The Economist reads: Sina Weibo is facing a new dilemma
Weibo is in trouble
Can Weibo do better than Twitter?
Can Weibo do better than Twitter?
China’s microblogging giant faces ever stiffer competition for advertising revenue
Weibo is facing increasing competition for advertising revenue
1. THREE YEARS after Twitter launched in 2006, Chinese techies created a similar microblogging service in China. Weibo (literally “microblog” in Chinese) boasted an average of 241m daily active users in March, more than Twitter. Like its American cousin, Weibo allows users to follow other users, tweet, retweet and browse a real-time list of trending topics (it steers clear of politics). And like Twitter, it relies heavily on advertising revenue.
Twitter appeared in 2006, and three years later China launched it. In March, Sina Weibo had 241 million daily users, surpassing Twitter. Like Twitter, Weibo users can follow other users, send tweets, retweet tweets, browse popular topics (Weibo subtly avoids political topics), or, like Twitter, rely heavily on advertising revenue.
2. So as coronavirus-induced uncertainty led advertisers to slash budgets, Weibo saw advertising revenue, which accounts for nearly 90% of sales, plunge. In the first quarter it fell by a fifth year on year, to $275m. Operating profit plummeted by more than half, to $58m. Delayed second-quarter results, due on September 28th, may be less terrible. China was the first to be hit by covid-19 but began to recover just as the West went into lockdown.
Advertisers have slashed budgets due to uncertainty caused by the new crown outbreak, which accounts for nearly 90 percent of Weibo's revenue. In the first quarter of this year, weibo advertising revenue fell 20% year-on-year to 275 million yuan. Weibo's profit more than halved to $58m. Second-quarter results, delayed until September 28th, may not be so bad. China was the first country to break out of the new crown outbreak, but by the time the West entered a blockade, china's economy had begun to recover.
3. But Weibo also confronts a longer-term challenge. CEO of Westwin, a Shanghai-based digital-marketing firm, notes that for much of the past decade two firms—Weibo and Tencent (which owns WeChat, a messaging service)—sucked in the vast majority of advertising spending on Chinese social media. Today the “big two” are competing for ad yuan with another behemoth, ByteDance, which operates Douyin, an addictive short-video app (as well as TikTok, its global version). Other rising internet stars, such as Pinduoduo, which offers bargain shopping, are also muscling in on the advertising market.
But microblogging also faces a long-term challenge. The CEO of West Window Technologies, a Shanghai-based digital marketing company, says Weibo and Tencent have absorbed the vast majority of advertising spending on Chinese social media over the past decade. Now, the two Big Brother are vying with another giant, Byte Beats, for a share of advertising. Byte Beat operates the short video app Jitter and its global version of TikTok. Other rising Internet stars, such as Dodo, also want a piece of the advertising market.
4. Weibo already boasts more than half a billion registered users in China. But user growth has slowed. To keep advertisers on board, Weibo must therefore boost user engagement. The company understands this. It already sports a richer array of functions than Twitter, for example a popular question-and-answer service in the mould of Quora. It is constantly adding new ones. In 2018 it acquired Yizhibo, in which people live-stream stand-up comedy, moonwalks and other acts for tips. Last year it launched a photo-sharing service akin to Instagram called Oasis. Still, Weibo’s revenues per user have been declining since 2018, and its share price with them (see chart). That is one more feature it has in common with Twitter.
Weibo already has more than 500 million registered users in China. But its user growth has slowed. In order to retain advertisers, microblogging must increase user engagement. Weibo is well aware of this, and it now functions more than Twitter. It adds a popular question-and-answer service, similar to Quora. And Weibo is constantly adding new features. In 2018, Weibo acquired live streaming, in which people can perform monochonics, spacewalks, etc., and get a reward. Last year, Weibo also launched Oasis, an Instagram-like photo-sharing service. Despite this, Weibo's individual user revenue has been falling since 2018, and its share price has fallen (see chart). This is another common feature between Weibo and Twitter.
P1：Weibo relies heavily on advertising revenue.
P2：The outbreak has led to a drop in high-income microblogging tubes.
P3：Weibo faces stiff competition.
P4：Response to Weibo: Increasing new features.
uncertainty/ʌn' sɜːt 'ə) ntɪ/n. Uncertainty; uncertainty; uncertainty; uncertainty, uncertainty
Her comments will add to the uncertainty of the situation.
Her criticism will make the situation more unstable.
slash/slæʃ/vt. - vi. Swinging; Whiplash; cut; cut; severely criticized . . .
He slashed the Administration for its policies.
He sharply criticized the government's policy.
plunge/plʌn (d) ʒ/n. Input; jump into vt. To make a fall; to make an input; to make an insertion
plunge into input; jump in; start something suddenly or hastily
take the plunge to take a risk;
plunge pool n. The pool under the waterfall
He plunged from a tenth floor window.
He jumped out of the window on the 10th floor.
plummet/plʌmɪt/ n. Lead hammer, pendant vi. Fall vertically
The damaged aircraft plummeted down to earth.
The damaged plane fell vertically to the ground.
in the mould of In...... mode
At the same time, the government may be forced to intervene to resolve crises at other financial institutions, possibly in the mould of Lehman and AIG, but within a more institutionalised and systematic framework.
At the same time, the government may have to intervene to resolve the crisis for other financial institutions in a similar way to Lehman and aig, but the intervention will take place within a more institutionalized and systematic framework.
stand-up comedyMonolody; talk show
A lot of what you see in stand-up comedy today is very derivative.
A lot of what people see in single-player comedy these days is inherited from their formers.
moonwalk /muːnwɔːk/n., vi (made) moonwalk; space dance steps
For example, Michael Jackson's leather glove with shiny crystals - it became very famous in the 1980s when he presented his moonwalk to the world.
For example, Michael Jackson's diamond-encrusted leather gloves. The gloves beed popular in the 1980s when Michael Jackson presented his space dance moves to the world.
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