Goldman Sachs' downgrading Sina Corp's shares to "neutral" from "buy," citing limited value in its twitter-like micoblog service Weibo, caused the stock to drop 3.85 percent on Wednesday.

Sina's shares closed at US$89.74 on Nasdaq on Wednesday. The downgrade sparked a discussion among Internet tycoons, industry observers and China's Internet users over the value and future development of Sina's microblog.

Goldman Sachs analyst Catherine Leung wrote that "we see limited upside to Weibo's valuation because monetization remains in an early, more exploratory stage."

"We downgrade Sina to neutral as the stock's current valuation has fairly reflected Weibo at an implied valuation of US$2 billion," Leung wrote in the report.

In last December's report, Goldman Sachs raised its target price from US$51 to US$80 citing Weibo's big influence over Chinese white collars' social networking.

Sina president and chief executive officer Charles Chao said at an entrepreneurs' forum in Beijing on Wednesday that his major task is to increase user base and to bring better service to microbloggers.

Chao has said several times that Weibo hopes to build a platform that brings together users and third party software developers to offer value-added services, and also to benefit from potential advertising income.

But Lee Kaifu, former head of Google China and founder of Innovative Works wrote on his microblog that Goldman Sachs was too "short-sighted" in its downgrade and failed to realize Weibo's boost to Sina's brand value and its existing businesses.