Tencent has a successful online-game business, but executives say they are focusing their efforts on social networking and on their Weibo site in particular, including efforts to have third-party developers make applications for it, as Sina is doing. Tencent's challenge lies largely in Sina's users, generally a cosmopolitan set of social "influencers" from which Sina can expand outward and downward, compared with Tencent's younger users in China's lower-tier cities, from which it is harder to move up, analysts say.

China's Internet companies have generated enormous enthusiasm among investors, and some of their valuations have reached levels similar to those of their U.S. counterparts, even though China's online-advertising market is still smaller than the U.S. market.

Chinese social-media websites collectively have hundreds of millions of users who swap messages and play games on the sites using phones and computers. Facebook itself is considering entering China despite the difficulties of dealing with government censorship—especially for a site that has been used as an organizing tool by protesters in the Middle East and one that has been blocked in China for nearly two years.

Weibo won't be turning into Facebook, Mr. Chao said, but will have more Facebook-like features to allow for "stronger social relationships based on our new applications."

Analysts say the transformation will be a challenge. Sina, which was launched in 1999 and trades on Nasdaq, is far smaller than some of its rivals. Its market value of nearly $6 billion is a fraction of Baidu's more than $40 billion and Tencent's nearly $50 billion. Tencent has significantly more resources to spend on marketing, with $1.7 billion in cash as of March, compared to Sina's $577.6 million.

In addition to the more than 200 million users Tencent claims for its microblogging site—it's hard to compare the companies' user counts, with their different methods of counting—Tencent has legions of users of its flagship product, QQ, China's most popular instant-messaging platform, and runs a social-networking site called Qzone.

Mr. Chao said he wasn't worried. "It's not a competition about how much cash you have," but about "product improvement" and "end-user experience," he said.

IChinaStock, a research website for global investors, says Tencent, which already has social connections between its users, is closer to becoming "China's Facebook," but that "in terms of media influence, it will be very difficult for Tencent Weibo to surpass Sina Weibo."

The growth of social media in China comes even as the government has increased efforts to regulate Internet use. Over the past two years, an increasing number of overseas websites have been blocked in China for long periods of time, damping participation in ever more global social networks despite the legions of Chinese Internet users. Users around China have reported slower and less stable access to popular overseas websites such as Google Inc.'s Gmail, and researchers say it appears traffic to Google's servers is being limited. Chinese websites, including Sina, are required to police themselves to keep their government-issued operational licenses, a costly task involving dozens of employees who monitor the sites around the clock.

Although Sina is known for its heated discussions, at times over controversial issues such as local government corruption and soaring property prices, most talk on the site isn't political. When sensitive topics arise, the company can be creative in limiting conversation without cutting it off altogether—for example, by blocking searches of sensitive keywords but not stopping people from publishing them on their own microblogs.

For topics known to be taboo in China, such as the spiritual group Falun Gong, Tibetan independence and the government's violent 1989 crackdown on student protests in Tiananmen Square, the company sometimes removes messages entirely.

When asked if he was concerned a government crackdown might affect the outspoken nature of Weibo, Mr. Chao said that Sina had years of experience in dealing with content regulations while maintaining its websites and that he was confident the company could handle it.