Sina Weibo: Losing Its Edge? 新浪微博：正失去其优势？
I have to admit that I’m becoming just a little bit confused by all the user data coming from China’s top 3 microblog operators, which seems to paint a slightly different picture from the one that Sina (Nasdaq: SINA) would like everyone to believe about the dominance of its popular Sina Weibo service. My attention was first drawn to the subject by a new media report in which NetEase (Nasdaq: NTES) says its microblogging service now has more than 260 million registered users, up sharply from 180 million just 2 months earlier. (English article) That number seemed to be a big narrowing of the gap with Sina Weibo, which had 360 million registered users at the end of June.
Then I had a look at data for Tencent (HKEx: 700), which is already the undisputed leader in instant messaging with its PC-based QQ service and more recently with its mobile WeChat product. So I was quite surprised to see that Tencent’s microblog product had a massive 469 million registered users at the end of June, or 30 percent more than Sina Weibo.
What’s more, Tencent also said its figure included 82 million daily active users, a much more useful figure for seeing how many people are actually using the service. By comparison, Sina said its Weibo service had just 36.5 million active users, or less than half of the Tencent microblog total. The NetEase report didn’t give figures, but it’s probably safe to assume that it probably has more than 20 million active users also.
So, what conclusions can a person take from all this? The most glaring one in my view is that Sina Weibo doesn’t dominate the microblogging space the way it wants everyone to believe, and that Tencent is really the major player. Perhaps that’s not too hard to believe, since Sina and all the others effectively stole the microblogging concept from Twitter around 4 years ago after Twitter itself got locked out of the Chinese market.
Sina then quickly built up a big user base and spun off Sina Weibo into a separate unit last year amid non-stop talk that it would turn the company into a profit center before a highly anticipated IPO for the service. But despite spending lots of effort in that direction, Sina Weibo is still not a very big money earner, accounting for just 10 percent of the company’s total revenue even as it has drained Sina’s profits. What’s more, the Sina seems to have introduced very little innovation to its service, which still looks largely the same today as it did 2 years ago.
Tencent, by comparison, has a much better track record at innovation, as reflected by its rapid build up WeChat, or Weixin in Chinese, which has come to quickly to dominate the mobile instant messaging space with 200 million users. (previous post) I have no doubt that Tencent has also capitalized on its instant messaging dominance by converting many of its QQ and WeChat subscribers into Tencent microblog users. The rapid rise of NetEase is also a bit surprsing, as that company wasn’t previously considered a major player in the space.
At the end of the day, my main conclusion from all this is that all 3 of these companies probably have very similar microblog products, leaving web surfers to choose from which ever is most convenient for them. That reality will play to Tencent’s advantage the most, as it can recruit users to its microblogging product from its other popular services. NetEase will can also draw on its large base of online gamers to build up its microblog service. Meantime, Sina doesn’t really have a similar advantage in terms of big user bases for its other services. That means Sina’s own Weibo service could see its perceived dominance rapidly fade in the next year, even as the service continues to drain profits and resources from the parent company.
Bottom line: The latest data indicate Sina is rapidly losing its perceived edge in microblogging to Tencent and even NetEase, creating a 3-way race for dominance of the space.
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