Data Explains Why Weibo Tutors' Twitter Accounts Are Surpassed by Weibo Students

On the evening of October 18, 2016, Weibo's stock price once surpassed Twitter's, but Twitter regained its position as the leader at the end of the day, with Weibo's market value at $11.226 billion and Twitter's at $11.840 billion. However, compared with Weibo's strong performance and stock price trend, Twitter, which was plagued by negative news, was inevitably in decline. Even the rumors of its sale were overturned one by one, and its stock price fell to the bottom.

What's wrong with Twitter? How does it compare to Chinese students' Weibo? Or is Weibo just an exaggeration?

Revenue comparison: Twitter makes more money, but loses more, Weibo is already profitable

From the second quarter of 2016, Twitter's revenue was $600 million, while Weibo's was only $147 million. Twitter's revenue was four times that of Weibo; but Twitter made more money and also lost more, while Weibo, which made money in RMB, has already achieved profitability.

In terms of growth rate, Weibo performed better, with a year-on-year increase of 38%, while Twitter's growth rate has slipped to 20%.

Figure: Comparison of Weibo’s revenue and profits with Twitter

From company financial report, 199IT graphics

User growth: Weibo user growth is strong, while Twitter user growth is stagnant

As of the second quarter, Twitter had 313 million monthly active users, up 1% from the previous quarter and 3% from the previous year; while Weibo had 282 million monthly active users, up 33% from the previous year and 8% from the previous quarter.

As a microblog in the global market, Twitter’s user growth ceiling should be much higher than that of Weibo. However, we believe that the reason for the poor growth is largely related to Twitter’s weak operational capabilities, slow follow-up on photo and video social networking, and failure to operate opinion leaders, celebrities, and Internet celebrities. It is precisely because of poor operational capabilities that celebrities and Internet celebrities, who are extremely attractive fans, have fled to other platforms, such as Facebook, Snat, and Instagram. In addition, the global distribution of Twitter users also makes it difficult for it to focus on specific markets when operating and unable to trigger social events.

Figure: Twitter user operation data

From company financial report

Competitive environment: Twitter is in a state of chaos, while Weibo is on a flat track

Twitter's most direct competitors include platforms such as Instagram and Snat, as well as new video social platforms such as musically and live.me. Of course, Facebook has also diverted a large number of Twitter's influencers.

In contrast, as Tencent strategically abandoned its Weibo business, Weibo has basically been the only one in the Chinese market and is invincible. In addition, Weibo has quickly followed up on photo social networking and short video social networking, and has used celebrity strategies smoothly, so its position is solid.

Figure: Ranking of monthly active users of social applications in September 2016

From Analysys Data

Commercial realization: all rely on advertising

About 90% of both revenues come from advertising, such as brand advertisers, SME advertisers, etc. Twitter's other revenues mainly include data licensing, while Weibo's other businesses also include revenue from game operations.

Alibaba's advertising investment on Weibo has been significantly reduced since 2016. Alibaba's reduction shows that the effect of Weibo's advertising is not satisfactory. On the other hand, Alibaba has built its own ecosystem of Internet celebrities, and live broadcasts have attracted many Internet celebrities to participate, which may be detrimental to Weibo's Internet celebrity e-commerce.

Fortunately, the number of advertisers on Weibo SME has grown rapidly, compensating for the negative impact of the reduction in advertising spending by godfathers.

Figure: Comparison of Weibo and Twitter revenue

Data from company financial reports, drawn by 199it

Earning power: Twitter is better, is it because of the US dollar?

In the second quarter, Twitter earned an average of $1.92 from each active user, while Weibo earned $0.52. This seems to be a gap of 3-4 times, but advertisers in different countries have different investment levels. It is difficult to say that Weibo's monetization ability is definitely 3-4 times that of Twitter. Moreover, Weibo's stock price has caught up with Twitter. So the question is, which one is cheaper?

Finally, let's take a look at the stock price charts of Twitter and Weibo. Do we need to judge heroes by their stock prices? Who is at the bottom and who is at the top? Who can save Twitter?