Photo/Shetuwang

Oct. 15 (NBD) -- Sina Weibo (Weibo), China's twitter-like platform, is reported to acquire its live-streaming partner, Yizhibo.

An informed source confirmed the deal with NBD, saying that operations of Yizhibo have been moved into Sina Plaza, the principal office for Sina Corporation that operates Sina.com and Weibo. 

The acquisition marks a closer cooperation between these two, in that Weibo, with its resources, will shield the video app from the impact of aggressive expansion of short-video apps like Kuaishou and Douyin, and in return, Yizhibo will help boost the social platform's revenues from video ads, the source added.

The deal is expected to be closed by the end of this year, according to media reports.

Launched in 2016, Yizhibo became a built-in app on Weibo. Ever since, the latecomer in the live-streaming sector has enjoyed carefree development by leveraging Weibo's huge user traffic. However, as the live-streaming industry sees reshuffle and Douyin, Kuaishou and other short-video apps rise, non-top live-steaming players start to face challenges.

According to statistics released by Jiguang, a mobile big data solutions platform in China, Yizhibo this June was elbowed out of top 7 live-streaming applications in terms of penetration rate.

Some industry insiders analyzed while the core of live streaming lies in interaction and strong social networking characteristic, Weibo, despite its edge in user traffic, boasts greater attributes of a media platform than a social platform. As a result, after the novelty wore off, Yizhibo inevitably lost users to other live-streaming platforms including Douyu, Huya and Inke. 

Zhang Yi, founder of iiMedia Research, a consulting agency in the mobile internet industry, said to NBD that the takeover of Yizhibo is aimed to beef up Weibo's expansion in the video sector and complete the social platform's deployment in the video social networking domain.

Zhang regarded video social networking as the next leading model of social media products, adding that Weibo has yet to establish presence in this niche sector. 

In addition, Zhang observed that various platforms currently were competing for users' time and clients' ads budgets, and Weibo's brand advertisers were considering videos for next year's advertising activities, judging from situations in the second half of this year. To acquire Yizhibo would be beneficial for boosting Weibo's advertising revenue, Zhang held.

Founder Securities echoed Zhang's view in a report, believing that as Weibo sells more video ads and other new ad formats, the average unit price of its ads will possibly increase, creating upside potential for its Average Revenue Per User.

Email: gaohan@nbd.com.cn