Sina Weibo lagging behind as Twitter reveals US$1bn IPO plan

At a time when most social media companies are worried about how to attract advertisers, Twitter has outperformed Facebook and is approaching the achievement of Google, while its Chinese counterpart Sina Weibo is lagging far behind in its diversification and thoroughness in information offering, reports the Guangzhou-based 21st Century Business Review.

On Sept. 12, Twitter said it plans to launch an initial public offering (IPO) estimated to be worth around US$1 billion. The online social networking and microblogging service has gained in popularity with users around the world, enabling them to send and read "tweets" — text messages limited to 140 characters.

Figures showed that the service has around 200 million registered users, posting over 400 million tweets a day, the paper said.

The majority of Twitter's income comes from ads from its users' mobile facilities, and only a small amount is generated from its website interface. Meanwhile, of Twitter's active users, 55% use mobile phones to see or post tweets. According to US research firm eMarketer, Twitter's sales income in mobile ads reached nearly US$135 million last year, a sharp jump from its zero income in the same category in 2011. Such a high sales growth is the powerful base for Twitter to launch its IPO.

Internet companies in China competing in the market used to believe that as long as they have users and traffic, they do not have to worry about adapting their business model. However, the reality is that Twitter's Chinese counterparts have yet to turn out large scale profits.

Insiders said that Weibo is a public opinion interface orchestrated by a few VIPs (very important people), and its diversification and thoroughness in information offering has lagged far behind Twitter.

Chinese companies have yet to generate significant income from ads, while Twitter is also profiting from selling data through its users' search queries.


Last year, Twitter executives hinted that the company may expand into e-commerce in the future, while this is also the focus of Sina Weibo after Chinese internet giant Alibaba acquired a partial stake in the service.

Social media plus e-commerce is now seen as the next best business model for China's internet firms, according to insiders.

Sina Weibo introduced its advertising system earlier this year, and its ads income broke US$30 million for the first time in the second quarter. However, according to research firm Global Web Index, in the second to fourth quarter of last year, Sina Weibo's user activities dropped nearly 40%. Once Twitter succeeds in launching an IPO, it will only become more aggressive in its operations and look to expand further, while Sina Weibo will lack behind under the Alibaba umbrella, the paper said.

Source: Want China Times