachs actually downgraded SINA Corporation (NASDAQ: SINA) from Neutral to Sell citing a belief that SINA’s Weibo won’t be able to compete with full-scale social networks like PengYou.

“In our new analysis, we believe the most likely outcome is for Weibo to become an alternative loosely-engaged social network weighted toward its distinctive social media elements, and for Tencent Pengyou to become the dominant social network in China by leveraging its much larger QQ community and more developed platforms,” Goldman writes.

Since its launch in December (just five months ago), PengYou has grown rapidly. The social network’s currently ranked by Alexa.com as the 26th most-visited site in China. That puts it in striking distance of RenRen.com, which is ranked as the 15th most-visited site in China. It’s clear we’re witnessing the start of what promises to be a dogfight over social networkers in China. Tencent, Facebook and Baidu have entered the race late, but the finish line is a long way over the horizon.

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Crowdcube: How to invest in tech startups

Crowdcube.com gives investors the opportunity to invest as little as £10 ($16.40) in private tech start-ups long before they’ve hit the IPO stage.

There’s something infuriating about getting locked out of investing in high profile tech companies like Facebook and Twitter by virtue of being too broke. If you’ve got a net worth of $1 million or more, you’re more than welcome, though, to sign up to buy shares in Facebook and Twitter via secondary exchanges like SecondMarket.

A small UK-based Web site is trying to change that with last month’s launch of Crowdcube.com. The site gives UK investors the opportunity to pony up as little as £10 ($16.40) to invest in private tech start-ups and small businesses long before they’ve hit the IPO stage.

“We want to enable people to have a real share – real equity in the business,” Luke Lang, one of Crowdcube’s co-founders tells GrowthBusiness. “We want to make investing open to everyone so that the ordinary man or woman in the street can invest in a limited company.”

Crowdcube takes Kickerstarter.com, which allows individuals to contribute cash to creative projects in exchange for gifts or recognition, a step further by offering up the real deal: equity. Prospective investors can peruse fully-developed, vetted business plans and video pitches as well as interact with entrepreneurs in Crowdcube’s forums before deciding to invest.

Pretty snazzy. As of today, there are 13 start-ups soliciting investments on Crowdcube. They range in scope from an online auction software developer to a mobile advertising company and a “Fairtrade certified bodycare products” manufacturer.

The business plan that has me most excited, though, is Crowdcube’s itself. The company’s currently waiving its £250 ($410) listing fee for entrepreneurs. If a start-up hits its funding goal, Crowdcube skims 5 percent off the top in addition to a £1750 ($2,871) legal fee. A lot of 5 percent cuts could quickly add up if Crowdcube hits critical mass. Now, I just wish the site would offer up equity in itself for early-stage investors.

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RenRen’s IPO easily makes my list of the Top 3 IPOs of 2011. It’s up there with LinkedIn and Yandex. Not sold? Here are three reasons that might change your mind.

I’ve been excited about this for months. Back in February, I wrote a post titled Five reasons to invest in the RenRen.com IPO, and now it looks like we’re getting really close to launch. Here are three more reasons to consider investing in RenRen’s IPO:

1) The writing on the wall. Sometimes, all it takes is investor excitement to push up the value of a stock – even in the absence of underlying fundamentals. Let’s take Youku.com, for example. Shares in the so-called “YouTube of China” IPO’d around $33 in December. Despite revenue of just $23 million and a loss of $5.6 million in the three months ending Dec. 31, shares have risen nearly 100 percent since debuting on NYSE. That puts Youku’s stock at more than 110 times annual revenue! Those are mind-boggling numbers for a company with scanty revenue and a hell of a lot of competition.

It’s hard to deny that Yoku’s trading on much of anything beyond investor exuberance, and I expect the exuberance for the “Facebook of China” to far outpace that of the “YouTube of China” – especially since even a company as large as Google (NASDAQ:GOOG) has had trouble making money with YouTube.

2) Several companies in one. Not only does RenRen operate the most popular “real name” social network in China, it’s also ventured into the professional social networking space with the launch of a LinkedIn-style network dubbed Jingwei (Read more in my post: RenRen readies for IPO by launching second social networking site, cloning LinkedIn). They didn’t stop there, though. The company also operates a Groupon-style deal of the day clone at Nuomi.com. Granted Nuomi’s one of a reported 2,612 group buying websites in China (per the Xinhua News), but RenRen’s parent company is serious about seeing Nuomi succeed. They announced plans in February to pour $30.42 million into advertising the new venture.

3) The fat part of the curve. China’s Internet growth feels a lot like the U.S. tech bubble, except for the fact that there are already lots of Chinese tech companies making real money. The online advertising market in the PRC is expected to triple through 2014 to nearly $13 billion, according to Susquehanna International Group LLP. By contrast, online advertising grew just 15 percent in the U.S. last year, per PCWorld. As advertising rates surge, the biggest beneficiaries will be social networking sites with their warchests full of invaluable data on their users. From ages to location to tastes in music and relationship status, RenRen knows more about their users than Baidu, and – if the company continues to expanding its user base – that could make RenRen even more valuable to advertisers.

Fred’s Best Guess: RenRen easily makes my list of the Top 3 IPOs of 2011. It ranks up there with LinkedIn and Russian search engine Yandex. I expect choppy (dangerous) trading for the first few days, and a steady skyward march after that. I say dollar-cost-average your way into the stock, and hold it for a year to latch onto what could very well be triple-digit gains.

Note: Fred’s Best Guess is just that: a complete guess. It does NOT constitute investment advice and should NEVER be construed as such.

RenRen IPO Vitals

RenRen expected IPO date: May 4, 2011.
RenRen ticker symbol: NYSE:RENN

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Silver Wheaton predicts mining deals once silver prices stabilize (SLW)

One of the hallmarks of a mania is an rapid increase in the number of leveraged buyouts — something we haven’t seen yet. Silver Wheaton’s (NYSE:SLW) CEO Randy Smallwood has an explanation why.

One thing we’re yet to see silver’s ongoing bull market is a flurry of corporate buyouts and acquisitions. One of the hallmarks of a mania, after all, is a rapid increase in the number of leveraged buyouts.

Silver Wheaton Corp.’s (NYSE:SLW) brand new CEO Randy Smallwood offered an explanation yesterday in an interview with the Financial Post: small caps are reluctant to sell out of fears silver prices could hit $50 in the coming months.

Think of it like Groupon turning down a $6 billion buyout offer from Google (NASDAQ:GOOG). Why sell for enormous sums when you stand to make even larger sums down the road? “We’ve been talking with a lot of potential partners, but they want to see some [silver price] stability,” Smallwood told the Post. “They don’t want to look stupid two months from now.”

Silver Wheaton’s biding its time, then, as it waits for prices to level off before swooping in and acquiring the “silver streaming” deals that turned it into a money-minting titan. With its streaming model, Silver Wheaton gives gold and base metal miners cash up front to fund the development of mines. In exchange, SLW gets the right to buy byproduct silver at cut-throat rates – right now, that rate’s about $3.90 an ounce, per the Post.

Until silver prices stabilize, there aren’t many companies eager to take a loan from SLW, but that’s quite all right, Smallwood says. Silver Wheaton has the luxury of waiting. Even without any acquisitions, the company’s attributable silver production should spike 60 percent through 2015 to 43 million ounces a year.

The whole thing reminds me of Sean Parker urging Facebook CEO Mark Zuckerberg to take things slowly in the 2010 film, The Social Network.

“A million dollars isn’t cool,” Parker says. “You know what’s cool? A Billion Dollars.” By refusing to sellout for relatively small sums, Facebook’s since morphed into a multi-billion dollar company that sprawls across most of the globe.

It’s hard to argue with Parker’s logic. The deals will come in time. The same is true for the mining industry’s unsung heroes. Why take a check today when you might get one with a few more zeros in a year?

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Facebook + Baidu vs. Renren: Let the war begin (BIDU)

Facebook’s partnership with Baidu (BIDU) will finally smuggle the social networking site behind the Great Firewall; a place where few other foreign social networks are able to tread.

The ante’s been upped in China’s social networking wars. Facebook plans to partner with China’s largest search engine Baidu.com, Inc. (NASDAQ:BIDU) to build a social networking site from the ground up. The move would smuggle Facebook behind the Great Firewall – a place where few other foreign social networks are able to tread.

Shares in BIDU rose nearly 5 percent in pre-market trading on the news although it could be a while before Facebook.cn becomes a reality. “If there is a deal, it must still make it over some imposing regulatory hurdles in China, and it will attract some attention from Capitol Hill,” writes Gady Epstein at Forbes.

Epstein’s optimistic the deal will ultimately work, though, as Zuckerberg appears “fully committed to make the kinds of concessions to do business in China that did not come so easily for Google.”

China’s social networking market is particularly brutal. Renren.com claims 160 million active users in the PRC, and it got its start as a Facebook clone. It was such a perfect clone that it matched Facebook’s DNA down to the chromosome – going so far as calling itself “A Mark Zuckerberg Production” on its homepage in the early days.

Everything that Facebook does, Renren does, too. The site launched in 2005, and spread virally across college campuses in China before eventually opening up to the public (just as Facebook did one year earlier). It recently launched Renren Places, a “Like” button and a Groupon-style deal-of-the-day feature. In many ways, then, Facebook’s biggest competitor in China will be itself, as it will need to find a way to differentiate itself from Renren.

That won’t be easy. Although Renren closely mirrors Facebook’s functionality, the site’s also started launching its own innovations from streaming music services to paid brand pages which operate like mini-sites on Renren.com. Some reports indicate Renren is charging as much as $90,000 for its customizable brand pages.

Renren could also generate a huge warchest when it moves ahead with a planned IPO. The company appears to be diversifying in the run-up to that IPO, too. Just last week, I wrote about Renren’s launch of a LinkedIn/Quora clone dubbed Jingwei.

Clearly, Zuckerberg has his work cut out for him. But a high-profile partnership with Baidu should give Facebook plenty of marketing clout and – just as importantly – a decent working relationship with China’s ruling elite. Both are requirements if Facebook hopes to challenge Renren.

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A Sina Weibo IPO could be in the works as China’s Twitter moves to Weibo.com

China’s popular Twitter-like site Weibo may have taken a step closer to an IPO yesterday by unmooring itself from Sina.com with the launch of Weibo.com.

China’s popular Twitter-like site Weibo may have taken a step closer to an IPO yesterday by unmooring itself from Sina.com. No longer will users have to click or type their way to t.sina.com.cn. Instead, they can type in Weibo.com to access the microblogging site instantly, according to Penn Olson.

Back in February, I wrote a post titled Will we ever see a SINA Weibo IPO? I speculated then that SINA Corporation (NASDAQ:SINA) would be silly to spin off its fastest-growing business. I may have jumped the gun.

All systems seem to be pointing to a Weibo IPO sooner rather than later. First, there was a thinly-sourced report in March from China’s 21st Century Business Herald that claimed Sina was in talks with several investment banks as it mulled a Weibo IPO.

Now, there’s a move to separate the microblogging site from Sina.com by giving it its own domain. Perhaps it’s just a matter of time before we get our hands on an official S-1 filing.

For now, users will be able to use t.sina.com.cn AND weibo.com. Eventually the two sites will be merged, and traffic going to t.sina.com.cn will get re-directed to Weibo.com. The re-branding should help raise public consciousness for Weibo in China and abroad.

“We have successfully built Sina microblog Weibo into the largest and most influential social media platform in China, with user base increasing by more than 25 times in 2010,” Sina’s CEO Charles Chao said after the company’s Q4 earnings report last month.

The total number of Weibo users doubled to 100 million in the four months leading up to the report, and Sina’s in the process of deploying an advertising and a virtual goods marketplace on Weibo. While the microblogging service is yet to generate any revenue, analysts still believe Weibo could be valued at $3 billion or more.

And judging by the success of several recent tech IPOs out of China (including YOKU, DANG and QIHU), a Weibo IPO has the potential to turn into a public spectacle – especially if the site could beat Twitter, LinkedIn and Facebook onto stock exchanges.

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