Graphics/GT
Moves into the black as revenues rise; focus on SMEs boosts users
The impressive 2015 results reported by Chinese leading social network Weibo Corp show that its innovative business models are paying off, with higher revenues and a shift from loss to profit, analysts said on Thursday.
Full-year revenues jumped 43 percent year-on-year to $477.9 million, the company said Wednesday (U.S. time) in its results for the fourth quarter and fiscal 2015.
Net income attributable to ordinary shareholders reached $34.7 million. On a diluted basis, that was $0.16 per share.
In 2014, the company posted a net loss of $65.3 million, or a diluted net loss per share of $0.35.
Weibo is winning with new social-media marketing strategies - for example, the so-called "Bigday strategy" that's used to attract more advertising from cross-border e-commerce merchants during the U.S.' Black Friday pre-Christmas shopping event, a company spokesperson told the Global Times on Thursday on condition of anonymity.
"Using social media for marketing has become a prime option for small and medium-sized enterprises (SMEs), and we've seen a growing demand in this aspect," he said.
More SMEs, especially in lower-tier cities, are promoting their products and services on their Weibo accounts, which could help explain why the company's active users soared, said Lü Ronghui, analyst at Beijing-based market research firm iResearch.
Weibo's traffic growth remains robust, CEO Wang Gaofei said in the financial report. For example, in December 2015, monthly active users (MAUs) reached 236 million, up 34 percent year-on-year, while average daily active users reached 106 million, up 32 percent, the company said during an earnings conference call.
Backed by domestic Internet giant Alibaba Group Holding, Weibo has also seen growing business opportunities with Alibaba's affiliates, for example online marketplace taobao.com, Zhang Yi, CEO of iiMedia Research Group, told the Global Times on Thursday.
Though Weibo said in its financial report that non-Alibaba advertising and marketing revenues grew 69 percent on a year-on-year basis, Alibaba advertising revenues accounted for about 30 percent of total ad revenues, Lü noted. "There is still room for the company to diversify its customers," she said.
At major rival WeChat, the text messaging service of Tencent Holdings, MAUs have grown as well. But the users on Weibo can get a much wider variety of information than is available on WeChat, Zhang said.
"For example, the content on WeChat is more limited within the 'friends' circle of certain users," he noted.
WeChat had 600 million MAUs as of June 30, 2015, up about 37 percent from a year earlier, according to the company's 2015 interim report.
Weibo said that it will also focus on improving its user experience in speed consumption, allowing users to more easily discover and benefit from the massive content on its platform.
It will also improve the user experience in speed posting to make it simpler and quicker for users to express their views and discuss their lifestyles, according to the company's conference call.
Nasdaq-listed Weibo saw its share price rise about 1.2 percent during after-hours trading, to $14.72 as of 8 pm U.S. Eastern Standard Time.
