Weibo Corp (WB) 2015 Q4 法說會逐字稿

Good day and welcome to the Weibo Corporation fourth-quarter 2015 results conference call. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Ms. Vanessa Chen, IR officer. Please go ahead.

Thank you, operator. Welcome to Weibo's [full year] earnings conference call. Joining me today are our Chairman of the Board, Charles Chao; our Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Herman Yu. The conference call is also being broadcast on the Internet and is available through Weibo's IR website.

Before the management's presentation, I'd like to read you the Safe Harbor statement in connection with today's conference call. During the course of this conference call, we may make forward-looking statements, statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties.

A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Weibo assumes no obligation to update forward-looking statements in this conference call and elsewhere. Further information regarding this and other risks is included in Weibo's annual report on Form 20-F for the fiscal year ended December 31, 2014, filed with the SEC on April 28, 2015, and other filings with the SEC.

Additionally, I'd like to remind you that our discussion today includes certain non-GAAP measures, which excludes stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain a better understanding of Weibo's comparative operating performance and future prospects.

Our non-GAAP financials excludes certain expenses, gains or losses and other items that are not expected to result in future cash payments or that are non-recurring in nature or will not be indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures.

Following management's prepared remarks, we will open the line for a brief Q&A session.

With this I would like to turn the call over to our Chief Executive Officer, Gaofei Wang.

(Interpreted). Thank you and good morning. Welcome to Weibo's fourth-quarter 2015 earnings conference call. On today's earnings call, I will discuss our key developments in product, user and monetization areas, review the progress that we have made in 2015 and share with you our plan for 2016.

First, let me discuss Weibo's revenue results. In the fourth quarter of 2015, Weibo maintained strong revenue and user growth.

Weibo's total revenues grew 42% year over year to $149m.

Advertising and marketing revenue grew 47% to $130m, with 65% of ad revenue coming from mobile.

Non-GAAP net income in the fourth quarter reached $32.9m, up 49% from the last quarter.

For the full year, Weibo's 2015 total revenue reached $478m, up 43% year over year.

Advertising and marketing revenue totaled $402m, up 52% year over year.

Weibo was profitable throughout 2015, reaching a non-GAAP net income of $68.8m.

The rapid growth of Weibo's ad revenue can be attributed to our wide range of advertising and marketing products, which can meet the needs of different customer segments from individuals to small and medium sized enterprise to large brand customers.

In addition, the growth of Weibo ad revenue can also be attributed to the continuing growth of Weibo's large user base, positioning us to become an indispensable option for mobile advertising and marketing in China.

Moving to users, Weibo's monthly active users reached 236m in December, up 34% year over year, while average daily active users reached 106m, up 32% year over year. In December, 83% of Weibo MAUs were on mobile and mobile DAUs reached 94m, up 46% year over year.

In 2015 Weibo added 60m MAUs and 26m DAUs net. Weibo's large and growing user base has enabled us to become a top social platform in China, allowing hundreds of millions of users to discover interesting information and interact on the platform as well as tens of millions of users to share their lives and personal perspectives with the world.

Looking ahead into 2016, we will also focus on expanding our users' experience in feed consumption, allowing our users to more easily discover and benefit from the massive content on Weibo, and improving the user experience in speed posting, at the same time to make it simpler and quicker for our users to express their point of view and lifestyle.

Let me give you an update on Weibo's operations for the fourth quarter. First, let me share with you our guiding principle for growing Weibo which is predicated on the consideration for Weibo's user, content and customer. If these three assets are properly balanced and aligned, we believe Weibo's scale and value can continuously grow. My discussion on Weibo today will cover recent developments in these three areas.

First on users, in 2015 we focused on optimizing the user experience for Weibo's information feed which is the core product on our platform. By positioning Weibo's information feed initially as the source for real-time information, we were able to offer a differentiated proposition and gain traction with users instantly.

However, as Weibo developed, we've noticed that hundreds of millions of feeds are created daily and our users are able to consume only a small portion of the feeds in their information feed due to constraints in social relationships, reposting speed and time limitations.

Thus, over the past year, through product enhancements and algorithm adjustments, Weibo users are able to see in their information feed not only recent feeds from bloggers that they follow but also promoted feeds that we think would be of interest to the users. This optimization has increased the engagement rate in the information feeds by 24% in 2015.

In the fourth quarter of 2015, we soft launched the information feed with a new algorithm in limited geographies. Based on initial test results, the new algorithm is showing meaningful improvements to content consumption. For example, average information feed view increased by 30%. We plan to roll out Weibo's information feed with the new algorithm to all users in 2016.

In the second half of last year, we introduced information feed based on user interest which allowed Weibo to extend beyond our previous targeted user market. For instance, Weibo's new Hot Weibo information feeds which are popular feeds organized by category will allow us to target users of new apps and other non-social rich content services over whom we have a comparative advantage.

So far approximately 9% of our daily users are using information feed with promoted content based on user interest. By leveraging Weibo's user interest graph to suggest personalized content to our users, we believe this initiative will help Weibo attract new users and grow our existing user base.

Second, on the content front, on our last earnings call we discussed the progress of Weibo's product development to support self-media and multimedia content. In 2015, we greatly enhanced Weibo's content ecosystem through a close cooperation with self-media of various vertical segments such as entertainment, current affairs, etc. Our content verticalization efforts focused on 32 verticals whose total views in the fourth quarter in aggregate increased 84% year over year.

Through Weibo's gratuity program and other Weibo content monetization mechanisms, self-media on Weibo received over RMB250m in revenue share in 2015.

Our efforts on content verticalization on the one hand has extended the richness of Weibo's content offering and attracted new users, and on the other hand will enable us to tap into the monetization opportunities associated with these vertical areas.

Moving into 2016, we plan to further expand our efforts to enrich Weibo's vertical content as well as equip self-media, especially in short video and long-form content areas, with tools to more easily create content.

During 2015 short video consumption on Weibo saw robust growth, propelling Weibo into a leading position in China. In the fourth quarter daily video views on Weibo reached 290m, up 53% of the last quarter.

Also in the fourth quarter, we experimented auto play for Weibo's videos to certain Wi-Fi users and saw video views for this sample user pool increase by 4.5 times. We plan to roll auto play for Weibo videos based on the results from our beta testing.

During the Lunar New Year in February this year, six brand advertisers used video to deliver their promoted ads, among which Meizu, a low-cost smartphone maker, advertised on Weibo concurrently with their ads on CCTV during the Chinese New Year gala show. Meizu's video ads on Weibo were viewed 28.9m times over a 24-hour span.

In the fourth quarter we also launched Weibo Top Articles to improve the long-form content sharing experience for media industry professionals. Preliminary results were quite positive. Top Articles users in the fourth quarter reached 130,000. User engagement with long-form content increased by 33%.

We will continue to improve Top Articles and build on liked products to enable media industry professionals to publish their work on Weibo and build up their fan base. At a strategic level such moves will allow us to become quite competitive to domestic online services that offer traditional media content as well as add a critical component to Weibo's overall content offering.

Turning to monetization, the fourth quarter is the peak season for e-commerce advertisers on Weibo. In addition to working with Tmall during the Double 11 e-commerce day in China, we also offered other e-commerce customers Weibo performance-based ads which saw good results.

For example, on Black Friday Ymatou, a cross-border e-commerce mobile app, purchased Weibo's Big Day campaign package. From the one-day ad campaign Ymatou generated over 550m ad impressions, directing nearly 100m views to either their event page and app download page as well as increased both GMV and newly registered users by over 10 times.

With Weibo's large user base continuing growth, not only are we seeing growth in Weibo's performance-based advertising, we are also seeing businesses and brands who have historically spent ad dollars with traditional media shift their marketing budget to Weibo, such as advertisers from the fast moving consumer goods and movie industries.

For example, before the premiere of the Star Wars [sequel], the movie, Disney purchased Weibo app loading display ads which reached over 100m mobile users over the four days that the ads ran and helped to generate RMB350m in box office receipts in the movie's first week premiere.

A few words on promoted ads. In 2015, through the optimization of the information feed, we significantly increased promoted ads inventory. Through user growth and revised algorithms we also saw a meaningful ECPM increase. For the fourth quarter Weibo's ad customers grew 34% from the prior quarter to 664,000.

During the fourth quarter, we also launched a new [ad] that enables our SME customers to purchase Weibo brand ads just as our key accounts. We are seeing Weibo SME customers purchasing brand ads. For example, in the fourth quarter 34% of our SME customers bought brand ads which historically were sold to key accounts. At the same time, we are beginning to see key accounts purchasing promoted feeds.

By opening up Weibo's advertising and marketing offering to all our customer segments, we have an opportunity to provide each of our customer segments more comprehensive ad offerings and enable them to more effectively carry out their marketing campaigns on Weibo.

In 2016 we plan to focus on the following areas to strengthen our monetization offerings.

One, continue to grow Weibo's user base which will further increase Weibo's reach.

Two, further optimize Weibo's information feed, including algorithm improvements as well as launch new information feeds with suggested feeds based on our users' interest, which will increase Weibo's ad inventory.

Three, grow the number of customers and the proportion of revenue contribution from native ads as well as improve Weibo's social interest graph recommendation engine which will enhance the accuracy and engagement of Weibo ads.

And last but not least, fourth, develop new advertising products, especially those that will give our users a different experience, such as video ads which will be more important for us to expand our customer base.

With Weibo DAUs surpassing 100m, we joined a very limited list of media platforms in China who have such broad daily nationwide coverage. Weibo's wide reach and ability to enable ad customers to directly engage with potential customers gradually increased our appeal to brand customers of other media platforms. Our offering of app loading display ads and soon video ads increases Weibo's attractiveness as a brand advertising platform.

In 2015, as we began to offer marketing packages that included branding, user participation and performance-based ads, Weibo soon became an attractive brand platform for companies looking to launch new products.

The consumer market in China is going through a stage where every year many new products and brands are being introduced to the marketplace by companies from the FMCG, entertainment, computer and electronics and other industries. Weibo has demonstrated our distinctiveness in helping businesses launch new products and brands in the marketplace and quickly capture market attention.

Turning to SME, with SMEs developing a better understanding for social marketing and as we minimize the clutter in the information feed, we are seeing Weibo's SME business outpacing the growth of our other customer segments.

For example, in 2015 we saw e-commerce merchants, particularly clothing-based, growing fans through purchasing Weibo native ads and leveraging our tools for marketers to improve customer conversions. This has been a driver of the success of Weibo's fans marketing, allowing us to be less reliant on the old social advertising model where SMEs would use promoted ads as a means to direct traffic elsewhere through a link.

We are seeing the new breed of SMEs leveraging the fans economy, getting better marketing results and having longer staying power. As mobile Internet users are spending more time on social platforms, social advertising is becoming a must have for SMEs which gives us even more confidence going through 2016.

With that, let me turn the call over to Herman for the financial updates.

Thank you, Gaofei. Good morning everyone and good evening to those of you in the west. Welcome to Weibo's fourth-quarter 2015 earnings call.

As Weibo celebrates its sixth birthday in 2015, we are excited that Weibo has grown to become a leading social media in China with 236m monthly active users as of December.

Gaofei discussed our efforts to expand vertical content on Weibo which will make Weibo more relevant and targeted. As e-commerce further develops in China and shifts toward mobile Internet, we are seeing more and more e-commerce purchases being influenced by the recommendations from key opinion leaders and other Internet influencers, many of whom rely on Weibo to grow and maintain their fan base.

As fans economy, or fanconomy takes off in China, Weibo is benefitting, not only from the large amount of content created by the KOLs and other influencers, but also the associated monetization, for example, from native ads. This illustrates our strategy to grow the interest of Weibo users, content creators, and customers, concurrently.

2015 was an inflection point for videos, especially on mobile in China. And we are seeing short video consumption on Weibo taking off, at an amazing pace. In December, average daily video views grew 1,000% from the same period last year. We are excited about Weibo's unique ability to empower user-generated content, to get noticed and become widely popular.

Our solid execution in traffic and content strategy in 2015 was reflected in Weibo's financial performance. 2015 marks the third full year of Weibo's monetization. Not only has Weibo achieved profitability this year, our adjusted EBITDA margin grew from 7% in the first quarter, to 25% in the fourth quarter. This illustrates Weibo's operating leverage as a social platform, powered by user-generated content.

As our revenue further ramps, we believe Weibo will have significant room to improve our profitability, especially over the medium and long term.

Let me give you the top-level numbers for the fourth quarter and full year of 2015.

For the fourth quarter, Weibo's total revenue was $140m (sic - see press release '$149m'), up 42% year over year, or 47%, on a constant currency basis, reaching the high end of our guidance.

Non-GAAP net income reached $32.9m, up 258% year over year, or 267% on a constant currency basis.

Non-GAAP diluted EPS was $0.15, compared to $0.04 a year ago.

For the full year 2015, Weibo's revenue reached $477.9m, up 43% year over year, or 46% on a constant currency basis.

Non-GAAP net income was $68.8m, compared to a net loss of $2.3m last year.

Non-GAAP diluted EPS was $0.32, compared to a loss of $0.01 last year.

Let me give you more color on fourth quarter revenue.

Advertising and marketing revenue for the fourth quarter was $129.5m, up 47% year over year or 53% on a constant currency basis.

Revenue from Alibaba was $48.2m, up 27% year over year, or 32% on a constant currency basis.

Non-Alibaba ad revenues was $81.3m, up 63% or 69% on a constant currency basis.

Let me talk more about SMEs.

Revenue from small and medium-sized enterprises was $54.8m, up 133% year over year, or 145% on a constant currency basis, representing 42% of our total ad revenues.

Revenue through the SME channel was up 91%, while revenue from the self-service ads, which we began promoting in the fourth quarter of 2014, grew 480%, on a constant currency basis.

Weibo self-service ads enable fans' marketing, which helps our users to grow their fan base. Fans' marketing supports fanconomy, which is self-feeding. Users purchase ads to grow their fan base. Once their fan base becomes bigger, their content is viewed more, and any product and service they promote will have higher return on investment.

Fan base is a sticky social asset that motivates users to keep coming back to Weibo, to create and share more content and engage with their audience, which reinforces the growth of their fan base.

In the fourth quarter, Weibo's total number of ad customers reached 640,000, representing a 34% growth sequentially. The majority of Weibo's customer ads came from self-service customers, which reflects the adoption momentum of Weibo's fans marketing.

As Gaofei mentioned, we recently launched a new ad system, which opens up Weibo's fans marketing products to SME through the channel and KA customers and Weibo's brand ads to SMEs, which we hope to increase Weibo's ARPA.

Fans' marketing allows businesses to acquire both PC and mobile traffic, by simply opening a Weibo enterprise user account. Businesses and brands can focus on marketing their products and services, while leveraging the business tools on our platform, to increase marketing effectiveness.

We believe fans' marketing is a cost-effective way for businesses and brands to derive PC and mobile traffic, compared to maintaining a website, an HTML5 site, and an app.

Moving on to KAs. Revenue from key accounts, mostly large brand advertisers, in the fourth quarter, was $26.6m, up 4% on a constant currency basis.

Auto is one of our KAs business top industry sectors. And in the fourth quarter, ad revenue from auto customers almost halved from the prior year.

Despite weak revenue from the auto sector, our KA ad revenue in 2015 grew 11% year over year, on a constant currency basis. We believe our auto ad revenue bottomed in 2015 and expect this sector to rebound in 2016.

Looking ahead, we also see other bright spots in our KA business. For example, as Gaofei mentioned, we're seeing new advertisers, who historically spend their ad dollars on traditional media, for example, ad customers from the fast-moving consumer goods industry, to whom we hope to offer video ads and other brand products, later in 2016.

Mobile ad revenue in the fourth quarter was up 77% year over year, and 84% on a constant currency basis, representing 60% of total ad revenues.

With 83% Weibo's MAUs on mobile, Weibo is poised to take advantage of the trend of ad budgets shifting to mobile Internet.

Moving on to value-added services. Weibo VAS generated $19.5m, up 13% year over year, or 18% on a constant currency basis. Games services and membership revenue was up 22% year over year, or 27% on a constant currency basis, while data revenue was down 31% year over year.

Turning now to costs and expenses.

Total non-GAAP costs and expenses were $116.3m, up 22%.

Cost of sales was $41.8m, up 63% year over year, while operating expenses totaled $74.1m, up 6% year over year.

The increase in non-GAAP costs and expenses was primarily due to an increase in infrastructure cost, resulting from strong video consumption and traffic growth overall, an increase in game and other revenue share, value-added taxes associated with higher revenues, and higher personnel-related costs.

Non-GAAP operating income for the fourth quarter was $32.8m, up 243% year over year, or 253% on a constant currency basis.

Non-GAAP net income was $32.9m, up 258% year over year, or 267% on a constant currency basis.

Adjusted EBITDA, defined as non-GAAP earnings before interest, taxes, depreciation, and amortization, was $37m, up 131% year over year.

Turning to balance sheet and cash flow items. As of December 31, 2015, Weibo's cash, cash equivalents, and short-term investments totaled $335.9m.

Cash provided by operating activities for the fourth quarter was $51.7m. Capital expenditure totaled $2.7m, and depreciation and amortization expenses were $4.4m.

On Weibo shares floated in the market, according to our ADR depository form, approximately 16% of Weibo shares outstanding are available for trading in the open market.

Turning to Weibo's first quarter 2016 guidance. We estimate that Weibo's total revenue for the first quarter of 2016 to be $111m to $116m, which does not take into consideration foreign exchange rate fluctuations.

The above guidance assumes that revenue from Ali in the first quarter will drop more than $20m on a year-over-year basis. We estimate it to be approximately one-tenth of our total revenue and that our non-Ali ads will grow above 80% year over year, which is approximately the run rate that Weibo has been growing in the second half of 2015.

In general, we expect revenue from Alibaba to decrease significantly in 2016. At the same time, we are seeing non-Ali ads growing quite strong, which when taken as a whole, will allow Weibo to have healthy growth in 2016.

Before I turn the call over to the operator, let me quickly recap our call.

We ended 2015 on a strong note. Weibo's MAUs reached 236m and DAUs reached 106m, giving us significant reach to both users and consumers in China.

In 2015, we focused on improving Weibo's user experience through decreasing content clutter, adjusting the algorithm of Weibo's information feed, and expanding our vertical content offering, to improve relevancy and targeting.

On the monetization side, we strengthened Weibo's Plus-TV program, launched Big Day campaign package, and grew our KA advertiser base, including ad customers on the fast-moving consumer goods sector.

The strength of Weibo's advertising in 2015 was led by our SME marketing, which grew 153% year over year, or 155% on a constant currency basis. We saw strength from SMEs through the channel, as well as from self-service native ads, which powered fans' marketing.

Non-Ali ads in 2015 accelerated to 82% year over year, in the second half, from 50% year over year in the first half, on a constant currency basis.

As we enter 2016, Weibo is well-positioned to continue our ad revenue momentum, leveraging our strength in social, mobile, and soon video advertising.

With that, let me now turn to Q&A. Operator, we're ready for questions. Thanks.

(Operator Instructions). Tian Hou, TH Capital.

Hi, Herman, Gaofei. I have a question related to your video. On the one hand, we are seeing rapid growth. And on the other hand, videos is going to take a lot of bandwidth. So I wonder, going into 2016, what is your margin going to look like? That's the first question. I have one follow-up.

Good morning, Tian. This is Herman.

Hi, Herman.

What we expect is that our video has taken off in the fourth quarter, and you're seeing that that strong growth is going into 2016. So I think, as we mentioned on our prepared remarks, that we expect to launch our video advertising later on this year.

So I think, in the first few quarters, you'll probably see a couple of points margin dampening. But as our video revenue takes off, you'll see over time, that our margins should recover from the video advertising that we generate.

I think with respect to the exact margin impact, I think over the next few years we'll have to see how successful we are with video. But in general, we think that probably will cost us a couple percentage points.

Okay, got it. So for the verticalization strategy, I wonder what's the current verticals that's your -- are your priorities or the top verticals? And into 2016, what are some other verticals that you plan to expanded into?

(Interpreted). Yes, for 2015, our key verticals that we focused on were e-commerce and entertainment related. And in 2016, we'll also add auto, and then also the e-commerce related to SMEs, mainly KOL commerce, key opinion leaders or Internet influencers, which I talked about in our prepared remarks.

Thank you, Gaofei and Herman. So I'll give the floor to others.

Gene Munster, Piper Jaffray.

Good morning. If you could talk Herman, a little bit about the user growth. It's been pretty consistent at 30%, for the past couple years. As you think about the addressable market for users -- daily active users, how big is that opportunity?

And then, how should we think about that growth over 2016? Should there just be a natural deceleration, just given the [rather] large numbers, or any other comment? Thanks.

Hey, Gene, I missed the first part. You were talking about how big the opportunity is for -- could you elaborate on the first two sentences you made? It wasn't clear. It didn't come across.

The opportunity in terms of the user growth. How should we think about user growth, going forward? It's been at around 30%. How should we generally think about that in 2016, or how should we think about the law of large numbers, related to the strength you've had in user growth?

And then separately is just how -- what do you see as the addressable user opportunity in China? Thanks.

(Interpreted). Yes, Gene. So if you look at our total user growth, we're growing over 30% in 2015. And if you look deeper into our mobile user growth, we actually are seeing 46% year over year. So when you compare that to other social products in China, the largest social apps and so forth, we're growing significantly faster than they are.

So I think if you look into 2016, one thing you'll see is that we'll focus continue on the growth of mobile users. And we hope to further penetrate lower-tier cities.

Okay. And then just a quick follow-up on the video theme. You talked a lot about it. In terms of when we could start to see more of an impact to the model, is it kind of 2017? Is that how we should be thinking about that?

You're talking about video revenues?

that's correct, yes.

Yes, I think we will be launching our video advertising products later on this year. I think in terms of how much impact there will be, I think we have to go through our trial phase first, before we can make an assessment. Typically, when a product launches, as you know, Gene, we first have to beta test it, and then we might have to tweak it. We have to educate the channel, and the customers on how to use it.

But at the same time, if you look at how we have prepared for this, over the last year, we started with a Weibo Plus-TV program to put a lot of FMCG users and other ones that spend money on traditional media, and then boost up our video traffic.

So I think the market in China is very well-trained on using online video advertising. So we'll have to see, as we roll that product out.

Great. Thank you.

Claire Cao, Morgan Stanley.

Hi. Thanks, management, for taking my questions.

My first question is related to the CPMs and [ALO] level in the fourth quarter. Can management give us a rough number? Thanks. And I have a follow up.

(Interpreted). Yes, with regards to CPM and [ALO], our CPM in the fourth quarter was approximately RMB18, which grew 20% and our [ALO] was approximately 2.7%, which is up from 2.3% the prior quarter.

Oh, okay. Thanks. My second question is related to the SME ads. I think it was mentioned, like SME traditional channel revenue was up 91%, year over year, which was pretty strong. I'm just wondering what's the major driver behind this growth. Like what percentage is contributed by the increase in number of SMEs and what is contributed by the ASP increasing? Thanks.

Yes, so you're talking about our SMEs. We actually have two type of SME. I think you're referring to the one that's going through the channels. I think the driver -- we don't -- we're looking at the total SMEs, and we're seeing both the number of SMEs customers, as well as the ARPA, the spending per advertiser, increasing.

I think what has allowed us to grow in the fourth quarter, as we talked about, historically the top-three sectors in SME are e-commerce, O2O, app download. Going into the fourth quarter, we also have increased revenue coming from P2P finance. So I think that just -- one part of the reason is the fact that we also diversify our customer set to include other sectors.

Okay, thanks. That's very helpful.

Thank you.

Juan Lin, 86Research.

Hi. Good morning, Herman and Gaofei. Thank you for taking my question.

My question is related to the web native content. So I'm wondering, since Tencent just put out a RMB200m subsidy to the web native content owners, I'm wondering whether Weibo will have a similar program this year to grow your native content, especially the vertical content. Thank you.

(Interpreted). Yes, so our strategy to incentivize self-media bloggers are different than our peers, such as Baidu and Tencent. Whereas their model, they would spend the money and make that investment to acquire the content, our model is more a fans' economy, where we allow them to actually grow their fan base, and also allow the fan base to tip them.

We give them different type of incentive mechanism, as we mentioned in our prepared call. In 2015, through tipping, through other various ways in which the self-media bloggers can monetize, we actually gave out a revenue share of RMB250m, so that's approximately $40m.

So we believe that this system is better for Weibo to be able to have mechanisms on Weibo to motivate them to actually write more.

So if we look at the China market, we will see that some of our peers will actually go and buy content to incentivize self-media to write. But we believe that with Weibo and with Weishing because we're able to allow them to build their fan base and for them, the users, to actually pay for the content, that we believe this is a better way to do it.

Rather than for us, as a platform, to purchase the content, we give them a mechanism where the self-media can actually collect monetization from the user itself. That way it will incentivize them to actually write content that will generate more revenue for them.

Thank you. Can I ask a second question, if I might? The second question is related to your video content. I'm wondering what percentage of your total traffic is generated from video content. And what are the main sources of your video content, and whether you are going to launch any new video products this year? Thank you. That's all my questions.

(Interpreted). Yes, for feeds share to Weibo, on a daily basis, probably in the millions level. As a percentage of total feeds being shared on Weibo, it's still a very small percentage. So this is an area that we'll focus on this year, to actually grow more user-generated video content.

So with regards to video source, we'll do two things. Number one is we will look at those celebrities, media account, and also self-media accounts, who are already very successful on Weibo, to encourage them to send feeds in video format. We'll also look at other key opinion leaders and influencers in China that's not currently on Weibo, and encourage them to come to Weibo, to share the video content.

Thank you very much. That's very helpful.

Thank you.

Dick Wei, Credit Suisse.

Hi, thanks for taking my question. This is [Dan Zhou], calling on behalf of Dick Wei. And can you give some color on the top-line outlook for the whole year, in 2016?

And another question. We see that there's $7m loss in our non-operating income, in the impairment on investments. Could you please specify on this item? Thanks.

Yes. So the first question is our top-line outlook for the whole year. As you know, as a practice for Weibo, we don't give full-year guidance. We give revenue guidance for the year -- for the most recent quarter that's upcoming.

With regards to the $7m loss, so as you probably know, we have two Weibo funds. And we make investments in companies that we think would really help build Weibo's ecosystem. The $7m relates to several companies. And we're required, on a quarterly basis, under US-GAAP to assess the impairment of our investments.

So being this, at the quarter end, as we went through the whole process, we saw several companies that we felt that meets our accounting policy, in which we have to write down the cost that was on our books. Thank you.

Okay. Thank you.

Thank you. That concludes our question and answer session. I would now like to turn the conference back over to Ms. Chen, for any closing remarks.

Thank you for joining us, everyone. This concludes today's conference call.

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the Company sponsoring this Event.