Image source @ Visual China
The text | a moment of business, the author | Kuribuki, Editor | Zhou Ye
Whether it is entertainment or the influence of public events, the importance of Weibo is self-evident. From a series of recent events such as the Winter Olympics, the War of Russia and Ukraine, and the Two Sessions, it is enough to show that Weibo has strong user participation.
But the current Weibo can be said to be a domestic and external problem.
Internally, according to a number of media reports such as cover news and Times Finance, Weibo is opening a round of major layoffs. With the chaos in the entertainment industry, Weibo has launched a road of self-help with a broken arm, actively reducing the proportion of entertainment content.
In addition, blind algorithm recommendations, excessive entertainment content, traffic fraud, etc. have made a large number of users complain, Weibo's monthly active user growth has stagnated, financial report data shows that at the end of the fourth quarter of fiscal 2021, Weibo monthly active users were 573 million, but the third quarter of fiscal 2021 Weibo monthly active users have reached 573 million, the same as the fourth quarter.
Externally, with the rise of short video platforms such as Douyin and Kuaishou and community platforms such as Xiaohongshu, Weibo has formed a siege on user usage time and advertising revenue.
However, under the fierce competition in the industry, the attractiveness of Weibo to advertisers is declining. According to the Weibo prospectus, from 2018 to 2020, the total number of Weibo advertisers was 2.9 million, 2.4 million and 1.6 million, respectively. In the first three quarters of 2021, the number of Weibo advertisers was 800,000, down 600,000 from 1.4 million in the same period in 2020.
It is not difficult to see that behind the rumors of layoffs, Weibo's life is not good. Internet advertising business growth slowed, stock prices fell, lack of a second growth curve... Weibo has been in trouble for a long time, how will it break the game?
Weibo layoffs, the days are sad
Weibo, which has always been famous for its hot search, has recently aroused heated discussion due to layoffs and has been on the hot search list of the pulse of the workplace communication platform.
According to Times Finance, Weibo employees who have been certified by job information said on the pulse that Weibo is laying off employees in a large area, and some employees have been asked to take the initiative to leave, and some employees have been interviewed.
These "optimized" employees set up a WeChat group, the largest number of people in the group of more than 200 people, some employees said that the performance appraisal at the end of last year was inexplicably hit the lowest grade, did not get the year-end award, and was dismissed, and some employees said that not all employees with performance D at the end of 2021 were "optimized", "optimization" The main object is to enter the company for about a year, many people with high age are not in the scope of "optimization", but there are also ten-year-old employees who are "optimized".
In the group, some employees said that in this round of optimization, the staff will be laid off in batches according to the length of service, and the working age of one year and two years is within the scope of optimization, not only that, the core department known as the "lifeline" has also been optimized. According to internal employees, the layoffs on Weibo will be as high as 7%-15%.
In response to this, Weibo officials denied layoffs, saying that the company adjusted some organizations (structures) in order to strengthen the focus of advantages and business, give priority to the transfer and placement of the employees involved, and negotiate the termination of labor relations without suitable positions.
But as for how many employees have been transferred and how many employees are negotiating to terminate the labor relationship, Weibo's public relations personnel said that there is no relevant data to provide.
Whether it is layoffs or internal adjustments, it is a fact that Weibo's days are sad. It is facing the problem of falling stock prices, unstable performance, and loss of advertisers.
On December 8, 2021, Weibo officially landed on Hong Kong stocks, but it broke on the first day of listing, and the stock price closed at HK$253.4 on the same day, a decrease of 7.1% from the issue price of HK$272.8. In February, Goldman Sachs issued a report lowering its Weibo target price from HK$347 to HK$305.
Also in the U.S. stock market, the situation of Weibo is not optimistic, and the current market value is less than 10 billion US dollars. As of the close of U.S. stocks on March 14, Beijing time, Weibo's stock price in the U.S. was $20.06, with a total market value of $4.745 billion, down nearly 85% from a high of about $30 billion in 2018.
In fact, in the past few years, Weibo's performance data performance is not optimistic.
Recently, Weibo released the fourth quarter and full year of 2021 financial report. In the fourth quarter of 2021, Weibo's total revenue reached US$616 million, an increase of 20% year-on-year, of which advertising revenue reached US$550 million, an increase of 21% year-on-year; adjusted operating profit in 2021 reached US$829.2 million, an increase of 43% year-on-year, and the adjusted full-year operating profit margin reached 37%.
In the financial report, the Beijing Winter Olympics became a business highlight that Weibo was proud of. Relevant data show that during the Winter Olympics, the total number of Weibo-related topics read exceeded 450 billion, the number of discussions on the whole network was nearly 300 million, the number of interactions was 1.11 billion, and athletes from all over the world posted more than 2,500 blog posts, with a total of nearly 45 million fans.
Looking at these data alone, the performance of Weibo has indeed improved, but this is not the norm of Weibo, and the Winter Olympics, a national sports event, is even more unattainable, and if the observation timeline is extended, it can be seen more clearly.
According to the financial report data, in the whole of fiscal 2021, Weibo's quarterly revenue increased by 42%, 48%, 30% and 20% year-on-year, respectively, showing a slowdown trend. In the whole of fiscal 2020, except for the 9.7% year-on-year increase recorded in the fourth quarter of the camp, weibo's other three quarters all showed negative year-on-year growth.
Weibo's largest source of revenue is advertising and marketing revenue, in 2020, its advertising and marketing services achieved revenue of 1.486 billion US dollars, accounting for 87.9% of revenue, in fact, advertising revenue accounted for the absolute majority of the state has been accompanied by Weibo for many years, since 2018, advertising and marketing revenue has remained at about 87%, in the first three quarters of 2021, the proportion of revenue of the business further increased to 88.5%.
Under the fierce competition in the industry, the appeal of Weibo to advertisers is also declining. According to the Weibo prospectus, from 2018 to 2020, the total number of Weibo advertisers was 2.9 million, 2.4 million and 1.6 million, respectively. In the first three quarters of 2021, the number of Weibo advertisers was 800,000, down 600,000 from 1.4 million in the same period in 2020.
It is not difficult to see that although Weibo's hot search list is still lively and is still the main position for netizens to find hot spots and participate in discussions, Weibo's own life is very sad.
Strictly control the entertainment sector, Weibo cut off its own arm
For a content platform such as Weibo, there is advertising when there is traffic, and there is income with advertising, and the content of stars and entertainment is undoubtedly the existence that can attract the attention of the public, so the content of entertainment stars has also become the most important source of traffic for Weibo.
In 2014, Weibo launched the "Hot Search List" and "Star Force List", and in 2016, it launched "Super Talk", which has become one of the standards for measuring the "traffic" of celebrities, and has also made Weibo an important position for fans to chase stars and PK in the past few years.
Weibo has promoted the development of the traffic economy in the entertainment industry, and in turn, the traffic economy and fan economy have also brought huge profits to Weibo, which relies on advertising revenue.
The Star Power List is a good example. The list is ranked according to the points obtained by the stars, and the score is mainly based on the comprehensive score of the stars in the five dimensions of the number of readers, the number of interactions, social influence, the admiration value, and the positive energy value, of which the "admiration value" requires fans to send flowers, and the price of 2 yuan a flower is needed to be purchased on Weibo.
In order to make their favorite stars achieve good rankings, a large number of fans do tasks every day, spend money to maintain various data, and even operate several Weibo accounts at the same time. A small list not only allows Weibo to obtain cash income, fans are active every day, but also contribute user data and daily traffic to Weibo, driving the rapid growth of Weibo advertising business.
However, with the intensification of irrational assistance, there have been negative incidents such as traffic fraud, online pulling and tearing wars between fan groups, and online violence, and the "rice circle culture" has gradually become deformed.
To this end, the regulatory authorities have also intervened to rectify Weibo. In 2016, Weibo was interviewed by the Cyberspace Administration of China for the dissemination of obscene and pornographic information; in 2018, Weibo was interviewed by relevant departments because of issues such as celebrity power lists and APP data leaks.
Last year, the curtain of supervision in the entertainment field was officially opened, which seriously hurt Weibo's vitality.
On June 15 last year, the Cyberspace Administration of China launched a nationwide "Qinglang · On August 27, the Cyberspace Administration of China issued the Notice on Further Strengthening the Governance of Chaos in the "Rice Circle", canceling the list of celebrity artists, strictly controlling the participation of minors, etc., and strengthening the control of the "rice circle"; on November 23, the Cyberspace Administration of China issued the "Notice on Further Strengthening the Work Related to the Regulation of Online Information of Entertainment Stars" (hereinafter referred to as the "Notice") to further strengthen the online information standardization of entertainment stars.
Subsequently, Weibo launched the road of self-help with a broken arm.
In August 2021, Weibo launched one of its most important entertainment lists, the "Star Power List". According to ZAKER News, the downline of the star power list has directly affected the revenue of Weibo's value-added service business. After the list of star forces went offline, Weibo's value-added service business revenue also showed a downward trend.
According to the financial report, in the second quarter of 2021, Weibo achieved value-added service revenue of $72.1 million, and by the third quarter, the revenue of the business was $69.8 million, and the revenue of the business fell to $65.5 million in the fourth quarter.
In addition, according to Weibo, in the third quarter of 2021, the Weibo rice circle special cleaned up nearly 50,000 illegal microblogs, the Qinglang Action special project permanently banned 1175 illegal accounts, and the juvenile protection special disposal of more than 180,000 illegal accounts; at the same time, adjusted the hot search rules and reduced the proportion of entertainment content.
On the other hand, the relevant regulatory authorities have also noticed ali's influence on public opinion in zhang dayi and other incidents. Perhaps feeling the pressure, Ali wants to quit Weibo. According to sources quoted by Bloomberg, Alibaba plans to sell its 29.6% stake in Weibo, which is worth about HK$17 billion based on the closing price of Weibo's Hong Kong stocks on December 31, 2021. The takeover is likely to be the Shanghai Culture Radio, Film and Television Group, but the negotiations are still in the preliminary stages.
According to the relevant financial reports, from 2018 to 2020, Alibaba, Sina and other related parties accounted for 21.81%, 21.42% and 19.07% of the advertising revenue, respectively. That is to say, without The loss of Ali, an important related party, Weibo's advertising revenue will be affected to a certain extent.
At the earnings report meeting, Weibo CEO Wang Gaofei mentioned that due to the adjustment of the Internet entertainment industry in the second half of last year, there were some negative impacts on the supply of Weibo entertainment content. The entire entertainment industry has gradually adjusted from the model of talent selection and idol economy to the ecology with works as the core, and the cultural and entertainment traffic of Weibo is still in a recovery period, and it is expected that the traffic of the entertainment industry in the second half of this year can recover to last year's level.
With the deepening of the rice circle rectification action, can the cultural and entertainment content of Weibo return to the previous "grand situation"? When the hustle and bustle of entertainment content is gone, what does Weibo rely on to continue to maintain community popularity and user stickiness? When traffic slowly loses, what does Weibo rely on to continue to retain advertisers?
There are many competitors, and Weibo is difficult to hide its decline
Nowadays, in the field of pan-entertainment, although Weibo still has a unique position, short video platforms such as Douyin and Kuaishou and community platforms such as Xiaohongshu have formed a siege on Weibo.
The first is the length of time users use, short video platforms have robbed users of a lot of time.
Analysys Qianfan statistics show that during the period from May 2019 to April 2020, Weibo users used an average of about 600 minutes per month, but only about 20 minutes per day.
According to QuestMobile's march 2020 statistics, the average monthly usage time of Douyin users is 1709 minutes, and the average monthly usage time of Kuaishou users is 1205 minutes. It can be seen that the monthly use of Weibo users is lower than that of short video platforms such as Douyin and Kuaishou.
In addition, Weibo's active user data has also stopped growing. Although the total number of Weibo users in 2021 hit a record high, the growth of monthly active users has stopped, which is not good news for Weibo.
According to the financial report data, weibo monthly active users at the end of the fourth quarter of fiscal 2021 were 573 million, a net increase of about 52 million users year-on-year, with an average daily active user of 249 million, a net increase of about 25 million users compared with the same period last year. However, in the third quarter of fiscal 2021, Weibo's monthly active users have reached 573 million, unchanged from the fourth quarter, and the average daily active users have increased by only 1 million users in the fourth quarter compared with the third quarter.
The second is advertising revenue, where there is traffic, where the advertisement will follow. Since the rapid rise of Douyin and Kuaishou, short video platforms have also been favored in advertising.
QuestMobile, a third-party research institution, pointed out that in the past two years, short video information flow and open-screen advertising revenue have shown a significant growth trend, and advertisers in vertical fields such as sports outdoors, home appliances, and digital 3C, which once preferred information and social platforms, have also fully embraced short videos.
In the top ten media Internet advertising revenue in the first half of 2021, Weibo ranked at the bottom, with revenue accounting for 1.5% from 1.5% in the first half of 2020 to 1.2% in the first half of 2021, and Douyin, which ranked first, rose from 27.7% in the first half of 2020 to 29.2% in the first half of 2021.
Weibo may have long realized that it is difficult to rely solely on advertising revenue, and in recent years, it has actively sought a second growth curve and tried to enter the fields of live broadcasting and short videos, but the products launched have not set off too much splash, and it is difficult to escape the fate of short-lived.
As early as 2015, Weibo spent $150 million to invest in the small coffee show, when the small coffee show attracted many stars to settle in, once ranked first in the short video track, but with the vibrato, Kuaishou very high user participation is different, the video in the small coffee show is mostly filmed and produced by stars and talents, the vast majority of users are just watching and not participating in the production, which led to the small coffee show gradually being forgotten by users.
The oasis, which also has the massive traffic support of Weibo, has been controversial since its launch, and has been accused of being a combination of Instagram and Xiaohongshu in terms of function, which is not new and innovative, and many contents are no different from Weibo, which cannot attract and retain users at all, and finally gradually disappears from the public's vision.
But Sina has not given up on launching new products, hoping to find a second growth curve.
According to Xinyan Finance, Sina Tongcheng recently officially launched a community product "Hobby", which is positioned as a trendy store for young people to create a community. Currently, Hobby supports users to publish three forms of content, namely planting grass notes, video content, and setting up a party in the same city. After the user experience, it is believed that Hobby's homepage is similar to 'short video + B station', "partial tide play".
Today's Weibo is facing internal and external troubles, and the content rectification on the Weibo end is still continuing. Although the hot search on Weibo is still a section of national concern, under the situation of internal and external pressure, Weibo still has to live a difficult life.