Weibo's market value reaches US$11.3 billion, exceeding Twitter's monthly average user by more than 340 million

According to foreign media reports, Weibo's market value has exceeded that of its U.S. competitor Twitter. This is mainly because Weibo's stock price has risen sharply, pushing its market value to US$11.3 billion. Twitter's share price fell sharply due to the company's revenue expectations for the future fiscal quarter. Lower than market value expectations, causing its stock price to plummet and its market value to US$11.1 billion.

Original title: Weibo's market value reaches US$11.3 billion, surpassing competitor Twitter

According to foreign media reports, Weibo's market value has exceeded the market value of its U.S. competitor Twitter. This is mainly because Weibo's stock rose sharply and its market value rose to US$11.3 billion. However, Twitter's share price fell sharply because the company's revenue forecast for the future fiscal quarter was lower than its market value forecast, causing its market value to drop to US$11.1 billion.

Twitter released its latest quarterly results last week, and its share price fell sharply as its revenue forecast for the next quarter fell short of market expectations. On the contrary, Weibo's share price continues to climb, driven by the increasing number of users and growing profitability.

In October last year, Weibo's market value once approached Twitter's market value. The reason at the time: Twitter's potential acquirers, including Walt Disney and Salesforce, failed to reach a deal with it, causing Twitter's share price to plummet. According to Bloomberg statistics, the 13th was the first time that Weibo's market value exceeded Twitter at the close of the stock market.

Although Weibo's market value exceeds Twitter's share price has a lot to do with the sharp drop in Twitter's share price, it still shows that China's technology community is narrowing the gap with Western competitors. Some China technology companies even surpass their Western counterparts in various products and services provided to consumers.

For example, although Alibaba is inferior to e-commerce giant Amazon in terms of market value, with market capitalizations of US$255 billion and US$395 billion respectively, its net profit in the fourth quarter of last year far exceeded the latter. The net profits of the two were US$2.47 billion and US$749 million respectively.

But China technology companies still generally lag behind Western technology companies in how to turn user resources into profits. Many investors value user resources very much, which they believe determines a company's growth potential.

Weibo has an average monthly user of more than 340 million, but profits lag behind Western competitors.

Nomura Securities analyst Jialong Shi calculated that Weibo's average monthly user income in 2015 was US$1.90, which was only one-quarter of Twitter's and one-sixth of Facebook's, whose average monthly user income was US$6.50 and US$11.30 respectively. Although data for the first quarter of 2016 improved, Weibo still lags far behind its U.S. competitors on this indicator.

An analyst in Hong Kong said: "China's social platform advertising market is still in its very early stages." He pointed out that China's social platform advertising market accounts for only 8% of China's online advertising market, while the U.S. social platform advertising market accounts for 20% of the U.S. online advertising market.

Although Weibo has always been described as the Twitter of China, from a certain perspective, it is more like a combination of YouTube and Instagram. Video and live content are very popular on Weibo, which has a lot to do with the fact that most Weibo users are young people. 88% of Weibo users are young people under the age of 33.

Like YouTube, there are many "Internet celebrities" or "key opinion leaders" on Weibo, who have won a large number of followers by publishing videos and other content. However, China's opinion leaders have become an important part of the entire ecosystem, driving the growth of their own revenue and the revenue of the platforms they use.

An analyst pointed out that fashion model Zhang Dayi is the most typical example of an Internet celebrity. She has more than 4 million followers on Weibo and sells her designs on Taobao. Her revenue last year reached US$108 million.

Editor: Nancy