Weibo adverts on the rise as Sina looks for revenue
Mainland microbloggers report seeing more advertising postings on the popular service, as internet giant Sina tries to monetise huge user base
Users of Sina Weibo, a Twitter-like microblogging website on the mainland, are complaining about a growing number of advertising postings on the platform in recent months.
Yu Yang, a company secretary in Beijing, said she had recently noticed a lot more posts on the website advertising cosmetics, clothes and healthcare products, which distracted her when she was surfing for information.
Sina, a major news portal on the mainland, launched its weibo product in August 2009. The social networking service had more than 500 million users at the end of 2012, up 74 per cent compared with a year earlier, according to the company. However, until now it has not been able to mine that user pool for an equally big increase in revenue.
The Nasdaq-listed company's 2012 net revenue grew by 10 per cent year on year to hit US$529.3 million, while advertising revenue was US$412.9 million, a 12 per cent increase. That means nearly four fifths of Sina's income is generated by advertising, the traditional way for internet companies to make money.
You Tianyu, a senior analyst at iResearch, said the income generated by Sina Weibo last year - US$66 million - missed the expectations the market had for it when it captured investors' attention with dazzling growth over the previous two years.
But You said the failure to monetise its user base was common to all social networking sites.
"Globally, social media platforms are all weak in profitability," You said. "The industry hasn't found a good way of generating profits from the service yet. Having said that, Facebook has some established products like sponsored stories, but weibo hasn't figured out any successful product yet."
