Weibo: User and business monetization remain strong in 4Q17

Weibo's fourth-quarter financial report data still dazzled the market, with revenue increasing 77% year-on-year to US$377 million. The full-year revenue exceeded US$1.15 billion, setting the highest growth rate since Weibo went public.

Weibo attributes the revenue growth to the following reasons: (1) the continuous growth of its user base and the enrichment of its social functions, making it a must-have for advertisers; (2) the continuous improvement of user participation and the comprehensive advertising and marketing product services provided by Weibo in its content distribution system; and (3) the further optimization of social network effects and the further improvement of marketing and monetization efficiency.

In the fourth quarter, Weibo's monthly active users (MAU) reached 392 million, with mobile MAU accounting for 93%. Daily active users (DAU) reached 172 million, with a net increase of 79 million and 33 million respectively compared with last year. This is mainly due to the continued strengthening of network effects and the continued effectiveness of cooperation with mobile phone manufacturers in terms of channels.

Over the past year, Weibo's core information flow products have formed a matrix of "relationship flow + interest flow", further lowering the user's usage threshold and improving the retention and activity of medium and low-frequency users. At the same time, Weibo has introduced machine learning and focused on developing personalized push notifications based on user interests and reminders based on social relationships, which has significantly increased the number of old users returning to Weibo. Currently, among Weibo's monthly active users, the number of recalled users has increased by more than 50% year-on-year.

In 2017, Weibo's video and verticalization strategies achieved remarkable results, further enriching the content ecosystem and consolidating its position as the preferred social platform for content production. In December 2017, the average daily number of Weibo videos posted and played doubled compared with the same period last year, and the average daily number of short videos posted by top users increased by more than 50% year-on-year. In the UGC field, the average daily number of people posting Weibo stories increased by more than 50% compared with the previous quarter, and the number of active users continued to grow rapidly.

Weibo's vertical content ecosystem is becoming more and more complete. In 2017, more than 1,300 content production organizations cooperated with Weibo, with an increase of more than 300 in the fourth quarter alone. The vertical self-media business ecosystem has also made great progress.

In the fourth quarter of 2017, Weibo's brand advertising revenue increased by 98% year-on-year, and the number of advertising customers increased by 34% year-on-year. The customer scale in the fields of automobiles, mobile phones, games, etc. has expanded rapidly. With the upgrade of Weibo's commercial products, the advertising needs of small and medium-sized customers have been accurately met through the continuous optimization of the new advertising platform. In the fourth quarter, Weibo's small and medium-sized enterprise advertising revenue including self-service advertising increased by 57% year-on-year, and the number of customers increased by 31% year-on-year.

In 2018, Weibo will continue to improve its competitiveness through the following aspects: 1. Continue to increase the user base and scale, and market investment will increase; 2. Increase the customer base; 3. Optimize advertising algorithms; 4. Build a business ecosystem with content producers