Twitter is going through some tough times, but this is the case with its Chinese rival Weibo, also known as the Twitter of China. Weibo started in 2009, and suddenly it is worth more than Twitter. Weibo’s market cap stands at $11.35 billion now, compared to Twitter’s $11.34 billion.
A quick rise for Weibo
What really makes the achievement of the Chinese firm so impressive is that it took less than seven years to achieve this. For the Chinese social media giant, it is an incredibly quick rise as in early 2014, its IPO valued it at $3.4 billion. The micro-blogging site was valued at $26.8 billion on that same day, notes techinasia.
For the second quarter, Twitter raked in about $602 million, which is more than quadruple that of Weibo. However, Weibo showcased robust momentum in revenue and user growth, notes Xinhua. Compared to Twitter’s 3% growth in monthly active users by the end of Q2, Weibo’s number of active users surged 33%. Going forward, the gap between Twitter and Weibo is expected to widen in favor of the Chinese firm. Analysts are bullish on the Chinese firm, while Twitter’s future appears uncertain.
Twitter’s uncertain future
Much of Twitter’s trouble can be attributed to its failure in adding more users. In the past 12 months, the micro-blogging giant lost 5 million monthly active users. The current tally is at 313 million. In comparison, Weibo is still growing its user base, which is now at 282 million. In the past year, Weibo pulled in 70 million new active users.
The U.S. firm was even rumored to be up for sale after a disappointing second quarter, but there are reports that it is struggling to find potential buyers. Salesforce, Disney and Google were reportedly interested in buying the social network, but they all appear to have backed out.
In the past few weeks, speculations about the U.S. firm trying and failing to find a potential buyer have pushed the stock down further. For a short period of time in early 2014, the micro-blogging giant was worth just over $40 billion, notes techinasia.
Weibo not without troubles
Alibaba has a 30% stake in Weibo, which is not without its troubles. In areas like brand accounts, online stores, and cashless payments, WeChat has beaten Weibo. WeChat is another hugely popular messaging app with just over 800 million users.
However, Weibo holds viral power and an ability to make money from ads. Its ad revenue is up 45% from last year, and it has been quick to tap into China’s new web trend, which is live-streaming. This is a new source of revenue for the Chinese firm as it lets viewers purchase virtual gifts for streamers, notes techinasia.
On Tuesday, Twitter shares closed up 0.6% at $16.83. Year to date, the stock is down more than 24%, while in the last year, it is down almost 46%. The stock has a 52-week high of $31.87 and a 52-week low of $13.73.