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.
Twitter's Chinese competitor Weibo is growing fast and going international. With a new seven-story ad in Times Square, the company is bragging to Americans about reaching the 200-million-user milestone, a feat that took Twitter almost five years to accomplish. It took Weibo less than two. The meteoric growth shown in the ad campaign shows that Weibo is poised to go international and challenge Twitter on its own turf.
Owned by Sina, China's largest Internet portal, Weibo has two major advantages over Twitter: China's censorship laws and China's population. Twitter has been banned in China since 2009, the same year that Weibo was founded. Weibo, which translates as "microblogging" in Chinese, has been growing unchecked since then, and thanks to China's massive population, owning that market makes Weibo the world's second most popular microblogging service behind Twitter. Twitter users can access the site using a virtual private network (VPN), but analysts estimate that only amounts to 50,000 to 200,000 users. Meanwhile, Weibo is gobbling up a whopping 87 percent of the pageviews on microblogging sites in China. Weibo started marketing in Japan earlier this year, and Zacks Equity Research thinks the rapid growth will carry over "despite significant competition."
Until the launch of an English version, it's hard to say if Weibo can compete with Twitter outside of China. So far, however, Sina's Weibo is winning the revenue battle. Reporting a record high traffic numbers in July, Twitter is growing in the United States, but they're still struggling to make money. Kenneth Rapoza at Forbes thinks this makes all the difference:
It’s hard to declare a winner when the Chinese and US markets for these services are like comparing apples to apple juice. One exists in a free, yet mature market. The other exists in a less free, and growing market. But looked at from a pure number’s standpoint, China’s Weibos seem to be bringing in more ad revenue, have more users than Twitter, including Twitter worldwide, and enjoy the fanfare of the US investment community that’s helped push Sina shares 64.11% higher as of market close May 17; 224% higher over the last 12 months, and 320% over the last five years. Sometimes, you get what you pay for when you buy the winner.
As Sina works hard to prop up Weibo, their profits are slipping. But from a business perspective, Weibo is already as big as Twitter and the international expansion can only make it bigger.
This article is from the archive of our partner The Wire.
