Shulou(Shulou.com)06/03 Report--

Weibo recently released its results for the first quarter of 2020. Unlike many online platforms that benefited from the epidemic, Weibo, which connected islands during the outbreak, saw a decline in performance.

Weibo's revenue in the first quarter of 2020 was $323.4 million, down 19% from a year earlier, while net profit attributable to Weibo was $52.1 million, down 17% from a year earlier, according to financial data.

Revenue and net profit have both declined, and Weibo, once the overlord of the Internet, has now won the lottery.

The flow king can not produce real gold in China.

Sina Weibo, which once survived the Weibo war, has been moving forward without hindrance since it was quietly renamed in 2014. So far, there is no strong competition, and Weibo, which is the only step in Wulin, has received unprecedented attention during the epidemic.

This is reflected incisively and vividly in the surge in user data.

According to Weibo's financial results for the first quarter of 2020, the number of monthly active users (MAU) of Weibo reached 550 million as of March 2020, a net increase of about 85 million over the same period last year, of which mobile users accounted for 94%; the average number of daily active users (DAU) was 241 million, a net increase of about 38 million over the same period last year.

In terms of user data, Weibo, with hundreds of millions of monthly active users, can be said to be the envy of many media platforms. Relevant data show that while the number of monthly active users of site B, which is frequently scanned on the screen, is 170 million, Weibo can be said to be far ahead of bilibili. And compared with Douyin and Kuaishou, Weibo is not inferior.

However, although the chassis of Weibo's flow kingdom is getting bigger and bigger, the huge flow is not the Jinshan of Weibo.

In Weibo's latest financial results for the first quarter of 2020, contrary to Weibo's growth in the number of monthly active users, Weibo's revenue and profits both declined. Weibo reported revenue of $323.4 million, down 19 per cent from a year earlier, net profit attributable to Weibo was $52.1 million, down 17 per cent from a year earlier, and diluted net income of US stocks belonging to Weibo was 23 cents, compared with 66 cents a year earlier.

Weibo's inability to make money has led to a lack of confidence in capital. Weibo shares fell for the third day in a row after Weibo released its latest quarterly results on May 19.

At the same time, Weibo predicted in its financial report that net income calculated at the exchange rate in the same period of the previous year in the second quarter of 2020 may have an annual decline of 7% and 12%. In the face of a sustained decline in revenue that may soon be faced, Weibo appears helpless. Behind the lack of revenue capacity is the poor performance of Weibo's business.

Live broadcasts don't earn silver.

An epidemic of black swan incident, once again put the online live broadcast industry into the public's attention, live broadcast seems to have become a national craze. Stars and entrepreneurs who did not value live streaming in the past are now really good for live streaming.

The field of live broadcasting is booming, and Weibo is not willing to fall into this tuyere. According to official Weibo information, Weibo received more than one million live broadcasts in the first quarter, double the number in the same period last year and 80 per cent more than in the previous quarter.

However, despite Weibo's positive performance, Weibo, which has hundreds of millions of users, has not been able to make money on live streaming.

Weibo's revenue from value-added services was $48 million, down 17 percent from the same period a year earlier, according to Weibo's first-quarter 2020 results. Weibo explained in the financial report that this was partly offset by the increase in member business revenue due to the decline in live broadcast business revenue.

In contrast to the weakness of Weibo, the "back wave" bilibili is strong. According to bilibili's financial report, bilibili's revenue from live broadcast and value-added services reached 790 million yuan ($112 million) in the first quarter of 2020, up 172% from a year earlier.

Wang Gaofei, CEO of Weibo, said that in the second quarter, it will turn corporate live streaming and e-commerce live streaming into standardized products and launch online celebrities together with enterprises. At the same time, it is also stated that the revenue growth of the live broadcast business mainly comes from brand advertising, which even has some negative effects on the overall live show. And from a commercial point of view, live broadcast can not become the main force, Weibo live broadcast cash model is still being explored.

Weibo still has a long way to go in the field of live broadcasting, while Weibo's performance also shows fatigue in terms of advertising and marketing.

A worsening advertising business

As the Internet suffered an economic winter in 2019, Weibo's major financiers began to cut back on advertising and marketing expenses. It was not easy for Weibo, which is almost the lifeblood of advertising and marketing revenue, to be affected by the black swan epidemic in the early spring of 2020.

The decline in revenue from advertising and marketing directly led to a decline in Weibo's revenue in the first quarter of 2020. Weibo's advertising and marketing business generated revenue of $275.4 million, down 19% from a year earlier, according to earnings data. At the same time, KA (key brand customers) advertising and marketing revenue + SME (small and medium-sized customers) advertising and marketing revenue was $247.9 million, down 24% from a year earlier.

What is weak compared to Weibo's performance in advertising is the strength of "Houlang" bilibili. Bilibili's financial report shows that in the first quarter of 2020, the revenue of its advertising business was 214.3 million yuan, an increase of 90% over the same period last year, and not all platforms saw a decline in advertising revenue.

Weibo's advertising and marketing revenue consists of three parts: KA (key brand customers) advertising and marketing revenue + SME (small and medium-sized customers) advertising and marketing revenue + Alibaba.

The revenue of the first two usually accounts for 90% of Weibo's advertising and marketing business revenue. Although small and medium-sized enterprises have tightened their advertising marketing budget due to the impact of the epidemic, Weibo's advertising and marketing business revenue has decreased. There are also reasons for its lack of competitiveness.

In addition to Weibo, small and medium-sized enterprises are also willing to place advertisements on short video platforms such as Douyin and Kuaishou, because the algorithmic push and audience of such platforms can achieve more accurate advertising and improve the realization rate.

Although the advertising industry will be able to respond as the epidemic is brought under control over time, it is unclear how competitive Weibo will still be in advertising. At present, Weibo is also faced with the problem that the content of its platform is becoming more and more rigid.

The increasingly ossified Weibo ecology

The reason why Weibo's revenue growth is slowing down or even declining is ostensibly caused by the decline in revenue from the two major businesses, but in fact it is a manifestation of the growing lack of ecological competitiveness of Weibo.

Weibo's home page entry phrase "find new things anytime, anywhere" was ridiculed by many Weibo users as "finding bad things anytime, anywhere", which is not without reason.

Weibo users have suffered from Weibo for a long time. Users who have been surrounded by "marketing accounts", "zombie fans" and "explosions" for a long time are becoming more and more dissatisfied with Weibo. Following the "55 break Festival" in which netizens protested against China Literature, many Weibo users also took part in the "one-day challenge not browsing Weibo" on May 8-9.

And Weibo, which takes the pan-entertainment route, is far less attractive to the sinking market than the approachable short video platform Kuaishou. "it was never another Weibo that beat Weibo." Maybe it's about to be possible.

At the same time, although Weibo now sits on traffic that is the envy of countless social media platforms, its user conversion rate and authenticity have been questioned by outsiders, and the seemingly solid traffic kingdom is not so indestructible.

In this context, it is not difficult to see that although Weibo has been able to achieve a substantial increase in the number of monthly active users due to the epidemic, at a time when the content ecology of Weibo platform is gradually losing its attractiveness, top Weibo is also difficult to circle money.

(official account of Liu Kuang / tr. by Phil Newell) ID:liukuang110

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