CCTV's Economic Half Hour Report: The Value of Weibo

Weibo has evolved from a cutting-edge fashion for a few individuals to a popular online trend actively participated in by many netizens. On February 25, 2011, CCTV's "Economic Half Hour" aired an episode titled "The Value of Weibo." Below is the program transcript:

Hello everyone, welcome to "Economic Half Hour." Today we will talk about Weibo, which is currently the most popular interactive platform on the internet. Especially in the just-concluded year of 2010, Weibo has transformed from a niche avant-garde fashion into a widely embraced online trend among numerous netizens. Many people are increasingly keen on using Weibo to share brief reflections and moods with their friends in just over a hundred characters. But beyond this communication function, some have recently discovered new capabilities within Weibo.

The young man on the screen is named Shan Chengwei. As a grassroots Weibo user, he also posts his feelings and shares photos on Weibo occasionally. Recently, he has found a new use for Weibo.

Shan Chengwei, Grassroots Blogger:

I like playing with Weibo and often search for information related to Weibo online. By chance, I came across something that seemed pretty good.

The "pretty good" thing mentioned by Shan refers to occasionally earning a little pocket money. He told us that within a very short period, he had already earned a small income.

Shan Chengwei, Grassroots Blogger:

I've made more than 200 yuan.

Although 200 yuan is not a large sum, it is hard for ordinary people to imagine how Weibo can be used to make money. Shan told us that he earns income by forwarding some small advertisements on his Weibo.

Shan Chengwei, Grassroots Blogger:

When I have nothing to do, I post an advertisement on Weibo to earn some pocket money. It also helps others promote their products, which I think is a good thing. Each post earns me four or five yuan, depending on various factors.

Some might wonder where these advertisements come from and how they are forwarded. Through our investigation, we learned that Shan finds advertisement information on a Weibo intermediary platform. Advertisers post advertisement information and set reward amounts on the platform. Bloggers select appealing information, post advertisements on their own Weibo accounts, and complete tasks. Zhang Zhenbo is the founder of this platform, and he told reporters that although still in the trial operation stage, business has been quite good.

Zhang Zhenbo, Head of Grassroots Website:

Currently, there are seventy to eighty advertisement postings, with a total amount of around fifty to sixty thousand yuan. Our registered members number over thirteen thousand.

What Zhang Zhenbo created is more focused on providing guarantees for Weibo bloggers. He told us that the compensation depends on the number of followers. If a blogger with less than a hundred followers posts an advertisement, they might only get a few cents. However, if a blogger with forty thousand followers posts an ad, they could receive dozens of yuan. For bloggers like Shan, who have fewer than two thousand followers, the compensation per advertisement might be just a few yuan. Additionally, the quality of completion is also evaluated, such as whether personal comments are added. Regarding how to receive payment, it is done through some payment platforms with real-name transfers.

Zhang Zhenbo, Head of Grassroots Website:

We temporarily require a minimum of fifty yuan before withdrawal is possible. The funds can be directly transferred to their bank account, Alipay, or Wealthpass. We pay them every Friday. Today, we can make payments again.

This intermediary platform does not earn money from bloggers who come to take on tasks; instead, they take a cut from the advertisers' bounty.

Zhang Zhenbo, Head of Grassroots Website:

If a company offers a bounty of one thousand yuan, we now charge a service fee of 10% to 20%, which is one hundred to two hundred yuan.

Zhang Zhenbo also told reporters that businesses coming to this platform to post advertisements are usually small and medium-sized enterprises (SMEs). They see the popularity of the Weibo platform while also being financially constrained from advertising with larger companies.

Wang Dongfang, Customer:

Now, because I am targeting the same group of people who are active on Weibo.

In terms of cost control, spending a small amount achieves significant results.

Spending a little money to accomplish big things has become the impression people have of the Weibo platform. With demand comes opportunity. Besides these grassroots-created advertising intermediary platforms, many companies also use celebrity resources on Weibo for commercial marketing. Yang Weiqing, President of iResearch Consulting Group, once cooperated with a company to conduct a lottery giving away mobile phones.

Yang Weiqing, President of iResearch Consulting Group:

They contacted me via private message and then spread their commercial activity through my Weibo.

This mobile phone manufacturer was promoting a new model. Through my Weibo, it was equivalent to spreading their event and survey. Participants who actively engaged and answered questions were entered into a lottery, with two winners receiving mobile phones. This activity was relatively successful, with tens of thousands of participants.

Reporter: What benefits did they give you?

Yang Weiqing: They gave me a mobile phone.

The cost of three mobile phones allowed tens of thousands of people to pay attention to the newly released product, achieving the goal of accomplishing big things with minimal expense. Moreover, if the advertisement content launched by the enterprise is interesting, many Weibo users will voluntarily forward it.

In the second half of 2010, suddenly many people began using simple phrases like "I love ..., but I don't love ...", "I love ..., and I also love ...", "I am ..., but I'm not ...", "I am Vancl". From entertainment stars to sports stars, from animated characters to internet celebrities, even cats, dogs, flowers, and grass, countless real and virtual entities became protagonists of this kind of advertisement format, known as "Vancl Style".

Animated Advertisement (from Han Han and Wang Luodan to various playful Vancl styles)

Wu Sheng, Vice President of Vancl:

Our initial sales volume was six million to seven million yuan. Without any changes in external advertising investment, thanks to the spread of the Vancl style over nearly two weeks, we found our sales reached close to ten million yuan.

In 2009, the company's sales volume was around seven hundred million yuan. In 2010, the sales volume surged to two billion yuan. No one can quantify the specific role of the Vancl style in the growth of Vancl's sales, but no one would deny that its impact must have been significant. It must be acknowledged that the simple combination of this simple sentence structure forming such a rapid spread effect was largely due to the Weibo platform.

Wu Sheng, Vice President of Vancl:

If it doesn't combine with Weibo, the possibility of creating an explosion is relatively small.

Wu Sheng told us that Vancl spent a certain amount of advertising fees on subway, bus, and other street advertisements. However, on the Weibo platform, where the Vancl style spread geometrically, the company did not spend a single cent.

Wu Sheng, Vice President of Vancl:

For subways, bus stops, and outdoor ads, the initial investment was less than ten million yuan.

Reporter: On Weibo?

Wu Sheng: No investment.

Like Vancl, more and more companies are starting to promote themselves on the Weibo platform. Cao Zenghui, Deputy General Manager of Sina Weibo, told us that currently, more than five thousand companies certified by Sina are active on Weibo, and these official Weibos are platforms for each company's commercial promotion.

Cao Zenghui, Deputy General Manager of Sina Weibo:

An increasing number of companies are using Weibo, especially those related to consumer products. The specific number should not be less than five thousand.

The reason why Weibo attracts so much business opportunity lies essentially in its ability to gather a large amount of attention. On Weibo, the distance between celebrities and ordinary users becomes closer, and even some ordinary users can become celebrities with tens of thousands of followers.

You may find it difficult to associate the boy on the screen with a rabbit. But if I mention Cold Rabbit, a character known for telling cold jokes, I believe many people are familiar with it. Yes, this is the Cold Rabbit who loves telling cold jokes, whose name is Yi Shuihan.

Yi Shuihan, Weibo Grassroots User:

For example, in a room with one chair and three lights, how do you create a tense atmosphere? The answer is "Dun Dun Dun Dun."

With the help of these slightly cold jokes, he quickly accumulated popularity on Weibo.

Yi Shuihan, Weibo Grassroots User:

We have over seven million listeners on Tencent.

Yi Shuihan told us that his day starts and ends with Weibo. Due to the excessive time spent on Weibo, he even summarized the golden hours when general Weibo users tend to focus on Weibo.

Yi Shuihan, Weibo Grassroots User:

Based on my own statistics or observations, the peak times are from 10:30 AM to 11:30 AM, from 3:30 PM to 5:30 PM, and from 8:30 PM to 10:30 PM.

Yi Shuihan also told us that advertisers have targeted these bloggers with a large number of followers. The price of posting advertisements on Weibo is closely related to the number of followers.

Yi Shuihan, Weibo Grassroots User:

If there are over a million followers, the price is set at five hundred yuan per Weibo post.

He told reporters that he receives many such advertisement negotiation messages every day.

Yi Shuihan, Weibo Grassroots User:

There are about fifteen such messages every day.

According to Yi Shuihan's seven million followers, if he posts one advertisement, he can earn 3,500 yuan. If he posts fifteen advertisements daily, his daily income would exceed 50,000 yuan. However, when asked if he would post such advertisements, he gave a negative response.

Yi Shuihan, Weibo Grassroots User:

We don't simply post advertisements or pictures for you; we won't do that.

Whether enterprises or grassroots entrepreneurs, they all look forward to the business opportunities brought by the massive crowd on Weibo. During random interviews on the street, seven out of sixteen respondents used Weibo.

Street Interview:

Reporter: Hello, do you have a Weibo account?

A: Yes.

Reporter: Do you have a Weibo account?

B: Yes.

Reporter: Do you have a Weibo account?

D: Yes.

Reporter: Do you have a Weibo account?

H: Yes.

Weibo, literally meaning micro-blog, limits the length of information to 140 characters, narrowing the gap between Shakespeare and ordinary people in literary creation. In daily life, people use Weibo to write a few words, make some live records, express reflections, and share moods, showcasing fragmented selves to anyone online. In the world of Weibo, you can have various reasons to like it.

Not only for personalized entertainment and interaction, Weibo has even become a treasure trove for CEOs like Li Kaifu to find talent.

Li Kaifu, Chairman and CEO of Innovation Works:

I think sometimes forwarded excellent entrepreneurs or entrepreneurial ideas, after seeing them, we will let our recruiters contact them to see if they are interested, and then we can start a business together.

From the internal testing of Sina Weibo in August 2009 to today, in just a year and a half, the number of Weibo users far exceeds expectations. According to data provided by the internet consulting company iResearch Consulting Group, as of January 2011, more than 100 million people use Weibo weekly.

Yang Weiqing, President of iResearch Consulting Group:

In June (2010), China's daily average Weibo users were over nine million, and the monthly coverage data was more than 100 million. In total, people in China browse Weibo for about thirty million hours. By December 2010, there were 160 million Weibo users online in China, with over twenty million daily users.

The ups and downs of the internet economy for over a decade have proven one unshakable truth: where there is attention, there is opportunity. Moreover, Weibo, this emerging force sweeping the globe, has become a gold mine in the eyes of many. For instance, as introduced in the program, some netizens and companies earn money by posting advertisements. Do they need to share profits with websites like Sina, Tencent, and Sohu? In the eyes of these Weibo platform creators, what is the value of Weibo, and how can they extract real wealth?

We saw earlier that when Weibo fever swept the internet, many advertisers targeted this new darling. Some companies leveraged the exponential diffusion of Weibo to carve out their brand. Can Weibo establish its own profit model? How great is its commercial potential? Let’s take a look at the reporter's investigation.

Additionally, about 30% of people use mobile phones to access the internet, adding up to nearly thirty million or more people using Weibo daily. The total monthly browsing time on Weibo has approached ninety million hours, corresponding to an average increase rate of three times in half a year.

Where there is attention, there is opportunity. Commercial activities on Weibo platforms have become frequent. However, according to our investigation, none of the current Chinese Weibo platforms have achieved product profitability. Should companies pay the Weibo platform for advertising?

Zhang Chaoyang, CEO of Sohu:

Some companies use Weibo for commercial purposes and spread information among their followers, which can be charged.

Li Kaifu also believes that running Weibo is a commercial behavior for internet companies, and charging is reasonable.

Li Kaifu, Chairman and CEO of Innovation Works:

I think the platform taking a share is reasonable because they need to make money.

When discussing whether platforms like the one founded by Zhang Zhenbo should pay the Weibo platform in the future, internet company executives believe it depends on whether the model can scale.

Zhang Chaoyang, CEO of Sohu:

Commercially speaking, it depends on whether the model can scale. Collecting small fees, similar attempts were made during the blog era, where some bloggers wanted to earn small amounts, but the model didn’t work, so it’s not worth discussing if it doesn’t scale.

Charles Chao, CEO of Sina:

If they pay Sina, I think it’s reasonable. We provide the platform, and the key is whether each party's value can be reflected in the process, allowing contributors to receive appropriate benefit distribution. That's the most important.

Charles Chao believes Weibo will be an open platform where everyone plays their part. Companies like Sina will mainly focus on building the platform, providing services, and establishing rules. Xing Hongyu also stated that Tencent has noticed this situation of advertisement information release. If it disturbs users, relevant supervision might be necessary.

Xing Hongyu, General Manager of Tencent Network Media Product Technology Department:

For example, we can consider Weibo as a product or service. Just like making phone calls, different people use phones for different purposes. Some use phones to stay in touch with friends, some for telemarketing, and some to promote their products. If used appropriately, the telephone company won't care about the true purpose of these calls, but some behaviors should indeed be prohibited or controlled.

Long-term monitoring and research of the internet by Yang Weiqing suggest that after internet companies stabilize their operations, they will launch their own advertising platforms, enabling more targeted ad placements.

Yang Weiqing, President of iResearch Consulting Group:

Once Sina and Tencent's Weibo numbers stabilize and grow significantly, they will likely launch their own third-party advertising platforms where you can select suitable content and potentially share revenue.

Although domestic internet companies have yet to profit from Weibo, from an international perspective, the commercial prospects of Weibo remain promising. An American internet company generated $2.4 billion in revenue in 2010 through this social platform website.

Yang Weiqing, President of iResearch Consulting Group:

It is a very typical new community product, increasingly favored by users in the U.S., and highly valued by capital markets.

Its annual revenue of over two billion US dollars mainly comes from precisely targeted advertisements.

Zhang Chaoyang, CEO of Sohu, frankly stated that Weibo harbors immense business opportunities and is a huge piece of fat meat.

Zhang Chaoyang, CEO of Sohu:

First, after years of development in the internet industry, wherever there is a crowd, there is bound to be commercial value, repeatedly proven. Whether from portals, search engines, or videos, this point has been proven. Weibo is a highly sticky crowd, and its business model is a natural progression. For such a massive user base, it is almost a huge piece of fat meat, very easy to monetize.

The reason why China's Weibo has not yet entered a commercial model is largely due to the lack of clear winners. Multiple players offer free services and compete fiercely in the Weibo market. Weibo, still a young platform in China, has seen over a dozen large and small players emerge. Besides Sina, which was the first to launch Weibo, companies like Tencent, Sohu, NetEase, Baidu, Phoenix News, and People's Daily all have their own Weibo products. According to data from iResearch Consulting, Sina, Tencent, and Sohu are currently the top three companies in China's Weibo platform.

Not only participating in competition, these three companies all regard Weibo as a strategic product, crucial to the company's fate and future development.

Charles Chao, CEO of Sina:

Sina hopes that Weibo will become our main strategy and direction, driving the company's future development. We are putting the full strength of the entire company into Weibo.

Xing Hongyu, General Manager of Tencent Network Media Product Technology Department:

For Tencent, Weibo is a very important strategic product.

Zhang Chaoyang, CEO of Sohu:

Weibo is a strategic product for Sohu.

In the current non-profit-making state of Weibo, what is the core competitive point for these three companies in the Weibo market? Through interviews, reporters found that the responsible persons of these companies repeatedly mentioned one word: users.

Charles Chao, CEO of Sina:

Internet competition is often about competing for user entry points, user volume, and user usage time.

Xing Hongyu, General Manager of Tencent Network Media Product Technology Department:

We have a solid foundation of Tencent users, specifically the vast QQ user base.

Zhang Chaoyang, CEO of Sohu:

Expanding the user base is the overriding task.

Yang Weiqing combined the long-term development model of the internet to highlight the importance of users to enterprises.

Yang Weiqing, President of iResearch Consulting Group:

That is, in the early stages of any high-stickiness community product, developing users is the top priority. After developing users, if your position is secure, you can sit back and collect money from these users.

During the interview, we genuinely felt that all companies spared no effort to attract users. To attract a wider range of users, they all played their trump cards, hoping to influence more people to join their Weibo ranks.

Sina holds the advantage of time accumulation, with numerous celebrities having established their Weibos on Sina.

Yang Weiqing, President of iResearch Consulting Group:

Sina clearly has a leading advantage in celebrities.

Charles Chao, CEO of Sina:

Inviting various types of people to start blogging, including celebrities and experts. Through various channels of publicity, we hope more ordinary users will join. Celebrities are very effective.

Tencent leverages the user base accumulated through QQ to enter the Weibo market, utilizing its excellent innate conditions to carve out its own territory.

Xing Hongyu, General Manager of Tencent Network Media Product Technology Department:

Already possessing a good user relationship network, this makes it more convenient for users to use and access Weibo. This is Tencent's advantage.

Yi Shuihan, Weibo Grassroots User:

These three companies each have their own characteristics. For instance, Tencent Weibo users lean more towards grassroots.

Sohu maintains its longstanding harmonious relationship with the entertainment industry, launching distinctive entertainment stars and events, attracting many users.

Yang Weiqing, President of iResearch Consulting Group:

Sohu has deep roots in the entertainment industry, especially in exclusive celebrity certifications related to the entertainment industry.

Zhang Chaoyang, CEO of Sohu:

Sohu Weibo is a more entertaining and lifestyle-oriented group. For example, our recent matchmaking event on Sohu Weibo was very successful.

Today, the number of Weibo users grows exponentially. In the U.S., the valuation of such social platform products could reach hundreds of billions of dollars. Despite this, during the interview, we heard more idealistic expectations than business models. Weibo will integrate into people's lives, becoming a future trend, changing the internet, and altering people's lifestyles.

Xing Hongyu, General Manager of Tencent Network Media Product Technology Department:

Creating a truly meaningful and valuable product for users should be priceless. It shouldn't merely be a future commercial opportunity but should become a service users cannot live without, like water, electricity, and telephones in our daily lives.

Charles Chao, CEO of Sina:

Through socialized information and localized services, especially with more mobile terminals, it represents the most important trend in the future development of the internet. I believe Weibo can fully reflect this trend.

Although major websites have not yet made money from Weibo, I noticed that the three major portal sites—Sina, NetEase, and Sohu—all used the same word when talking about Weibo's status: strategy