WB - Weibo Pins Hope On Olympics To Boost Its Advertising Revenue | Benzinga
Key Takeaways:
- Weibo’s first-quarter revenue fell 4%, hit by declining income from advertising and value-added services
- The company is banking on the Olympics and summer vacations to boost revenues later in the year
By Fai Pui
It’s a familiar story in the business world: a pioneering company stakes out a new market but after a few years comes under pressure from new kids on the block.
Such is the case for Weibo Corp. (NASDAQ: WB), one of China’s earliest social media platforms. The microblogging site launched nearly 15 years ago as a popular forum for news and comment about celebrities in the media spotlight. But trends move quickly in the social media sphere, where sites such as Douyin, Kuaishou (1024.HK) and Xiaohongshu have gained large followings in recent years.
Competition from newer entrants specializing in video or streamed content is making a dent in Weibo’s earnings. In late May, Weibo reported that its revenues fell 4% to $396 million in the first quarter from the same period a year earlier, and were flat when adjusted for exchange rate moves. Its net profit plunged 51% to $49.44 million, although the drop was just 4% to $107 million on a non-GAAP basis.
Attracting advertising revenue has been a challenge for many major social media platforms in recent years. China’s sluggish economic recovery is a key factor in that trend. But more established sites such as Weibo are also losing a large chunk of advertising income to the newer challengers in the social media market.
Weibo’s revenue from advertising and marketing fell 4% last year. The figure did rise 3% in the fourth quarter of last year but lapsed back into negative territory in the first quarter. In the first three months of this year, advertising and marketing revenue fell 5% from the same quarter a year earlier to $339 million, which was 16% less than in the prior quarter. Excluding advertising revenue from Alibaba, the first quarter total fell 6% to ...