A staff works at the reception booth of Sina headquarters in Beijing. (Photo : Getty Images)
Weibo Corp's net profit increased more than fivefold in the second quarter, attributed mainly to its strong advertising revenue as it expects a better financial performance in the third quarter, China Daily reported.
The company's net profit rose to $25.9 million in the second quarter, a growth of 516 percent year-on-year, Weibo said on Monday, Aug. 8.
Weibo's revenue also surpassed the analyst's average estimate of $146.7 million as its revenue hit $146.9 million.
CEO Wang Gaofei said that the rising trend in social networking-based marketing contributed mainly to the surge.
"Revenue from big corporate clients surged by 73 percent and that from small and medium-sized firms by 107 percent," Wang said.
The company is expecting its third quarter revenue to reach $168 million to $1773 million, while analysts predict an average of $146 million.
On Monday, Aug. 8, Weibo's U.S. shares increased 3.65 percent to $37.17 in after-hours trading.
Tencent Holdings Ltd's WeChat is Weibo's rival in a battle to dominate China's growing social networking market.
Weibo has about 282 million monthly active users as of June, an increase of 33 percent from last year's figure while WeChat has about 700 million active users.
While WeChat promotes communication between friends and colleagues, Weibo is an open platform where people or strangers can converse.
Wang said that the company is also gaining presence in its live-streaming sector, currently one of the most popular investments in the country.
"Our users of short videos and live streaming also surged," Wang noted.
The company partnered with yixia.com, one of the most popular video live-streaming platform in the country, with the aim to attract young people, which started with a $200 million investment in the startup company in November.
According to Pang Yiming, an analyst at Internet consultancy Analysys, the partnership with yixia.com has significantly increased the number of Weibo users.
"In the past, small online clothing retailers contributed a significant amount to Weibo's advertising revenue but it is now making a big effort to attract big brands," Pang said.
