Wednesday, August 14, 2013

Two things that Sina Weibo have the problem.

Sina published the performance reporting in the second quarter yesterday, and some number of Sina Weibo also became clear with this.

The total revenue of Sina Weibo was about 37.7 million USD in the second quarter, and it increased 46.1% compared to the last quarter. Among the revenue, the advertising revenue was 30 million USD, and the service revenue was 7.7 million USD.

About the advertising revenue increased more than 50% compared to the last quarter, but the service revenue was slight increase.

According to the annual reporting in 2012, 77% of Sina Weibo revenue was earned from the advertising revenue, other 23% of revenue was earned from service revenue.
But the rate of the advertising revenue in this quarter was about 85.7%, so it can be said that their dependence on the advertising revenue is more and more running high.

I think that this dependence (in other words 'bias') is the first problem for Sina Weibo, and I think that they have to strengthen other revenue more, such as the collaboration with Alibaba (It means "Social Commerce").

The second problem is the low rate of active users.

They announced that their daily active users were 54 million people, but their total registered user was over than 500 million people. It means that the rate of daily active users was only about 10%.

According to the news, the recent daily active user of Facebook was 699 million people. Compared to them, it can be said that the daily active users rate of Sina Weibo is very low.

Increasing the rate of active users have been the long term problem for Sina Weibo, but it can be said that it is still midway.

According to the news, PifferJaffray recently estimated that the market value of Sina Weibo is 6 billion USD, but this number is more than the value when Alibaba acquired 18% share of Sina Weibo in 586 million USD. And according to the some resources, Sina Weibo intends to list stocks independently in the future.

We have to keep watching whether their plan will achieve or not as ever.

Source => TechWeb, Sina Tech