Chapter 357: Weibo

In May, Weibo officially completed its share exchange preparations and fundraising.

This time, Weibo not only brought in multiple powerful partners to safeguard the company and pave the way for its IPO, but also raised approximately $500 million.

$500 million, equivalent to nearly 3.5 billion RMB, is an enormous sum for Weibo, a relatively light-asset platform.

Yan Li’s requirements for this money were simple.

Spend it to transform our current lead into an insurmountable absolute advantage.

At this stage, Weibo has established a strong lead, but Sina Weke and Tencent Taotao have not given up and are pursuing Weibo through various means.

This is why Weibo raised so much money.

It’s to go to war with these two, burn cash to maintain our advantage, while escalating competition and forcing both to exit this Weibo battle through overspending.

Even before the contract was signed, Yan Li and Weibo had already agreed on how to use the $500 million.

First, pour money into technology!

This is the top priority; Weibo has always emphasized this, striving to ensure user experience and functional infrastructure.

Yan Li is not from an internet company background; Weibo is still young and lacks deep technical foundations.

So Yan Li places great importance on this and is willing to spend heavily on related R&D and optimization; he often repeats in the company, “Science and technology are the primary productive force.”

Many Weibo employees joke that although General Yan doesn’t understand technology, he respects it more than many bosses who came from technical backgrounds.

Since Weibo’s founding, Yan Li has meddled in marketing, content, business, management, and many other areas—but never in technology.

He only does two things: spend money and demand results.

He fears neither ignorance nor expertise—he fears those who are half-informed or technologically outdated, giving misguided orders based on their own assumptions; that’s deadly.

The facts prove that without foolish bosses and superiors meddling, with the team’s technical level maintained and funding sufficient, a capable team can be forged and cultivated.

Weibo’s technical capabilities may not be the absolute top tier of the internet industry, but against established players like Sina and Tencent, it has never fallen behind.

In fact, in areas like algorithmic recommendation, mobile platforms, and system stability and security, Weibo has developed its own distinct technical advantages.

This time, about $150 million will be invested in technology to make Weibo’s foundational infrastructure stronger, steadier, and better.

Next, user retention, growth, and market promotion!

Currently, all platforms are competing fiercely for celebrities and KOL accounts; Weke and Taotao have both launched exclusive signing mechanisms.

After extensive discussion, Weibo concluded that exclusive signing is still not suitable for Weibo.

Because Weibo currently has too many celebrities and KOLs; if we burn cash competing for exclusives against Sina and Tencent, our cost burden would far exceed theirs.

But we cannot stand idle—both companies are constantly poaching Weibo’s talent by paying for exclusives.

Some will consider Weibo’s platform superiority and prospects and stay, but others are drawn by money.

Some even doubt Weibo’s chances of victory; Sina and Tencent’s reputations still carry weight; some who feel their treatment and popularity don’t match on Weibo prefer to be a head chicken rather than a tail phoenix.

Weibo cannot ignore this; it must take action to prevent talent drain.

Exclusive signing is unwise—then offer subsidies!

After research, Weibo developed a calculation formula to determine an account’s active contribution based on traffic and interaction data, then provide content incentive subsidies.

In plain terms, pay those accounts; Tencent and Weke buy out, Weibo focuses on steady, continuous flow.

The goal is primarily to stabilize the mid-tier accounts that are wavering.

Getting paid for switching platforms is a powerful temptation.

Now Weibo also pays; though not as much as buyouts, it’s still money—and more stable, long-term, low-risk, with better market potential and prospects.

Those who can be poached certainly have some influence or a solid following on Weibo; being paid to switch doesn’t guarantee they’ll maintain their previous popularity and traffic.

Switching risks and platform future risks must be considered; whether you’re a head chicken or a tail phoenix, survival comes first.

This subsidy incentive will greatly counter Weke and Taotao’s poaching—and even reverse-poach their non-exclusive accounts.

Of course, Weke and Taotao can copy this, but if they keep poaching while offering incentives, their costs will soar.

Retaining celebrities and KOLs is one thing; more importantly, attracting new users.

The more Weibo users there are, the greater the benefits and influence, the more stable the ecosystem—that’s the key to keeping those celebrities and KOLs.

So Weibo will use ample funds for user acquisition and advertising promotion.

Beyond previous phone bill schemes, this time there are cash rewards, gifts, points, and other incentives to encourage new user registration and existing users to refer others.

Massive online and offline advertising campaigns will be launched to boost public awareness.

In short, make Weibo reach every corner—not just confined to the internet, but truly a platform for the entire nation.

Additionally, considerable funds will be allocated to product ecosystem development, commercialization exploration, and strategic investments and acquisitions, strengthening Weibo in every way to win this Weibo war.

“Before, we had rifles and arrows; they had planes and cannons—we could only win through timing, terrain, and unity.”

“Now, we not only have timing, terrain, and unity—we have planes and cannons, even aircraft carriers. We won the war of poverty; now that we’re rich, we must crush everyone.”

Yan Li convened a mobilization meeting for all mid-level and above staff at Weibo, announcing that the Weibo war had entered a heated phase and that Weibo would inevitably achieve final victory.

Weibo employees were energized; some executives even boasted of ending the battle once and for all.

Yan Li and some senior leaders prepared for a prolonged war; if $500 million isn’t enough, raise another $500 million—or even $1.5 billion.

But as always: Weibo can burn cash; Sina cannot; Tencent, facing the massive shift of the mobile era, may not be willing to burn.

Almost immediately after Weibo announced its successful $500 million fundraising, Sina’s morale halved.

$500 million!

Sina’s current market cap is under $3 billion.

After the financial crisis, all internet companies’ valuations recovered somewhat, but Sina recovered the least.

The reason: its core business, Sina Blog, was crushed by Weibo; its new product, Weke, also performed poorly.

Capital is cruel and realistic: if your prospects are good, everyone praises you; if your prospects are bad, everyone tramples you.

Now, Sina is tormented by its plummeting market cap, struggling to raise funds, and fearing wolves will seize this chance to bite it.

After the Weibo Night at the end of last year, Sina’s senior management resolved to fight Weibo to the death; though Yan Li later outmaneuvered them several times, leaving them humiliated, their overall direction remained unchanged—they continued competing with Weibo.

Yet less than half a year later, Sina’s senior management had to reconvene to discuss again.

In the past few months, Sina has achieved no notable victories; overall, it’s still being crushed by Weibo.

Now Weibo has $500 million in ammunition—like a tiger with wings, its momentum is stronger than ever.

Can Sina, unable to match Weibo’s spending, cut its losses and abandon Blog and Weke?

The conference room was thick with smoke.

Sina’s CEO, Cao Zong, looked years older than a few months ago, visibly worn out.

The internet bubble burst, Blog faded, Weke failed to gain traction; previously, Yan Li had countered them, turning Weke into a den of rebels nearly shut down; their hoped-for mobile counterstrategy collapsed from the start…

All these crises and pressures left Cao Zong unable to sleep soundly.

In fact, two months ago, many inside Sina had already called for meetings to discuss abandoning Weke, but he had suppressed them with various tactics.

Now, with Weibo’s successful fundraising, he could no longer hold back—he had to call this meeting.

Unlike Cao Zong’s expectation of heated debate, the meeting atmosphere was far more oppressive.

The more silent it was, the worse it was—it meant some had become numb and lost hope in the company, perhaps even already seeking new jobs.

Seeing this, Cao Zong had to actively steer the discussion.

Aside from the half who remained silent, the other half split into two factions: one supported abandonment, the other opposed it.

The supporters of abandonment argued simply: we can’t win, cut losses now, then restructure other businesses—amputate to survive.

Those unwilling to abandon had their own reasons: Sina had invested too much already; abandoning now meant wasting all those investments—how to explain to stakeholders?

And who could guarantee the new business would succeed? It might fare even worse than Weke.

Blog still has some legacy; Weke isn’t without highlights; with more funding, even if we can’t surpass Weibo, securing third place and aiming for second is still a viable path to survival.

Cao Zong shook his head internally—he was reluctant to give up on Weke.

But he understood one thing clearly: competition in social platforms is winner-takes-all.

Coexistence is hard; at least in today’s market, there’s no room for both Weke and Weibo.

If he were Yan Li, he would show no mercy—he’d fully devour Weke while holding the advantage, eliminating any future threat.

Either exit, or fight to the death—only two choices.

Cao Zong remained silent until the two factions could not convince each other and turned their eyes to him; only then did he speak with difficulty.

“Send Weibo an offer: ask if they’re willing to acquire Weke and Blog—we accept cash plus equity.”

These words announced Sina’s complete abandonment of Weke and Blog.

But Cao Zong was no ordinary man; he didn’t plan to run the businesses on a shoestring like the abandonment faction suggested—he intended to package and sell them.

Selling them would not only bring in cash to fund new ventures but also constitute a major investment boon for Sina by acquiring equity in Weibo, mitigating the negative impact of abandoning Weke—perhaps turning a bad move into a good one.

But… would Weibo buy?

Sina’s executives raised doubts; Cao Zong remained confident: “I think Yan Li will buy.”

Weke and Blog still hold considerable technical, user, and content value—a good complement for Weibo.

Meanwhile, if Sina takes equity in Weibo, both sides can cooperate; Sina’s various internet and media resources can integrate with Weibo, adding further strength.

Of course, the most crucial point isn’t what Sina can offer Weibo—it’s that if Weibo doesn’t acquire Weke, Sina will likely sell it to Tencent.

Tencent has money and traffic but lacks media resources and related content and users.

If Tencent successfully acquires Weke and Blog, it will undergo a transformative leap.

Weibo might not care about the benefits Sina brings, but it cannot allow Tencent and Sina to join forces and create a formidable rival.

For Weibo, this defensive acquisition is, in some ways, more important than a strategic one.

“If that’s the case, why not cooperate directly with Tencent?”

One executive asked; having been crushed by Weibo for so long, many harbored resentment and preferred to see Weibo humiliated.

“It’s simple.”

Cao Zong stated his answer: “I have more faith in Yan Li; I believe Weibo will win, and partnering with the winner maximizes profit.”

…

Yan Li soon learned of Sina’s plan; Budebushuo , Cao Zong’s move had indeed put him in a difficult position.

Weike and Blog held little value for Weibo; acquiring them was acceptable, but not acquiring them was also acceptable.

But if Sina sold these two platforms to Penguin Taotao, Yan Li could not accept that.

In Yan Li’s mind, Penguin was a far stronger opponent than Sina.

Though Weibo and Weike fought fiercely, Penguin Taotao had low visibility—not because it was weak, but because Penguin hadn’t taken it seriously.

If Penguin Taotao plugged its weaknesses, threatened Weibo, and caused Penguin to change its mind and increase investment, a prolonged stalemate would truly become likely.

At least Penguin wasn’t as poor as Sina—it could still afford to burn hundreds of millions of dollars.