Personal Finance

5 Things Twitter Inc. Needs to Learn from Weibo

Weibo's mobile app, featuring "virtual gifts" for live broadcasters.

Chinese microblogging site Weibo (NASDAQ: WB) is often called the " Twitter (NYSE: TWTR ) of China," but that's really a misnomer. Instead, Weibo's platform can more accurately be described as a hybrid of Facebook (NASDAQ: FB) , Twitter, and Reddit.

Weibo has been crushing Twitter in terms of revenue, active user, and profit growth. Last quarter, Weibo's revenue surged 42% annually to $177 million, its monthly active users (MAUs) soared 34% to 297 million, and its non-GAAP net income grew 147% to $55 million.

Weibo's mobile app, featuring "virtual gifts" for live broadcasters.

Weibo's mobile app. Image source: Google Play.

Twitter fared much worse last quarter. Its revenue rose 1% annually to $717 million, its MAUs grew 4% to 319 million, and its non-GAAP net income only rose 3% to $119 million. That stark contrast explains why Weibo rallied nearly 360% over the past 12 months, while Twitter rose just 3%.

That disparity also indicates that Twitter might consider "borrowing" a few features from Weibo. Let's take a look at five things Weibo arguably does better than Twitter, and how they might help Twitter gain more users.

1. Dropping the archaic character limit

Twitter's 140-character limit was originally designed for SMS platforms, but that limit arguably cripples the ability of users to interact with each other. Users often post screenshots of paragraphs they wrote as images to circumvent that limit, or send out tweets with awkward numbers to indicate the proper reading order.

Weibo started out with a 140-character limit as well, but 140 Chinese characters actually equal 140 words (not letters) in English -- which allowed its users to post much longer messages. Weibo replaced that limit last January with a simple, Facebook-like solution -- it displayed the first 140 characters of each post, and users simply clicked "read more" on each message to display the full text.

2. User-to-user communications

Twitter is arguably a one-way soapbox for celebrities and companies, which is poorly optimized for user-to-user conversations. Replies to individual tweets are often buried under piles of other tweets, replies to other replies are poorly organized, and direct messages seem isolated from the rest of the platform.

Weibo solves those problems by using threaded comments like Facebook -- where replies to posts appear clearly below the original post. Replies to other replies are indented into new conversations -- which encourages user-to-user engagement much more than Twitter's chaotic mess of mentions.

3. User-based interests over trending topics

Twitter likes to corral users toward trending topics, presumably to improve its reputation as a "news" site, and to boost user interest and engagement. However, Twitter is poorly optimized for finding conversations about topics that users are actually interested in. The easiest way to do so is to follow users who cover those topics or manually search through tweets, but the results aren't ideal.

By comparison, Weibo makes it easy for users to find and follow topics that they're interested in. Users can browse verified celebrity accounts on a clearly organized portal page dubbed the "Hall of Celebrities" -- which weeds out fake accounts. For trending topics, Weibo collects the related tweets on "Micro Topic" pages for dedicated conversations, which encourages user-to-user interactions. All those Micro Topic pages are then indexed on a portal page which lets users browse trending topics by interests in a way which resembles Reddit more than Twitter.

4. A smarter approach to live video

Twitter's live video efforts are all over the map. On one hand, it's encouraging users to live stream content via Periscope. On the other, it's securing pricey deals with major content providers like the NFL to tether itself to traditional content providers. Those moves are supposed to make Twitter an ideal platform for video ads, but those deals clearly aren't boosting its MAUs or ad revenues yet.

Like Twitter's Periscope, Weibo's streaming platform lets users stream live broadcasts. However, Weibo monetizes this platform with a clever twist -- its top celebrities chat, tell jokes, play games, and do other things with their fans for virtual gifts -- which are bought with real money from Weibo.

The broadcaster gets a cut of each sale, and top broadcasters can reportedly earn up to $150,000 per year. This strategy boosts user-to-user engagement and generates extra revenues for Weibo, which is less risky than Twitter's pricey contracts with content providers.

5. Gamifying the social network

Lastly, Weibo gamifies its entire network with badges, similar to the ones users earn on Foursquare. Users gain these digital collectibles by accomplishing certain tasks. Hasbro and Nike , for example, partnered with Weibo to offered Autobot and Nike Swoosh badges to followers who retweeted their messages. If Twitter introduced a similar platform, it might boost engagement with company accounts and get the attention of advertisers again.

But will Twitter actually imitate Weibo?

Twitter could improve its core business if it added some of Weibo's features, but I doubt that these changes will happen anytime soon. Twitter has had ample time to mimic some of Weibo's better ideas, but it still seems stubbornly dedicated to its scattergun strategies. So for now, I think it's a better idea to simply buy Weibo, which is firing on all engines; instead of Twitter, which is running out of steam.

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Leo Sun owns shares of Weibo. The Motley Fool owns shares of and recommends Facebook, Hasbro, Nike, and Twitter. The Motley Fool recommends Weibo. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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