Lei Feng network (search "Lei Feng network" public number attention): Yin Sheng, the author of this article, Internet value researcher, former Forbes deputy chief editor.
Abstract: In the days of being away from the early old users, microblogging is more valuable. In May of last year, “Weibo seems to have shown signs of recovery,†Yin Sheng reminded Weibo of the changes that were taking place. In November, he wrote “50 billion US dollars in Weibo is still a high probability event.†In just nine months since then, Weibo’s market value has risen 1.6 times to nearly 9 billion US dollars.
As an old Weibo user, I have rarely logged in my Weibo account once: At best, I can only be considered one of Weibo’s 282 million monthly active users, and if I’m five years old, my daily attention will be Above it, just like now I am on WeChat. However, this will not prevent Weibo from becoming a good business. Even if Weibo is not favored by anyone, I firmly believe this.
As early as in 2013, when Alibaba announced that it had invested in Weibo, I wrote an article “Ali endorsed and Weibo’s valuation will reach 60-90 billion U.S. dollars three years laterâ€, referring to the valuation levels of Twitter and Facebook at the time. It is believed that its valuation in the first half of 2016 is expected to reach 6 to 9 billion U.S. dollars.
According to expectations at the time, Weibo’s revenue in the past four quarters was expected to exceed 300 million U.S. dollars, and the actual results were far better than expected, reaching 540 million U.S. dollars, but Twitter, one of the references, had a large valuation level. Decline. At present, Facebook's dynamic market sales rate is about 16 times, and Twitter is about 5 times. At that time, Facebook's market sales rate is 12.5 times, and Twitter's valuation is as high as 30 to 40 times.
Weibo is currently being approached as a business and is approaching Facebook, although it is more like Twitter in terms of product form - Facebook has always maintained a high growth in revenue and profit, while Twitter not only has a declining income growth rate, but is still in a loss. - Weibo is showing more and more obvious trend of growth in revenue and profit.
In the past quarter, Weibo’s revenue increased by 36% to US$146.9 million, and net profit increased from US$4.2 million in the same period last year to US$25.9 million. In the first quarter, revenue growth was slightly lower, with an increase of only 24%, but earnings also increased substantially - from a loss of $3.1 million in the same period last year to a profit of $7.1 million. However, if the effect of Alibaba is adjusted out, the revenue growth in both quarters may exceed 50%, which is much better than the same period of last year.
According to the 2013 share subscription agreement, Alibaba will spend 380 million U.S. dollars in marketing expenses in Weibo during the next three years. In reality, 2013-2015 invested 49.14 million U.S. dollars, 108 million U.S. dollars, and 144 million U.S. dollars respectively. The U.S. dollar accounted for 26%, 32.3%, and 30% of the total revenue for the year. However, in the first two quarters of this year, this figure dropped sharply to 9.3% and 8.7%, respectively.
It is currently unknown how Ali's investment strategy in Weibo - the cooperation between the two companies has just expired three years - but it is certain that Ali will still be one of Weibo's major strategic customers, so you can expect Ali. The adverse effects of the factors are now approaching the worst.
The impact of another unfavorable factor has also been digested similarly, that is, revenue from value-added services. This income includes items such as games, membership fees, and data opening. When the company first went public, the business was highly hoped for. 2013 In 2014, this revenue accounted for 21% of all revenues, but then the business experienced stagflation. In the first two quarters of this year, the percentage of revenue contributed by the business to total revenue has dropped to 16.8. % and 13.4%.
The revenue model of Weibo increasingly relies on advertising, which is conducive to establishing cost and efficiency advantages. This includes not only the relevant experience of focusing on the advertising model, but also the efficiency of the sales network, and it is also consistent with the Weibo body. Media attributes, for the media, advertising is the most accepted revenue model.
On the contrary, value-added services are either not Weibo's expertise, or they themselves may hurt its value as a stand-alone platform, and its focus is also different from the advertising model - the advertising-based business model requires companies to always dominate the content, Value-added services pursue the realization of existing content and traffic, and even invest in completely different specific services. This may cause the company to miss out on those investments that are crucial to the former model, such as short video and live broadcast.
If you look at the past few years as a whole, Weibo has indeed experienced a trough, but in the past few quarters, both in terms of business indicators and financial indicators, have established a clear recovery trend: in the impact on Ali. The adjustment shows that, starting from the second half of last year, Weibo's revenue growth began to stabilize and rebound at a low level, while the first two quarters of this year showed a clear trend of re-growth.
In terms of business, the proportion of active users in the active users from 2012 to December 2015 was 48%, 47.6%, 45.9%, and 45%, respectively, showing a year-on-year decline. The first quarter is generally the fastest growing Weibo user quarter, and the next quarter reflects the user's ability to retain, and in the past two quarters, Weibo accounted for 46% of daily livelihoods. And 44.7%, higher than 45% and 43.9% in the same period of last year, which is evidence of increased user activity.
In May of last year, "Weibo seems to have shown signs of recovery," Yin Sheng reminded Weibo of the changes that were taking place. In November, he wrote "50 billion US dollars in Weibo is still a high probability event." At that time I was still not sure whether the signs of Weibo's recovery had taken the company to a certain new growth track, but even then, I still think Weibo's market value will soon return to 5 billion US dollars, and it will enter 60 to 90. The probability of a one-hundred-million dollar range is also rising (if you bought microblogging stocks at that time, you now have a 1.6-fold return).
Compared to these external indicators, some of the more in-depth indicators can give more powerful, but often easily overlooked, information that makes me more optimistic than the average person: the value of a platform. Fundamentally, it depends on whether it has mainstream value recognition and entrance status, and whether it has irreplaceability.
Although WeChat has attracted those early Weibo users with the rise of its more effective social and communication capabilities, the popularity of smart phones and the sinking of users, the rise after 90 and 00, and the irreplaceable media attributes of Weibo, As well as Weibo’s timely investment in vertical content, short video, and live broadcast, they all redefined the value and entrance of Weibo as a user of the mobile era—the efficient creation of content and the establishment of links between unspecified users. And effective ways to share content.
Now, the core users of Weibo have changed greatly with my era as a core user. Users in second-tier cities and below have already accounted for more than 70% of all users, and 80 and 90 have exceeded 80%. Bo did not give the ratio after 90 and 00, but in the same interest-based network Baidu Post Bar, after 90 and 00 after more than 60%), this new intergenerational users usually emphasize themselves, and Weibo provides The richness and freedom just cater to this need, and now it is more like a hybrid of Tieba, QQ Space and traditional Weibo.
At the same time, the current value of Weibo is irreplaceable. The large-scale over-expectation of the traditional media in the Chinese market has collapsed. The media's centralized supply structure has been disintegrated and personal media has exploded. This has made the value and scarcity of Weibo visible. In the US market where Twitter is mainly located, traditional media influence remains. Higher, they are still the main content providers, which is good for Facebook with stronger distribution channels. Even so, in the field of event propagation, Twitter still has stronger power than Facebook. This is precisely because it is used as a news item. The value of the centralized creation and distribution platform is related.
Therefore, the future value of Weibo depends on its ability to maintain this irreplaceability and respond to possible new trends as it does to new forms such as short video and live broadcast. - It did not do it by itself, but invested in a company to seize the two opportunities, which not only gained sufficient flexibility in the mechanism, but also avoided its shortcomings in product experience. Its opponents include not only WeChat, QQ, and Post Bar, but also emerging content applications such as today’s headlines, as well as potentially new content portals.
But for quite a long time in the future, I can't see who can replace this position of Weibo. WeChat possesses such potential, but it is essentially a closed network based on acquaintances, and depending on this kind of network property is an important survival basis, which hinders its replacement of the current value of microblogging. The video advertising has also reserved sufficient growth potential for the company, and its UGC model allows it to have a better cost structure than traditional video sites such as iQIYI and Youku Tudou.
Therefore, the valuation of Weibo should also reflect the re-establishment of its value position: According to Facebook's current dynamic sales rate, give Weibo 15 to 20 times the dynamic sales rate, which is equivalent to 8 to 11 billion US dollars of the estimate Another method is to compare the value of daily active users. At present, the market value of each daily active user of Twitter is approximately 90 US dollars, while Facebook is more than 300 US dollars, considering that the solid status of Facebook users has not been comparable to Weibo. , so Twitter is more comparable.
If you count the potential value of acquired, Twitter will still be a company more than 20 billion US dollars, and its value of each user may exceed 140 US dollars. Therefore, we can try to give Weibo a relatively conservative valuation of $90 to $110 for each active daily user. The corresponding company's valuation is 110 to 14 billion US dollars.
Among the two indicators, I prefer the latter, the user value indicator, to reflect the potential value of Weibo’s video advertising, and the establishment of a profitability trend—according to the current earnings growth trend, its P/E ratio will soon fall to Less than 100 times. Weibo rose 12.48% yesterday to 41.81 US dollars, the market value of nearly 9 billion US dollars, but the relative valuation of 110 to 14 billion US dollars, there are still 25 to 55% of the space.
The value line (jia-zhi-xian), an internet value thinker, and the most influential self-media of Tencent Technology 2015, is the WeChat public number of internet value researcher and former deputy chief editor of Forbes China. You can also go to snowballs to view Yin Sheng's historical articles, or add one-on-one communication with Yin Sheng by micro-signal jiazhixian_1 (add real name, industry, company). Affirmation: The content is for reference only and is not a basis for investment decisions. I do not own Weibo stocks.
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