The commercialization of Sina Weibo

Just published the "micro-Bo fee: Sina Sohu Mutual pinch" This article again pulled us back to the June 20 of the war of words. In a nutshell, Sina wants to make money, Sohu does not want to let Sina earn money. Before we go into the subject, we'll talk about the gossip.

It is due to Sina Weibo on June 19, the introduction of membership services, a monthly fee of 10 yuan, you can enjoy 15 privileges, including the number of people with a limit of 2000, VIP special logo, etc. Sohu, vice president of product department in Sina function on the day that said:

Sohu Weibo will never charge, we think, Sina Weibo charges on the user is bad, but for Sohu Weibo is good, welcome to all the Sina Weibo users are charged to move to Sohu Weibo.

Not only "say", Sohu Weibo also "do", but is targeted to breakthrough point. Sohu Weibo launched the "Creative template weekly push new" "Micro-blog Line function" "Dynamic Avatar Free" and other functions, are targeted at the Sina Weibo membership fee services.

Sohu behavior is not ruthless, people collect money things, you directly free of charge, with the Chinese saying that this is called "drastic". Like the same as for the market to sell pork, others 10 yuan/kg, you directly free, two people have to pull the knife to split each other. But Sohu Weibo is too marginal, the move is obviously a hot spot (think about if Sohu for Tencent). Although the Vice President welcomes people to move to Sohu Weibo, enjoy a "member-level" service, but it is estimated that this factor will not go too many people. This is a social network, not a functional product; Social is the root, the function is embellishment-when Sina Weibo function is so weak, the development so fast.

But after two years, especially after another powerful competitor, Tencent Weibo, has become increasingly important. We can clearly feel that the first two years of the August 14, 2009 Sina Weibo official test, the function of innovation speed is very fast, product iteration speed is quite entrepreneurial team style. But since the end of 2011, Sina Weibo has not felt a particularly encouraging improvement, as Sina is thinking of the development path of charging more outstanding functions.

Sina microblog commercialization

Sina CEO Cao Chao has been the external caliber has been "micro-bo profit is not anxious", but the first quarter earnings losses of 13.7 million of dollars, Sina Weibo finally "take the opportunity" to start commercial attempts. Sina Weibo member function itself, is obviously following the "Micro Bo Friends", copying Tencent's another move. The former is the envy of Tencent's user viscosity, the latter is the envy of Tencent's value-added services revenue capabilities.

There is no reason for this envy.

According to Sina's May 16 earnings report, the first quarter revenue of 106.2 million U.S. dollars, net loss of 13.7 million U.S. dollars, operating losses of 18.1 million U.S. dollars, and compared with the same period last year, Sina is still profitable, profits reached 15 million U.S. dollars, operating profit is also positive, to 10.1 million U.S. dollars.

The loss is the third operating loss since 2002, the first two are 2009 years of Four seasons, 2011 three quarter. The former for Sina Weibo online in the quarter, and micro-blog operating expenditure increase has a direct relationship, but the deficit gap is not small, only 3.42 million U.S. dollars; 2011 Three-quarter net loss of 336.3 million U.S. dollars (including the depreciation of goodwill and other factors), operating loss of 59.8 million U.S. dollars (the previous year for operating profit of

For the first quarter of this year's losses, Chao said it was "China's macroeconomic weakness, the initial quarter of Sina's brand advertising business growth slowdown" caused. He also mentioned the microblog commercialization program:

We have started to test water micro-BO brand advertising business. This advertising product is driven by a referral engine based on the social interest spectrum and is expected to have a real impact on our brand advertising business in the second half of this year. The initial feedback from microblogging advertisers is encouraging, and we believe it is essential to continue to make significant investments in social media and related projects.

Why is the "membership fee" direction?

The "Weibo brand advertising" direction is a proven success for foreign peers such as Facebook and Twitter. But "member fees" obviously have no relationship with foreign companies, but Tencent has been slowly groping out of the reliable model. Sina will make the most of the move to Tencent, some analysts are not optimistic:

Now personal value-added this piece is more like Tencent to meet some users, entertainment, honor, appeal, is not the basic needs of Sina Weibo users need to think about Sina. In other words, what is the fundamental appeal of Sina Weibo users to motivate them to pay? Sina is in fact not seize the user this demand, now the need for this business is actually to meet the basic requirements of Tencent users, this product is what it is not important, it is important, is not the basic needs of docking users.

The outside world, Sina has always been a media company, from the "attack" reported a shot, to Sina blog, and then to Sina Weibo, Sina presented temperament are media companies. And in the first quarter of this year's earnings, 74% of the revenue came entirely from advertising. If the social is Tencent's life and Root, no doubt Sina's life and Root is "media", but also the media's inertia advantage, just started micro-blogging operations, Sina Blog will be the same as the celebrity of Sina Weibo, for Sina to be handy. From now on, Sina Weibo "mature" users, for Sina, that is a good thing is bad--the benefits can be youboy, play from the advantages of the media, promote the development of various events; The disadvantage is that they are too mature, Tencent has successfully put the revenue channel to build on the basis of the, Will Sina Weibo's users pay for these innocuous (irrelevant media) features?

As advertisers become increasingly aware of the importance of advertising outside the traditional media--of course, the objective reason is the popularity of mobile devices, advertising coverage of advertisers to make rigid requirements, Sina advertising revenue may further decline, which will really threaten Sina's existing business model. Perhaps this is the real reason to force Sina to change, the commercialization of Sina Weibo may be just the beginning.