Sina Weibo seems to have nowhere to go

From 80 US dollars in early 2011 to 135 U.S. dollars in April of that year, and then all the way down to 50 U.S. dollars - the development of Sina Weibo is the most important factor affecting the share price of Sina.

Weibo has once allowed Sina’s veteran portal site to see the dawn of rebirth. The solid user base and liveliness also provide the capital market with ample room for imagination. Three years after its debut, Sina, with heavy performance pressure, came to an embarrassing node: the growth rate of Sina Weibo users continued to decline, and operating profit in the second quarter was only US$200,000, a year-on-year drop of 98%.

There was pressure on the performance before and the opponents pressed harder. Sina Weibo, how to make money? "Chinese Entrepreneur" wrote an in-depth analysis of this article:

How to make money?

Sina is a company that lacks money.

Unlike other three portals, Sina’s long-term main source of revenue is advertising. NetEase has online games. Sohu has search, input, and other business clusters. These products can bring a lot of profits. Tencent relies on QQ. Become the world's most profitable Internet company.

Weibo let Sina play a turnaround. In August 2009, Sina took the lead in launching microblogging among the four major portals. This product became the lifesaver of Sina. At that time, China's microblogging products were still in a period of ignorance. Sina had grasped this rare market gap period through long-term accumulation of celebrity resources and operating experience. With the power of the entire company, Sina Weibo quickly became China’s largest and most influential social media platform. Its user base expanded more than 25 times than in 2010. The huge user base and Facebook’s up to $60 billion valuation were also at that time. Inspire investors' enthusiasm for Sina, and the share price once climbed to a high of 135 US dollars.

The microblog Sina Weibo, described by the headman Cao Guowei as “a tall and rather tall primary school student”, seems to have become a climate on the one hand, and it gives people a great imagination for its future; on the other hand, it has not realized the outside world. Great expectations. On the issue of commercialization, Cao Guowei once declared that he was not in a hurry to make profits. He only announced six possible business models for Weibo: interactive and accurate advertising, social games, real-time search, unlimited value-added services, e-commerce platforms, and digital content fees.

However, Weibo, a Sina milk company that raises the entire company's power, does not produce milk.

The huge flow is like a hard-to-explore “gold mine”. The shortest and most profitable way is still Sina’s best way to make money—advertisement. Sina Weibo is also committed to attracting more advertisers. After the release of the latest Weibo V5 version, Sina has introduced a new type of advertising method. Commercial accounts can be featured in the fan timeline to ensure that advertisement information is viewed by users. This model is based on Sina Weibo's use of Twitter. Although it is beneficial to advertisers, it sacrifices a certain user experience.

Sina has realized its profitability problem. In the 2011 annual risk warning, Sina said: “If our monetization efforts are unsuccessful, the investment in Sina Weibo will significantly reduce our profitability.” The first lesson is Sina. Blog, this popular product has also brought a lot of traffic for Sina, but did not give any real benefits.

However, Sina has no other choice. In 2011, Sina had already invested $1.1 to $120 million in microblogging. With the continuous increase in the number of users, Sina has continued to increase investment in infrastructure, network equipment, etc. It is expected that this year's investment will exceed 160 million US dollars. These investments did not bring imaginary profits to Sina. Sina still has not escaped the dilemma of relying solely on advertising revenue three years ago. Sina’s second-quarter earnings report for the first time revealed Weibo’s operating revenue data, including Weibo’s advertising revenue of US$10 million, which accounted for 10% of Sina’s advertising revenue. According to Cao Guowei's presentation at the financial report conference, 80 advertisers of Sina Weibo, 75 to 80% of which are all existing customers, are running on the portal and Weibo, which means that the new advertisers of Weibo are actually only 15 homes.

The risk of relying too heavily on advertising profits is that the number of advertising large customers and the advertising display space itself are limited, and if the traffic and the number of users can not continue to increase, advertising revenue will meet the ceiling. However, Cao Guowei is much more optimistic. According to media reports, he believes that the growth rate of Weibo's advertising revenue will accelerate and help Sina increase its overall advertising revenue growth rate in the second half of the year.

The user experience of Weibo has always remained the same, and the enthusiasm of users for Sina Weibo is escalating. With the declining number of new users and pressure from profit, this year Sina has accelerated the trial of monetization.

However, from the Weibo membership system to the micro-task official platform, the response to the users and advertisers has not been accurately grasped, and the response obtained was not positive. On the other side of the ocean, Facebook and Twitter, which Sina has been trying to emulate, are facing similar difficulties with Sina. Although the scale is growing, the profitability of the two companies cannot be satisfied with investors.

In Wang Yinquan, a partner of Haiyin Incubator, Sina Weibo has accumulated a large number of users and profitability is a matter of course. Now commercialization is not too slow, but too fast. “The exploration of social network business model is global Sexual, Sina Weibo should not be a tempter for the first business model, and is more suitable as a follower."

Is the media still social?

“Share new things around anytime, anywhere.”

Although Sina Weibo has inevitably become a “social media” since its inception, it relied on the celebrity celebrity effect to start the brand and attract users. However, the frequent ad words implied that Sina Weibo had Your own position: social network.

Internet watcher Chen Huarong told reporters: “The charm of social networks lies in the enormous commercial value of advertising: compared with Twitter’s 'information flow' advertising model, Facebook’s advertising revenue based on real social relationships is more; managing Chinese Internet users’ social networks Tencent’s online advertising revenue in the second quarter of 2012 increased by more than 70% year-on-year, and its main revenue came from social networking platforms.”

Sina Weibo is approaching Facebook and Google+ step by step. On October 15 this year, Sina officially launched the V5 Weibo, which has a strong social profile. By publishing "targeted publishing" and "close friends" functions, it enhanced the social functions of the platform to further complete the media and social orientation. Transformation.

The social platform is more open and more grassroots, and requires powerful data mining capabilities. Through the exploration of user relationships, behavioral data, and propagation paths, the advertisement and user can be better matched. But how does Sina, a company with a strong media gene, complete product transformation? Sina did not seem to have formed a unified understanding internally. The reporter contacted the Sina Public Relations Department on a series of related issues, but as of press time, no reply has been received.

In Chen Huarong's view, the application of too many varieties is the biggest problem of Weibo, and the root cause of this phenomenon is that Sina did not even think about whether Weibo is a media or a social network. The confusion of positioning also brought about the chaotic battle of product features of Weibo’s individual politics: micro-blog members at the commercial level, micro-numbers, micro-currencies, micro-bars with community-based functions, micro-blog V4, and V5 revisions, etc., and media-based functions. Publications and so on. Sina internal staff told the "New Finance" reporter that every current microblogging product is in the investment phase, resulting in minimal operating revenue. In the opinion of Wei Wuhui, an internet analyst, everything is done. It is a temptation to look around to see where profit can be made.

Inefficient management

Sina Weibo, which is not exactly the same as Twitter and Facebook, seems to have found a clear product direction. However, inefficient internal management has become another shortcoming for Sina.

Due to the extremely fragmented shareholding, Sina, Baidu and Alibaba are different from other Internet companies and have always lacked a soul figure. In the 7th year of Wang Zhidong’s Sina, he replaced five CEOs until 2006 when Cao Guowei took office. During the period of governance of Sina, CFO Guo Guowei was gradually stabilizing corporate governance. He defined Weibo as an important strategic position as important as the Sina portal. He successfully attracted a large number of Internet users and led Sina to complete China. The first MBO (Management Acquisition) of the Internet gave Sina management the right to speak on the board. However, despite being known as the most successful professional manager in China's Internet industry, Cao Guowei did not timely scrutinize and improve Sina's internal overall structure and management processes.

An engineer who once worked at Sina Weibo told the reporter: “Sina has no R&D tradition. Within the company, operations are a more powerful sector. Although Sina’s high-level executives work diligently and work late every day, they can only use one in the middle. Mixed words to describe the work does not push no one will do." Leave Sina for a few months, in his unfinished work and product development is still in a stagnant state of no one took over. Another Sina product manager told reporters: “Sina’s internal promotion is based on qualifications rather than ability, which leads to the development of some products led by old employees who do not understand the product.”

This phenomenon also confirms the judgment of IT observer Cheng Yufeng two years ago: “It may be the highest relative morale and the most united internal stage in Sina’s history.” When the status of Sina Weibo was initially established, the contradictions in management began to become prominent. As a financial operations expert, it is an indisputable fact that Cao Guowei's lack of overall thinking on Sina Weibo’s strategy. If we cannot continue to reform Sina from the perspective of management, product development, and incentive mechanisms, the future of Sina will be even more difficult to get away from it. from.

Tracing Tencent

In the eyes of Zhou Wei, a managing partner of KPCB (Kai Peng Huaying Venture Capital Fund), the activity of Sina Weibo is seriously declining. Not only the quality has declined, but the number has also dropped.

Sina’s financial report does not seem to support this judgment. The data shows that the proportion of active users accounted for 10% in the second quarter, a total of 36.5 million people. However, this figure is not surprising. On the other hand, Tencent, as early as the third quarter of 2011, had more than 55 million active users of Weibo. Relying on the natural social relationship chain of QQ, Tencent Weibo has always attached importance to acquaintance relationship and social networking. Although its brand appeal is not as good as Sina, it earns more real money. In addition, Tencent has extensive operational experience in games, e-commerce, etc., and can directly interface with Tencent Weibo. Sina lacks mature games and e-commerce resources, and does not have a perfect payment system. Based on the exploration of business models in social relations, Sina is not optimistic about the outside world.

Wang Xiquan believes that Sina’s most powerful opponent is Tencent: “Sina is like the weak Song Dynasty, and only Sina Weibo is a checkpoint. If you fall, you may completely lose the status of the Internet's first camp. Tencent is a brave warrior. , Sitting on games and other profitable cows, ready to return to the prairie rest and health.” Holding QQ, WeChat, Weibo and other killer applications, Tencent is waiting for Sina to make a mistake.

How to suppress competitors? Inside Sina, employees were told that Sina must be open to create an Internet ecosystem and complete the transformation from a portal to a platform company. This means that Sina Weibo cannot just be a simple Internet product, but should be the platform foundation for many products. Wang Qiquan, who has dealt with Sina and Tencent, respectively, said that for developers, Sina is a platform that is open enough, and Tencent is false and open. Sina, whose strength is not strong, must rely on developers. In the project of Chao Guowei, he hopes to build a strong ecosystem through the Weibo user platform. If it is successful, Sina Weibo will become the core of many Internet applications, and it will create a business system in which users, advertisers, and Sina will participate together, and derive more business models.

But the platform was not built in one day. Since the launch of the open platform program, few surprising applications have come out. An internal engineer at Sina told the reporter, “The construction of the platform is to release long lines and catch big fish. It will not be possible to bring a lot of revenue to Sina in the short term.” At the same time, there is no necessary connection between Weibo and the platform. Sina declares it to be open. The number of applications on the platform has exceeded 200,000, but reporters saw on the Sina Weibo App Plaza that the first page of the homepage shows that the number of popular applications of third parties involved is less than 120,000, compared to 300 million of Sina Weibo. The proportion of users and users is less than 0.04%.

Developers of open platforms have not really benefited. Weico, a third-party Sina Weibo client, has developed and has accumulated 2 million active users. Zhang Yunyi, creative director of eico, told the reporter of “New Finance”: “Weico has already acquired venture capital and is not in a hurry for profit in the short term, but the product It has not obtained any revenue from the Sina Open Platform."

The way in which cash flow is realized is not clear, so that the valuation of Sina’s valuations by big investment banks is controversial. On October 10th, Credit Suisse ranked Sina's stock as "outperform" and its target price was adjusted from US$81 to US$78. The company has awarded Sina with a wait-and-see rating on its shares. The target stock price is US$60. Compared with the highest peak of Sina’s stock price of a year and a half ago, it fell more than one. half.

Facing the pressure from the capital market, Sina, which has staked its destiny on Weibo, has no turning back yet.