Weibo has been called China’s Facebook by some and China’s Twitter by others. The truth is that it’s more of a blending of the two, and occupies a space of its own. Its plan to go public in the U.S. made big headlines as investors anxious to get in early on the world’s second largest economy’s largest social media site prepared to jump in. Unfortunately, Weibo just announced that it posted a net loss in the first quarter of this year.
The day for investors to choose if they want to invest in Weibo on the NASDAQ stock exchange comes tomorrow. In preparation, Weibo made one last amendment to its prospectus sheet. The company’s revenues dropped in Q1 of this year compared to Q4 of last year, from $71.4 million to $67.5 million. Much of this can be attributed to the seasonal holiday. As Weibo is quick to point out, advertising revenue generally drops after the holiday season. As Tech in Asia mentioned, it is important to keep in mind that the resulting $4.8 million net loss is significantly better than its $18.4 million loss this time last year. Q2 – Q4 were profitable for Weibo in 2013.
Webio (formerly known as Sina Weibo) is still a massive force in China’s social media market. However, while it was once a hotbed of political activity and free speech, a government crackdown on the site seemed to take some of the wind out of its sails. This (along with copious amounts of spam and bots) is at least partially to blame for the recent lack of engagement of users. Those in the know will tell you, WeChat is quickly becoming the social media vehicle of choice for Chinese users (although, it is more of a messaging app with social media elements).
We will have more on Weibo’s IPO tomorrow when Weibo hits the NASDAQ stock exchange under the symbol “WB.”
[Photo Credit: B!ttu]