Has Tencent (00700.HK) thrown in the towel in the Weibo fight?
The Shenzhen-based tech giant has been running its own microblogging service, or Weibo, since 2010. But in March it opened an official account on its arch rival’s Sina Weibo platform.
This may not mean anything. It’s possible that Tencent boss Pony Ma just wants to exploit his rival’s platform to further extend his company’s reach. But Ma hasn’t updated his own Tencent Weibo account since April, a dead giveaway that the company is undergoing a paradigm shift.
News about Tencent Weibo’s business overhaul started circulating this month. The company confirmed on Tuesday that its Weibo staff will be merged with the news team, while some of the technicians will join the newly launched Weishi, a Vine-like short-form video sharing service.
Adding to the irony is the fact that Weishi accepts logins using Sina Weibo accounts. This means a de facto pullback — Tencent will no longer pour additional resources into its own Weibo business.
Sina was the first to introduce microblogging service in China. Its Sina Weibo, which piggybacked onto Twitter, soon became a big hit. Riding its first-mover advantage, Sina was able to get many celebrities to open their accounts on the platform, enabling it to amass a considerable user base in just one year. Then Tencent launched its own Weibo in April 2010 as Ma’s defense against Sina, according to Shanghai-based news portal The Paper.
Tencent Weibo caught up quickly in the following years, especially after users were able to log onto the service using their QQ or WeChat accounts.
By 2012 Tencent Weibo had a user base of 540 million with 87 million daily active users, surpassing Sina Weibo’s 503 million user base and 46.2 million active users.
Tencent has stopped disclosing the number of its Weibo users since 2013, but Sina notes the number of its daily active users now stands at 66.6 million.
Judging from these figures, it seems Tencent is not losing any ground to Sina in the Weibo war. Its aggregate user base is so massive that it can simply redirect some of the traffic and hits from QQ and WeChat to Tencent Weibo, and business will continue to grow.
Yet, Tencent has already hinted in its 2012 annual report that as the growth of Weibo users in China decelerates, the firm would have to explore new methods to integrate Tencent Weibo into other popular products. There were 280.8 million users of microblogging sites at the end of 2013, down by 27.83 million from a year ago, data from China Internet Network Information Center shows.
Tencent has multiple income streams and many other more important pillar products. As such, the company’s latest Weibo restructuring can only be seen as a decision to trim resources allocated to a mature sector that has passed its golden years, rather than an acknowledgement that it has lost the Weibo war to Sina.
For Sina, a major rival’s retreat may give it extra room to enlarge its Weibo client base, but only if it can find a way to keep their customers from turning to other platforms, such as Tencent’s WeChat.
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