Kaifu Lee: Rumors of Weibo’s Death Are Exaggerated

We’ve written a lot about the rise of WeChat and the danger it poses to Sina Weibo. Last night, a weibo post (ironically enough) suggesting Weibo may be very overvalued from internet analyst Qian Hao was making the rounds, and it caught the eye of Innovation Works founder and former Google China head Kaifu Lee, who stepped in to defend the microblogging service.

Qian’s post, which was retweeted over a thousand times and attracted hundreds of comments, says that Weibo is overvalued because Weibo users are fleeing the service because of real-name controls, because their private social interactions have moved elsewhere (i.e., to WeChat), and because they’re very sensitive to advertising (which makes monetization difficult). Kaifu Lee disagrees:

Sina Weibo activity has gone down, but the gloomy predictions are greatly exaggerated: 1) the fact that Weibo is being so tightly controlled shows that it has vitality; 2) with regard to private interactions moving elsewhere, Sina Weibo was never really the place for that in the first place, so that’s not much of a loss; 3) to deal with user opposition to advertising, Sina can try user behavioral analysis along with targeted ads and e-commerce integration. Of course whether or not that will work depends on how it’s implemented.

Lee’s first point is something that had never occurred to me as a reason to hold out hope for Weibo, but it does make sense. Censors wouldn’t bother keeping such a tight grip on Weibo if it wasn’t considered an important and influential service anymore. Lee doesn’t mention this, but it’s also hard for me to see the real-name system as much of a problem for Weibo users (as Qian suggests it is) because the real-name system has been so poorly implemented. I have been a weibo user for years and at no point during any of these real name campaigns have I actually had to provide Sina with my real name or ID information. Users who want to get around that “requirement” definitely can.

Lee’s second point is also quite salient, as Weibo and WeChat are very different services. The rise of WeChat has undoubtedly made Weibo less active, but from a user’s point of view, I wonder how much of that lost activity was meaningful for the broader userbase and how much of it was private chatting between friends that has since moved to chat apps like WeChat. My guess is that it’s mostly the latter that was lost, and while that make’s Weibo less active, it probably doesn’t make it any less interesting.

Of course, that’s not likely to be much consolation for Sina, and the question of Sina’s value and its monetization efforts is still very much an open one. If Lee thinks ads on Weibo are a viable monetization option, I’m inclined to believe him — after all, he spends an awful lot of time on Weibo and knows the service very well — but as he says, ultimately it’s all going to come down to the execution.