May 22 (Bloomberg) -- Weibo Corp.’s net loss more than doubled in the first quarter as the Chinese microblogging service controlled by Sina Corp. spent more to attract users.
The first-quarter net loss was $47.4 million, compared with a loss of $19.2 million a year earlier, the Beijing-based company said in a statement yesterday. The loss matched the preliminary estimate provided in its listing prospectus.
Weibo, also backed by Alibaba Group Holding Ltd., boosted daily active customers by 37 percent in the first three months of the year as China’s 618 million Internet users migrate toward content on their smartphones and tablet computers. Chief Executive Officer Wang Gaofei is investing in marketing and product development to fend off competition from Tencent Holdings Ltd.’s WeChat messaging application.
“Weibo is already the largest platform in China for users to create and distribute content publicly,” Wang said on a conference call today. “Our core strategy in the coming few years is to take advantage of the rapid growth of China’s mobile Internet user base and leverage the core attributes of our platform.”
Sales more than doubled to $67.5 million in the first quarter from $25.9 million a year earlier, the company said. That also matched the preliminary estimate in its prospectus.
For the second quarter, Weibo forecast net revenue of $74 million to $76 million, according to the filing. That’s almost double the $37.6 million from a year earlier, according to data compiled by Bloomberg.
Weibo shares gained 6.2 percent to close at $20.25 on the Nasdaq Stock Market yesterday, before the results were announced. They have gained 19 percent from the $17 a share IPO price.
Weibo, which raised $285.6 million in an IPO in April, operates a social media website similar to Twitter Inc.’s that allows users to post short messages. Twitter’s service is blocked by China’s government censors.
The daily active users of Weibo rose to 66.6 million at the end of March from 48.6 million a year earlier, the company said last month.
Competition with Tencent’s WeChat may pose a threat to user growth going forward.
“WeChat’s overwhelming popularity and heavy user traffic will significantly constrain the amount of time that mobile users spend on Weibo,” Yue Yao, an analyst with Morningstar Inc., wrote in a May 11 report. “This, in turn, will hamper Weibo’s business expansion over the long haul.”
Weibo will focus on increasing mobile revenue by improving its user interface, expanding gaming and increasing its ad business, Wang said on today’s call.
Sina remains the controlling shareholder of Weibo after the public offering, holding 54 percent of outstanding shares on a fully diluted basis, the company said in today’s filing. Alibaba holds 30 percent of outstanding shares on a fully diluted basis, the filing showed.
Sina today reported a net loss of $33.2 million for the quarter ended March.
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