IPO: A util­ity used by peo­ple in 70 coun­tries

China Daily (Canada) - - ACROSSAMER­ICA -

Weibo has only turned a profit in the fourth quar­ter of 2013. It posted a net loss of $47.4 mil­lion in the first quar­ter of this year — more than dou­bling its $19.2 mil­lion loss of a year ear­lier. First-quar­ter rev­enue more than dou­bled to $67.5 mil­lion, but slipped 5.5 per­cent from the pre­vi­ous quar­ter.

Leju, which op­er­ates in 250 Chi­nese cities, last week said it would team up with US on­line real-es­tate ser­vice Zil­low Inc to launch a web­site that would al­low China’s ac­quis­i­tive home­buy­ers to read Zil­low’s US prop­erty list­ings trans­lated into Chi­nese. Chi­nese bought more than $11 bil­lion of US res­i­den­tial realestate prop­er­ties last year.

Ad­dress­ing Weibo’s growth is­sues, Chao said the com­pany’s mar­ket share was due to shrink as com­peti­tors emerged to chal­lenge Weibo’s rise into a “very, very pow­er­ful, pop­u­lar” force in China.

“We have only been in this mar­ket for four and a half years,” Chao told CNBC. And we have been grow­ing very, very rapidly in the first two-three years, partly be­cause we were the first so­cial me­dia kind of prod­uct in China on the mo­bile (de­vices).

“But on the other hand, there was no com­pe­ti­tion


Chi­nese lan­guage is dif­fer­ent in im­por­tant ways, thus 140 char­ac­ters is not 140 let­ters. It is much more rich, think 60-plus words”. MAX WOLFF CHIEF ECON­O­MIST AND STRATE­GIST AT CIT­I­ZEN VC

from the be­gin­ning. As com­pe­ti­tion in­ten­si­fies, nat­u­rally there will be some di­lu­tion in us­age.”

For­rester Re­search Inc an­a­lyst Wang Xiaofeng said Weibo missed an op­por­tu­nity to go pub­lic when its po­ten­tial value was high­est. “We are all aware it has been beaten up by Ten­cent’s WeChat,” she said. The big­gest chal­lenge for the com­pany will be pro­vid­ing “more ef­fec­tive mar­ket­ing” be­fore user ac­tiv­ity drops fur­ther, the an­a­lyst said.

Weibo’s IPO sparked a me­dia crush that livened up an oth­er­wise typ­i­cal Man­hat­tan work morn­ing. Peo­ple on their way to work saw the big screen atop the Nas­daq build­ing at Broad­way and 43rd Street flash the com­pany’s logo against a red back­ground and then broad­cast the IPO cer­e­mony live from the ex­change. As the com­pany’s IPO party streamed onto Broad­way min­utes later to pose for photos, nu­mer­ous ad­ver­tis­ing screens through­out Times Square dis­played Weibo’s logo.

Max Wolff, chief econ­o­mist and strate­gist at Cit­i­zen VC, said Weibo has strong growth po­ten­tial as a stock, de­spite its chal­lenges. Al­though Weibo of­ten is com­pared to Twit­ter, “the Chi­nese lan­guage is dif­fer­ent in im­por­tant ways, thus 140 char­ac­ters is not 140 let­ters”, Wolff said.

“It is much more think 60-plus words.”

Fur­ther­more, “Weibo is a Chi­nese lan­guage util­ity but is ac­cessed from 70 coun­tries, thus, some­what in­ter­na­tional”, he said.

Joy Zhuang, a free­lance New York-based jour­nal­ist from Fu­jian, China, said she used Weibo heav­ily when it was new, “but then it fell far be­hind”.

“I think it still plays an im­por­tant role in Chi­nese so­ci­ety be­cause ev­ery­body needs to know the in­for­ma­tion,” Zhuang said.

rich, Meng Jing in Bei­jing contributed to this ar­ti­cle

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