Weibo posts 516% jump in Q2 net profit

China Daily (USA) - - BUSINESS - By MA SI in Bei­jing masi@chi­nadaily.com.cn

Weibo Corp, the Chi­nese coun­ter­part of Twit­ter Inc, ex­pects a strong fi­nan­cial per­for­mance in the third quar­ter of the year, af­ter the com­pany saw more than five­fold in­crease in its net profit in the sec­ond quar­ter, driven by ro­bust ad­ver­tis­ing rev­enue.

Weibo, ma­jor­ity owned by Chi­nese on­line me­dia com­pany Sina Corp, said on Mon­day its net profit surged to $25.9 mil­lion in the sec­ond quar­ter to June 30, mark­ing a year-onyear growth of 516 per­cent.

Its rev­enue reached $146.9 mil­lion, beat­ing an­a­lyst’s aver­age es­ti­mates of $146.7 mil­lion.

CEO Wang Gaofei said the com­pany had been given a ma­jor boost from the ris­ing pop­u­lar­ity of the so­cial net­work­ing-based mar­ket­ing.

“Rev­enue from big cor­po­rate clients surged by 73 per­cent and that from small and medi­um­sized firms by 107 per­cent.”

The com­pany ex­pects thirdquar­ter rev­enue of $168 mil­lion to $173 mil­lion, with an­a­lysts es­ti­mat­ing an aver­age $164.6 mil­lion. US shares of the Nas­daq-listed firm rose 3.65 per­cent to $37.17 in af­ter-hours trad­ing on Mon­day.

Weibo has been wrestling with Ten­cent Hold­ings Ltd’s WeChat in China’s boom­ing so­cial net­work­ing mar­ket.

In June, Weibo boasted about 282 mil­lion monthly ac­tive users, up by 33 per­cent from a year ear­lier. In com­par­i­son, WeChat has about 700 mil­lion ac­tive users.

Un­like WeChat, which fo­cuses on pro­mot­ing com­mu­ni­ca­tion be­tween friends and col­leagues, Weibo is an en­tirely open plat­form where strangers can talk with each other.

Ac­cord­ing to its CEO, the Shang­hai-based group is also gain­ing mo­men­tum in the livestream­ing sec­tor, which is cur­rently one of the most pop­u­lar des­ti­na­tions for in­vest­ments in China.

Our users of short videos and live stream­ing also surged.” Wang Gaofei, Weibo CEO

“Our users of short videos and live stream­ing also surged,” Wang said.

In Novem­ber, Weibo led a $200 mil­lion in­vest­ment in the startup yixia.com, which runs one of the most pop­u­lar video live-stream­ing plat­forms in China. Since then, Weibo has been part­ner­ing with yixia to tar­get young peo­ple.

An­a­lyst Pang Yim­ing, at Bei­jing-based in­ter­net con­sul­tancy Analysys, said the part­ner­ship had dra­mat­i­cally ac­cel­er­ated the user growth of Weibo.

“In the past, small on­line cloth­ing re­tail­ers con­trib­uted a sig­nif­i­cant amount to Weibo’s ad­ver­tis­ing rev­enue but it is now mak­ing a big ef­fort to at­tract big brands,” Pang said.

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