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We took some excerpts from the full Weibo IPO roadshow transcript to tease out more of what this company is all about. They are marketing their IPO now in what is a tough market. Twitter (TWTR) is off nearly 40% in the last eight weeks. Weibo_Logo

As the company management sees it here are some high points:

  • Weibo is a social media platform in China for people to create, to distribute and to discover content. We launched our service in the third quarter of 2009 and within a four-month period, we launched our first mobile app.
  • We measure things in three dimensions. One is DAU, which is our daily active users. [Another] is MAU, which is our monthly active users and the [third] is Feeds Per MAU, which measures how active people contribute content on Weibo.
  • More than 70% of our users access Weibo on a monthly basis using mobile devices such as mobile phones or pads. Our advertising for mobile has grown from $11 million in 2012 to $42 million in 2013.
  • Weibo has over 25% market share in terms of MAU. [Our user base is] 143 million plus in the month of March.
  • After this IPO, Sina will still be the controlling shareholder of the company. We struck a deal with Alibaba in April of last year.

Outside of the snippets above we found one long passage that captures most of what we find interesting about this company and this deal:

“With Alibaba’s payment already connected to our Weibo payment and
Alibaba’s users connected to a Weibo account — any merchant, any
service provider can launch a campaign on a Weibo page in the form of
a card and they can promote that card in an information feed using our
promote feed product or other in the promotion product. Any user can
click that card within the information feed to see the product or
service and click the button to make a transaction. Once [the user
tries] to make a transaction, the shipping information can be filled
automatically if you are an Alibaba user and the payment information
can [fill the field] automatically if you are an Alibaba-paid user.
That makes the user experience so great [and] so easy for the entire
sales and marketing transaction.”

This has considerations for US market leaders, especially Amazon, Twitter and Facebook and to a lesser degree players like Yelp (YELP), OpenTable (OPEN), Angie’s List (ANGI) and Care.com (CRCM).

Going forward the company will be investing heavily in marketing and engineering as they expand their footprint in 3rd and 4th tier cities in China.

Another interesting takeaway is about their strategy to simplify the product for late adopters:

“One of the initiatives we’re going to take is to introduce a light
Weibo version product to these third and fourth-tier cities, because
our research indicates that in those cities, people actually don’t
like these very complex products from the very beginning and they
don’t care too much about long-tail content. What they care more about
is a single product with headlines every day — what’s the hottest, the
best, the most important news content every day. So, we’re going to
introduce a light version of the product in these areas so we can make
more people come to our product and also [make it] easier for these
people to activate those products. And when they become a frequent
user, we will converge these into log-on users going forward.”

There are other parts of the full transcript that suggest models like mobile gaming (Glu Mobile – GLUU) and enhanced digital advertising technology (FireEye FEYE, RocketFuel FUEL and Rubicon Project (RUBI) are important in the battle for mobile content and commerce.

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