Sina (SINA) reports earnings on November 15th.
The Street expects:
- Revenue: $146 million
- EPS: $0.11 per share
- Q4 revenue guidance: $152 million
Heading into earnings, investors can expect continued ramp-up of Weibo monetization.
In Q2, Weibo generated $10 million in revenue. For this quarter, I expect Weibo to generate $15 million in revenue and $21 million in revenue for Q4 due to increasing advertiser adoption.
Looking beyond the quarter, investors can expect continued momentum in Weibo's growth as Sina invests in new social networking features and launches a new monetization model. I expect Weibo to achieve at least $120 million in revenue for 2013 due to a continued increase in the active user base, rising adoption of Weibo's social ad system, and increasing accuracy of Weibo ads.
In October, Sina launched Weibo Version 5, which features an enhanced homepage, increased privacy, and an improved broadcasting method for tweets and emoticons.
The enhanced homepage features a larger profile picture and allows users to list relationship status, sexual orientation, and organize favorite apps for convenient use. I view this as a major step forward for Weibo to gather user data to create a more effective ad delivery platform. In my prior thesis on Facebook (FB) (view Facebook report) and Renren (RENN) (view Renren report), I discussed my belief that real-identity social networking platform is a superior advertising platform because ads have greater reach, increased relevance, and wider amplifier effect than traditional online advertisements. As Weibo accumulates additional information about its users' profiles and interests, it is likely that Weibo will become a more effective social ad platform than Renren, which currently is the only real-identity social networking site in China.
Aside from the enhanced homepage, Weibo also introduced different layers of privacy settings such as reading tweets that are sent specifically to them and comment-only tweets that cannot be re-tweeted. I believe these increased privacy features can greatly improve user experience and stickiness in the long-term.
On the monetization front, Weibo is expected to launch a new ad product called "Follower Headlines," which are promoted tweets from corporate accounts and are charged on a Cost per Fan Impression basis. In addition, mobile ads will feature ads on the start-up page and next to the tweets.