Boston, MA 05/22/2014 (wallstreetpr) – Accelerated spending by stakeholder Sina Corp (NASDAQ:SINA) to increase users has led Weibo Corp. (NASDAQ:WB) to report a wider net loss in its first quarter. The shares of the Chinese microblogging service tumbled by nearly 10% on Thursday in response to its results.
Net Loss Widens
Weibo Corp. (NASDAQ:WB)’s net loss in the first quarter came in at $47.4 million, in comparison to a loss of $19.2 million in the previous year, as per the statement furnished by the company. However, the loss came in line with preliminary estimate issued by the company earlier. Weibo was successful to enhance its daily active users by 37% in the first quarter as nearly 618 million internet users in China shifted to content on their tablet computers and smartphones. Also, CEO Wang Gaofei is stepping up investment in product development and marketing to keep competition at bay from rivals like WeChat messaging application from Tencent Holdings Ltd.
Wang said that Weibo is occupying a major portion of medium for Chinese users to generate and distribute content publicly. He added that in the coming years, the company’s strategy will be to take advantage of the rapid growth in the country’ internet mobile user base and to benefit from the core features of its platform. Sales during the period doubled from $25.9 million to $67.5 million over the last one year. As far as the second quarter is concerned, Weibo projects net revenue in between $74-$76 million, which is double of what it earned earlier.
WeChat A Bigger Trouble
Weibo Corp. (NASDAQ:WB), which is also backed by Alibab, functions as social microblogging site in China in a way similar to Twitter Inc. Its daily active users grew to 66.6 million during the first three months ended on March this year. The company is against a fierce competition from WeChat, which according to Morningstar analyst could significantly limit the active time of Weibo’s users.
