IPO: A utility used by people in 70 countries
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