DRS Letter

DRSLTR 1 filename1.htm DRS Letter

LOGO

Confidential

February 18, 2014

Barbara C. Jacobs, Assistant Director

Maryse Mills-Apenteng, Special Counsel

Ji Kim, Attorney-Adviser

Craig Wilson, Senior Assistant Chief Accountant

David Edgar, Staff Accountant

Division of Corporation Finance

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

RE:

Weibo Corporation

CIK No. 1595761

Response to the Staff’s Comment Letter Dated February 5, 2014

Dear Ms. Jacobs, Ms. Mills-Apenteng, Ms. Kim, Mr. Wilson and Mr. Edgar:

On behalf of our client, Weibo Corporation, a foreign private issuer organized under the laws of the Cayman Islands (the “Company”), we submit to the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) this letter setting forth the Company’s responses to the comments contained in the Staff’s letter dated February 5, 2014. Concurrently with the submission of this letter, the Company is submitting its revised draft registration statement on Form F-1 (the “Revised Draft Registration Statement”) and certain exhibits via EDGAR to the Commission for confidential non-public review pursuant to the Jumpstart Our Business Startups Act (the “JOBS Act”).

February 18, 2014

Page 2

To facilitate your review, we have separately delivered to you today five courtesy copies of the Revised Draft Registration Statement, marked to show changes to the draft registration statement confidentially submitted to the Commission on January 9, 2014, and two copies of the submitted exhibits.

The Staff’s comments are repeated below in bold and are followed by the Company’s responses. We have included page references in the Revised Draft Registration Statement where the language addressing a particular comment appears. Capitalized terms used but not otherwise defined herein have the meanings set forth in the Revised Draft Registration Statement.

In addition to adding and revising disclosure in response to the Staff’s comments, the Company has updated the Revised Draft Registration Statement to reflect the Company’s financial statements for the full year 2013 and the Company’s recent developments.

General

We will process your filing without price ranges. Since the price range triggers a number of disclosure matters, we will need sufficient time to process the filing when it is included. Please understand that its effect on disclosure throughout the document may cause us to raise issues on areas not previously commented upon.

The Staff’s comment is noted. The Company confirms that it will include the estimated price range, estimated size of the offering and all other required information in subsequent amendments to its Form F-1 prior to any distribution of preliminary prospectuses as soon as such information becomes available.

Please supplementally provide us with copies of all written communications, as defined in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your behalf, present to potential investors in reliance on Section 5(d) of the Securities Act, whether or not they retain copies of the communications. Similarly, please supplementally provide us with any research reports about you that are published or distributed in reliance upon Section 2(a)(3) of the Securities Act of 1933 added by Section 105(a) of the Jumpstart Our Business Startups Act by any broker or dealer that is participating or will participate in your offering.

The Company confirms that neither the Company nor any of its authorized representatives has presented to potential investors any written communication in reliance on Section 5(d) of the Securities Act. The Company further confirms that no broker or dealer that is participating or will participate in the Company’s offering has published or distributed any research reports about the Company in reliance upon Section 2(a)(3) of the Securities Act added by Section 105(a) of the JOBS Act. The Company will provide the Staff with the requested written communications and research reports in connection with the proposed offering, if any.

February 18, 2014

Page 3

3.	Please provide us with copies of any graphical materials or artwork you intend to use in your prospectus. Upon review of these materials, we may have further comments. Please refer to Question 101.02 of our Securities Act Forms Compliance and Disclosure Interpretations available on our website.

In response to the Staff’s comment, the Company confirms that it will submit the proposed artwork as soon as it is ready.

We note your extensive use of industry jargon and acronyms. Please revise your disclosure, to the extent possible, to eliminate industry jargon and to replace acronyms, such as CPM, CPE, VIE, and ICP, among others, with concise, readily understandable phrases that describe the concepts you seek to convey. Please define each acronym the first time it is used.

In response to the Staff’s comment, the Company has revised the disclosure to eliminate industry jargon and replace acronyms, including CPM, CPE, ICP and others. The Company respectfully submits that VIE is a widely understood acronym used in both offering documents and the financial press, particularly in relation to companies with operations in China. Therefore, the Company defines “VIE” the first time it appears and uses VIE throughout the prospectus.

5.	Wherever you provide an amount in RMB, please provide the U.S. Dollar equivalent. See, for example, pages 65, 140, and 141.

In response to the Staff’s comment, the Company has revised the disclosure to provide the U.S. dollar equivalent in each place where an RMB amount is given.

Facing Page

6.	Please disclose the name and address of your agent in the United States. Refer to Item 4.A.4 of Form 20-F.

The Company respectfully advises the Staff that it will appoint an agent in the United States and provide the required information no later than the first public filing of the registration statement.

Prospectus Summary

Our Business, page 1

Please include a prominent discussion of your relationship with your parent company SINA whose chief executive and financial officers are also your chief executive and financial officers. Discuss your status as a “controlled company” given SINA’s majority ownership of your ordinary shares and your plan to rely on the “controlled company” exemptions from certain corporate governance requirements.

In response to the Staff’s comment, the Company has provided the requested disclosure on pages 2 and 110. Regarding the Company’s chief executive officer and chief financial officer, please see the response to comment 20 below.

February 18, 2014

Page 4

8.	Please provide support for your statement that you are a “leading social media platform.”

In response to the Staff’s comment, the Company has provided in Annex A copies of documents supporting the statement that the Company is a “leading social media platform.” The specific portions of these documents are also marked for your easy reference. The Company further advises the Staff that all of these documents are publicly available.

9.	Please provide support for the following descriptions of your business on page 1 and clarify the standard or measure on which you base your claims:

•

By providing “an unprecedented and simple way” for people to express themselves, “Weibo has had a profound impact in China….”

•

“Weibo has become a cultural phenomenon in China.”

•

“For many people in China, Weibo is a life-changing experience….”

•

“Weibo is also fundamentally changing the media industry in China….”

In response to the Staff’s comment, the Company has provided in Annex B copies of documents supporting some of the descriptions above, including “unprecedented and simple” and “cultural phenomenon.” The specific portions of these documents are also marked for your easy reference. The Company further advises the Staff that all of these documents are publicly available. In addition, the Company has also revised some of the descriptions above, including “life-changing” and “fundamentally changing,” to conform more closely to plain English style.

10.

Please expand your disclosure to discuss in greater detail and in quantitative terms your revenue sources. Clarify, if true, that you do not generate revenues from users or platform partners. If you generate revenues from these sources, disclose whether the amounts generated are material. Further explain the differences among users, platform partners, and customers and the extent to which there is overlap among these categories.

In response to the Staff’s comment, the Company has revised the disclosure on pages 2 and 110 of the Revised Draft Registration Statement.

11.

Please revise your disclosure throughout to avoid using vague terms, such as “extraordinary,” “real difference,” “profound” and the like in describing your business services. We refer, for example, to statements such as “[p]eople can accomplish extraordinary things through Weibo” (page 4). To the extent possible, describe your services and the impact of your services using more precise, objective, and quantitative terms.

In response to the Staff’s comment, the Company has revised the disclosure throughout the Revised Draft Registration Statement to describe its services and the impact of its services using more objective terms.

February 18, 2014

Page 5

12.

Please disclose in the Prospectus Summary that your financial statements were prepared on a carve-out basis.

The Company respectfully advises the Staff that its combined and consolidated financial statements are full financial statements that have already reflected all direct and indirect costs and expenses of operating the Weibo business, in compliance with SAB Topic 1B. The reference to the “carve-out” basis in other areas of the filing is intended to indicate that some parts of the Weibo business were facilitated by SINA and that the financial statements have reflected those revenues, costs and expenses. The Company has revised the disclosure on pages 2 and 110 of the Revised Draft Registration Statement.

Corporate History and Structure, page 8

13.

Please include a cross-reference to the more detailed discussion of your corporate history and structure beginning on page 64 of your prospectus.

In response to the Staff’s comment, the Company has added the requested cross-reference on page 10 of the Revised Draft Registration Statement.

Conventions Which Apply to this Prospectus, page 10

14.

Please clarify, consistent with your disclosure on page 24, that a user may have more than one account and that the MAU and DAU metrics therefore could count the same user more than once. Disclose also that these internal statistics have not been independently verified. Provide similar clarifying disclosure in your Management’s Discussion and Analysis and Business sections. In addition, please clarify in the glossary that “MAU” and “DAU” refer to monthly active users and daily active users, respectively.

In response to the Staff’s comment, the Company has revised the disclosure on pages 3, 12 and 79 of the Revised Draft Registration Statement.

Risk Factors, page 17

General

15.

Please tell us what consideration you have given to including a risk factor discussing the recent recommendation by the Commission’s Administrative Law Judge that your accounting firm, PricewaterhouseCoopers Zhong Tian LLP, be suspended from auditing U.S.-listed companies for six months, and the impact this may have on your financial statements and operations.

In response to the Staff’s comment, the Company has revised the disclosure on pages 49 and 50 of the Revised Draft Registration Statement.

February 18, 2014

Page 6

Risks Related to Our Business

“If we are unable to compete effectively for user traffic…,” page 18

16.

Please disclose any recent declines in user traffic and user engagement and discuss any material impact on your operating results.

In response to the Staff’s comment, the Company confirms that it has not observed recent declines in user traffic or user engagement. The Company has updated the disclosure on pages 3 and 79 to show that its monthly active users increased from 123.1 million for September 2013 to 129.1 million for December 2013 and its average daily active users increased from 58.9 million for September 2013 to 61.4 million for December 2013.

The China Internet Network Information Center, or CNNIC, issued a report in Chinese in January 2014 entitled “China Internet Development Statistical Report” which reported that the number of microblog users in China and the percentage of internet users in China who used microblogs had declined from 2012 to 2013. Because weibo is the Chinese word for “microblog” and Chinese characters do not distinguish between proper nouns (“Weibo” meaning Weibo Corporation) and common nouns (“weibo” meaning microblog), some media sources misunderstood the CNNIC report to mean that the Company had experienced a decline in user traffic in 2013. One media source that had a relatively clear explanation stated:

The China Internet Network Information Center (CNNIC) released a report on Jan. 16 in which it said that the number of Weibo users had dropped by 9.2%, or 27.83 million last year. The market misinterpreted the Weibo or microblog users mentioned in the report as Sina Weibo users … The report was related to all Weibo users, including Sina, Tencent, Sohu and NetEase, rather than just Sina Weibo users alone.

http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20140128000142&cid=1102

In response to the CNNIC report and the reaction to it, the Company has revised the disclosure on pages 22, 50 and 51 of the Revised Draft Registration Statement.

February 18, 2014

Page 7

“We expect to generate a significant portion of our advertising and marketing…,” page 21

17.

You have included a projection of the revenues that you expect to generate in connection with your alliance with Alibaba. Please explain and disclose the basis for presenting this projection, including the assumptions used to support your projection. Alternatively, revise to remove this disclosure. See General Instruction C.4 of Form 20-F.

In response to the Staff’s comment, the Company respectfully explains that the projection of $387 million is based on a contractual term contained in the Business Cooperation Agreement dated April 29, 2013, between Weimeng and an affiliate of Alibaba Group. This agreement states that Alibaba commits to purchase from the Company and SINA up to RMB2.3 billion of advertising services for their own products and services and/or on behalf of their merchants, subject to the Company’s provision of sufficient advertising resources. SINA’s portion is not to exceed 15%. The Company will file a translation of this agreement as an exhibit to the registration statement. The disclosure on pages 23 and 73 assumes that the Company will meet the condition for the purchase commitment from Alibaba.

18.

Please include a cross-reference to the discussion of your relationship with Alibaba on page 70.

In response to the Staff’s comment, the Company has added the requested cross-reference on page 23 of the Revised Draft Registration Statement.

“Privacy concerns relating to our products and services…,” page 22

19.

You disclose that in Hong Kong, you are prohibited from collecting user information without a user’s prior consent. Please explain the impact such restrictions in Hong Kong and other jurisdictions with similar prohibitions have had on the effectiveness of your social interest graphs and your ability to sell advertising to your customers.

The Company respectfully advises the Staff that less than 1% of its revenues are generated in Hong Kong and other jurisdictions with similar prohibitions, and consequently that such prohibitions have had no significant effect on the Company’s business or financial performance.

In response to the Staff’s comment, the Company has revised the referenced disclosure on page 26 of the Revised Draft Registration Statement.

February 18, 2014

Page 8

“Our business and growth could suffer…,” page 25

20.

We note that members of your executive team and your board of directors also serve on the executive team and board of directors of SINA, your parent company. In particular, your chief executive officer, Charles Chao, also serves as SINA’s chief executive officer, and your chief financial officer, Herman Yu, also serves as SINA’s chief financial officer. Please explain how you plan to handle potential conflicts of interest with respect to areas of business that potentially overlap with SINA and whether you have any policies in this regard. Please also disclose whether you carry key man insurance on your key employees.

The Company respectfully advises the Staff that it has appointed a separate chief executive officer of the Company as indicated in the Revised Draft Registration Statement. In addition, the Company has hired a new chief financial officer with the necessary finance and accounting background and expects the new chief financial officer to join the Company in the near future. As the Company is a consolidated, majority-owned subsidiary of SINA, Mr. Yu, who has been SINA’s chief financial officer since 2007, is very familiar with and will continue to oversee the Company’s financial and accounting matters. As disclosed on page 72 of the Revised Draft Registration Statement, the Company will enter into a non-competition agreement with SINA effective upon the completion of this offering that is designed to handle potential conflicts of interest with respect to areas of business that potentially overlap with SINA. The Company also affirms that it will adopt a code of ethics and business conduct for all of its directors and executive officers that will cover, inter alia, conflicts of interest that arise due to their potential or actual interests in other companies, including SINA.

As disclosed on page 137 of the Revised Draft Registration Statement, the Company does not carry key-man insurance on its key employees.

Risks Related to Our Carve-out from SINA and Our Relationship with SINA, page 29

Risks Relating to Our Corporate Structure, page 33

21.

We note that your contractual arrangements may not be as effective in providing control over Beijing Weimeng Technology Co., Ltd (the “VIE”) as direct ownership due to uncertainties in the interpretation and enforcement of PRC laws and regulations. We further note that such uncertainties could limit your ability to enforce your contractual arrangements and you may lose effective control over the VIE and assets owned by your VIE and its subsidiary. Please revise to clarify that a loss of control would result in deconsolidation of the VIE and its subsidiary.

In response to the Staff’s comment, the Company has revised the disclosure on page 36 of the Revised Draft Registration Statement.

“If the PRC government finds…,” page 33

22.

We note your statement that “[i]n the opinion of [y]our PRC counsel” your current ownership structure, the ownership structure of your subsidiary, and the VIE are in compliance with PRC law, as well as your statement in the following risk factor that you have been “advised by your PRC counsel” that your contractual relationships with the VIE are valid, binding, and enforceable under PRC law. Please name your PRC counsel in the prospectus and file as an exhibit to your registration statement a copy of your PRC counsel’s opinion, as well as counsel’s written consent to being named in the prospectus and to your references to the opinion in the prospectus.

In response to the Staff’s comment, the Company has revised the disclosure on page 36 of the Revised Draft Registration Statement. The Company is submitting as Exhibit 99.2 to the Revised Draft Registration Statement a copy of PRC counsel’s opinion, which includes counsel’s written consent to being named in the prospectus and to the references to its opinion in the prospectus.

February 18, 2014

Page 9

Risks Relating to Doing Business in China

“Regulation and censorship of information disseminated over the internet…,” page 35

23.

Please discuss how the regulation and censorship of information disseminated over the internet in China has impacted your user base, your users’ engagement with your platform and your ability to monetize your users’ activity.

The Company respectfully advises the Staff that government policy may have impacted some users, but the Company is not able to isolate the impact of the censorship policy on its user base because the Company’s overall user base and user engagement are growing and because usage of the Company’s platform tends to fluctuate based on the occurrence of major media events. In response to the Staff’s comment, the Company has revised the referenced risk factor on page 38 to disclose that the regulation and censorship may have potential adverse impact on the Company.

“We and/or our Hong Kong subsidiary may be classified…,” page 40

24.

Please make clear here, or elsewhere as appropriate, the basis for your belief that you should not be treated as a resident enterprise and include an assessment of your business under the four conditions discussed in this risk factor.

The Company respectfully advises the Staff that it believes that neither the Company nor its Hong Kong subsidiary is a PRC resident enterprise because neither the Company nor its Hong Kong subsidiary meets all of the conditions enumerated in the Notice Regarding the Determination of Chinese-Controlled Offshore Incorporated Enterprises as PRC Tax Resident Enterprises on the Basis of De Facto Management Bodies. For example, board and shareholders’ resolutions of the Company and its Hong Kong subsidiary are adopted outside of mainland China and the minutes and related files are kept outside of mainland China. In response to the Staff’s comment, the Company has revised the disclosure on page 43 of the Revised Draft Registration Statement.

Special Note Regarding Forward-Looking Statements and Industry Data, page 56

25.

We note your statement in this section that you “have not independently verified” the data and estimates obtained from industry publications and reports. Please note that if you choose to utilize industry data in a prospectus, you adopt such information and are responsible for the content. Accordingly, please revise the text in this section as necessary so that you do not suggest that you could lack a reasonable belief as to the completeness and accuracy of the industry data you elect to include in your filing.

In response to the Staff’s comment, the Company has revised the disclosure on page 59 of the Revised Draft Registration Statement.

February 18, 2014

Page 10

26.

Many of the statements in your submission relate to present facts or conditions, rather than to historical facts or future events. In light of this, the second sentence of this section beginning, “[a]ll statements other than statements of historical facts…,” appears to be overly broad. Please narrow your statement accordingly or remove it.

In response to the Staff’s comment, the Company has revised the disclosure on page 59 of the Revised Draft Registration Statement.

Use of Proceeds, page 57

27.

Please discuss the interest rate and maturity applicable to your loan from SINA. To the extent the indebtedness was incurred within the past year, please discuss the uses of the loan proceeds. Refer to Item 3.C.4 of Form 20-F.

In response to the Staff’s comment, the Company has revised the disclosure on page 60 of the Revised Draft Registration Statement to discuss the interest rate and maturity applicable to the loans from SINA. The net balance of the loans decreased from $393.4 million as of December 31, 2012, to $267.7 million as of December 31, 2013, as shown in the Revised Draft Registration Statement.

Corporate History and Structure, page 64

28.

Please include a cross-reference to the risk factor subsection “Risks Relating to Our Corporate Structure.”

In response to the Staff’s comment, the Company has added the requested cross-reference on page 67 of the Revised Draft Registration Statement.

29.

Disclose here, consistent with your disclosure on page 41, that you rely principally on dividends and other distributions from your subsidiary for your cash needs.

In response to the Staff’s comment, the Company has revised the disclosure on page 67 of the Revised Draft Registration Statement.

February 18, 2014

Page 11

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview, page 74

30.

We note that in September 2013 over 70% of your average DAUs accessed Weibo from mobile devices. We also note from disclosure in other areas of the filing that mobile revenues accounted for over 28% of your advertising and marketing revenues in the first nine months of 2013. Please tell us what consideration was given to disclosing the percentage of your average DAUs that accessed Weibo from mobile devices in the comparable period. Also, in light of the disproportionate relationship between the percentage of mobile users and the percentage of mobile revenues, tell us what consideration was given to disclosing revenue per DAU and revenue per MAU by platform, to the extent management uses such metrics. Refer to SEC Release 33-8350.

In response to the Staff’s comment, the Company would like to clarify that the figure of 70% represents the number of DAUs that access Weibo from mobile devices at least once during the day in question. That is to say, if a user accesses Weibo from a PC and from a mobile device at different times on the same day, then this user is included among users who have accessed Weibo from a mobile device on that particular day in calculating the 70% figure. As the Staff’s comment suggests that the original wording may have been unclear, the Company has revised the disclosure in each place where the 70% figure is cited to clarify this point. Given the foregoing, the Company respectfully submits that the 70% number cannot be compared directly to the 28% number. The percentage of DAUs that access Weibo from mobile devices is useful as a measure of the degree to which users are open to experiencing Weibo on mobile devices, but it does not measure the percentage of the Company’s actual or potential advertising inventory associated with mobile devices.

The Company affirms that the management of the Company does not use revenue per DAU nor revenue per MAU by platform in managing the Company’s business or evaluating its performance. As stated in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (“MD&A”) section, the Company has a very short history of monetizing its platform and is still exploring the most effective ways of monetization without adversely affecting user experience. The Company generates advertising and marketing revenues principally from PC-based social display solutions, which it introduced in 2012, and to a lesser extent from mobile-enabled promoted marketing arrangements such as promoted feeds, which it launched in the second quarter of 2013. The Company believes that metrics based on average revenue per user by platform would largely reflect the Company’s own efforts in developing its inventory and therefore does not use such metrics. However, the Company has revised the disclosure to include a discussion on average revenue per user for advertising and marketing revenues on Page 80.

February 18, 2014

Page 12

Trends in Our User Metrics, page 77

31.

We note the following metrics disclosed in your overview section: the number of registered user accounts to date, the number of feeds shared by users in December 2013, the number of advertising and marketing customers for the nine months ended September 30, 2013, and the number of platform partners to date. However, you have not provided comparative metrics for prior periods, or changes therein. Please revise to disclose comparative metrics for the periods presented in the filing. Given the prominence of these metrics in your Management’s Discussion and Analysis overview, they would appear to be key performance indicators necessary to an understanding of trends in your business. Refer to Section III.B.1 of SEC Release 33-8350.

In response to the Staff’s comment, the Company has revised the disclosure on page 77 of the Revised Draft Registration Statement to add comparative metrics for the number of advertising and marketing customers, in addition to updating the numbers previously disclosed. (The Company had no customers in 2011 because it only began to generate revenue in 2012, and it had no customers aside from key accounts in 2012 because it only introduced advertising and marketing products for small-and-medium enterprises and individuals in 2013.) The Company respectfully submits that number of registered user accounts to date is not a key performance indicator and the Company has deleted that metric from the Revised Draft Registration Statement. In addition, the Company has removed the number of feeds shared by users and the number of platform partners from the MD&A section as the Company does not view these as key indicators of the Company’s financial performance for the same reasons stated in the Company’s response to comment 30.

32.

Please explain the difference between tier 1 cities and tier 2 cities in China.

The Company respectfully advises the Staff that the term “tier 1 cities” is commonly understood to include only four cities: Beijing, Shanghai, Guangzhou and Shenzhen. The scope of “tier 2 cities” is less precisely delineated, but it is commonly understood to include a couple dozen other large cities, mostly in the more developed coastal regions of China. For its internal purposes the Company classifies 21 cities in China as tier 2. Residents of tier 1 cities are early adopters of new technology and are influential in setting social trends, but this is also true of residents of tier 2 cities compared to residents of lower-tier cities and the rest of the country, and the Company does not draw a sharp distinction between tier 1 and tier 2 cities for purposes of marketing or strategy.

Key Components of Results of Operations, page 78

33.

You disclose on page 128 that you have local distributors that target SMEs throughout China. Please describe the fee arrangements, if any, you may have with these distributors and how such arrangements impact your cost of revenue or sales and marketing expense.

The Company respectfully advises the Staff that the Company provides two types of incentives, inventory rebates and marketing funds, to distributors based on their achieving quarterly key performance targets. Key performance targets include the sales made and the number of new customers developed by a distributor in a given quarter. A distributor who achieves its key performance indicators will receive rebates and/or marketing funds. Rebates are given in the form of advertising inventory while marketing funds are only used to reimburse the actual eligible expense of promoting the Company’s products and developing new customers incurred by the distributor upon the Company’s approval. The rebate is deducted from the Company’s revenue and thus does not impact cost of sales, and the marketing funds are recorded as marketing expenses. The Company first began providing marketing funds in 2013, and for the year ended December 31, 2013, marketing funds were responsible for $0.6 million in marketing expenses, or approximately 1% of sales and marketing expenses for that year.

February 18, 2014

Page 13

Results of Operations for the Years Ended December 31, 2011 and 2012 and Nine Months Ended September 30, 2012 and 2013

Gross profit (loss), page 81

34.

For what appears to be a key component of your results of operations, tell us why a discussion of gross profit (loss) is not necessary to understand your results of operations.

The Company respectfully advises the Staff that it does not consider gross profit (loss) to be a key component of its results of operations. The management of the Company does not view gross profit (loss) as a key performance indicator. The Company believes that investors place less emphasis on gross profit (loss) when evaluating social media and social networking companies either, but rather focus more on revenue and other financial measures. The Company notes that comparable companies, such as Twitter and Facebook, with similar components of costs of revenue do not discuss gross profit or gross margin in their period-on-period comparisons.

As the Company has disclosed on page 82, its cost of revenues consists mainly of costs associated with the maintenance of its platform, which mainly include bandwidth and other infrastructure costs, labor costs and turnover tax levied on its revenues. Aside from turnover tax, the other components of cost of revenues are relatively fixed in relation to revenues. As a result, the Company’s gross margin has changed dramatically from 2011, when it had significant cost of revenues but no revenues, to 30.0% in 2012 and 68.2% in 2013.

As the Company does not consider gross profit particularly significant for understanding the Company’s business or financial performance, and the Company does not believe that it should be given undue prominence, the Company has removed the gross profit line from the Revised Draft Registration Statement and revised the disclosure in the MD&A section accordingly.

Revenues

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

Other revenues, page 82

35.

We note that the increase was “mainly due to relatively low revenues for game-related services and VIP membership in 2012 as [you] only began to monetize [y]our platform during the first half of 2012.” Please revise to provide additional detail, including quantification, of the types of revenue including in this category. For example, please quantify changes in the VIP memberships or game-related revenue accompanied by an explanation for relevant changes such as the change in the number of paying game players or changes in price and volume. Refer to SEC Release 33-8350 and Form 20-F, Part I. Item 5.A.

In response to the Staff’s comment, the Company has revised the disclosure on page 85 of the Revised Draft Registration Statement.

February 18, 2014

Page 14

Liquidity and Capital Resources, page 85

36.

We note that substantially all of your future revenues are likely to continue to be in the form of RMB, and the inability to convert RMB into foreign currencies or remit foreign currency out of China may impact your liquidity, among other things. As of the most recent balance sheet date please revise to disclose, by respective denominations, the amount of cash located in each jurisdiction in which your affiliated entities are domiciled. For entities within China, disclose the amount of cash held by your VIE and its subsidiary separately from the amount of cash held by other entities.

In response to the Staff’s comment, the Company has revised the disclosure on page 89 of the Revised Draft Registration Statement.

37.

We note you have disclosed sources and amounts of your cash flows. However it is not clear that you have disclosed within this section the nature and extent of any legal or economic restrictions on the ability of subsidiaries or your parent to transfer funds to the company in the form of cash dividends, other payments, loans or advances and the impact such restrictions have had or are expected to have on the ability of the company to meet its cash obligations. In addition, you should disclose the SINA debt arrangement terms, currency and interest rate structure and any restrictions on use of funds. Revised disclosure should also give consideration to the currencies in which cash and cash equivalents are held and the extent to which borrowings are at fixed or variable rates. See Form 20-F, Part I Item 5.B Liquidity and Capital Resources.

In response to the Staff’s comment, the Company has revised the disclosure on pages 89 and 90 of the Revised Draft Registration Statement.

38.

We note material increases and changes in your consolidated statements of financial position and results over the reported periods. However it is not clear that you have addressed the disclosures required by Form 20-F, Part I Item 5.D. Trend Information. Please revise as applicable.

In response to the Staff’s comment, the Company has revised the MD&A section where necessary and appropriate and affirms that it has addressed the disclosures required by Form 20-F, Part I Item 5.D. Trend Information in several parts of the MD&A section. The Company supplementally explains that the material increases and changes in its consolidated statements of financial position and results over the reported periods are related to the fact that the Company has grown rapidly in the period of only a few years and only began to generate revenues in the first half of 2012.

February 18, 2014

Page 15

Industry, page 99

39.

Please provide us with the relevant portions of the industry research reports you cite, such as the data from the China Internet Network Information Center, Euromonitor, World Cellular Information Service, ZenithOptimedia, CTR Market Research and iResearch, among others. To expedite our review, please clearly mark each source to highlight the applicable portion or section containing the statistic, and cross-reference it to the appropriate location in your prospectus. Please advise whether any of the third-party reports and studies identified throughout the prospectus were commissioned for you or any of your affiliates. If so, please clarify this fact in the forepart of the prospectus summary. Please also disclose the name and date of each industry report or study cited throughout the prospectus.

In response to the Staff’s comment, the Company has provided in Annex C copies of each report and other backup documents supporting the various industry-related statements in the Revised Draft Registration Statement. The specific portions of these documents are also marked for the Staff’s easy reference. The Company further advises the Staff that all of these backup documents, including the industry research reports, are publicly available. The Company has also revised the Industry section to include the name and date of industry reports cited.

The Emergence and Increasing Importance of Social Media in China, page 100

40.

Please revise to include the names of the companies for each of the logos that appear in the graphic on page 100. We also note that the upper right quadrant of the graphic appears to contain a logo that is indecipherable.

In response to the Staff’s comment, the Company has revised the graphic on page 105.

Management

Directors and Executive Officer, page 147

41.

Please discuss any arrangement or understanding with your major shareholders or others pursuant to which any director or executive officer was selected as a director or executive officer. See Item 4 of Form F-1 and Item 6.A.5 of Form 20-F. In this regard we note your directors and executive officers’ relationship with SINA.

In response to the Staff’s comment, the Company confirms that there are no arrangements or understandings with the Company’s major shareholders or others pursuant to which any director or executive officer was selected as a director or executive officer except for Ali WB’s board appointment right described on page 156. As disclosed on page 156, the holders of a simple majority of the Company’s ordinary and preferred shares (on an as-converted basis) have the right to appoint any person to be a director. Each of the Company’s directors has been elected by the holders of a simple majority of the Company’s ordinary and preferred shares (on an as-converted basis), and each of the Company’s executive officers has been appointed by the board of directors. As disclosed on page 156, Ali WB will have the right to appoint a number of directors in proportion to the percentage of its ownership in the Company if it exercises its option in full, but as it has not exercised its option, it currently cannot exercise this right.

February 18, 2014

Page 16

Compensation of Directors and Executive Officers, page 150

42.

We note that you have disclosed compensation paid to your executive officers on an aggregate basis. Please supplementally confirm to us that you are not required to disclose the annual compensation of your executive officers on an individual basis under Cayman Islands or PRC law and that you have not otherwise publicly disclosed this information. Also, in this section, disclose the aggregate amount set aside or accrued by you for pension or other retirement benefits for your named executive officers and directors for the most recently completed fiscal year. See Item 4(a) of Form F-1 and Item 6.B of Form 20-F.

The Company confirms that it is not required to disclose the annual compensation of its executive officers on an individual basis under Cayman Islands or PRC law and that it has not otherwise publicly disclosed this information. In addition, in response to the Staff’s comment, the Company has revised the disclosure on page 158 of the Revised Draft Registration Statement to disclose that no amount has been set aside or accrued by it for pension or other retirement benefits for its named executive officers and directors for the most recently completed fiscal year.

Related Party Transactions

Transactions with SINA, page 155

43.

We note your disclosure of the contributions from SINA, as well as the amounts due, and liabilities accrued, to SINA. Please revise to disclose the nature and extent of the transactions underlying these payments. Please also revise to disclose the terms of the loans from SINA, including the amount outstanding as of the latest practicable date, the nature of the loan and the transaction in which it was incurred, and the interest rate on the loan. Refer to Item 7.B of Form 20-F. Please also file the loan agreement that governs the loan from SINA as an exhibit to the registration statement. See Item 8 of Form F-1 and Item 601(b)(10) of Regulation S-K.

The Company respectfully advises the Staff that, as disclosed in page 163, deemed contribution from SINA of $5.3 million in 2011 and $4.6 million in 2013 relates to the step acquisition of Weibo Interactive. These amounts were transferred to amount due to SINA when the legal transfer of Weibo Interactive was completed in December 2013. The remaining $8.5 million deemed contribution from SINA represented the interest waived for the interest charged prior to Alibaba’s investment in the Company in April 2013. “Amount due to SINA” is calculated based on actual spending incurred by SINA for the development of the Company’s business, adjusted by amounts repaid by the Company at each period end and presented as “Amount due to SINA” in the combined and consolidated balance sheets. The combined and consolidated statements of loss and comprehensive loss reflected a charge for interest on amount due to SINA, as well as on amounts included as accrued liabilities due to SINA, at prevailing market interest rates by reference to the three month time deposit rate of The People’s Bank of China, which ranged from 2.55% to 3.05%. There is no written loan agreement signed by SINA and the Company, and there is no fixed repayment date. In response to the Staff’s comment, the Company has revised the disclosure on page 163 and page F-24.

February 18, 2014

Page 17

Description of Share Capital

Ordinary Shares, page 157

44.

We note your statement that all of your outstanding shares are fully paid and non-assessable. This disclosure is a legal determination that should be made by counsel. Please revise or advise.

In response to the Staff’s comment, the Company has revised the referenced disclosure on page 165 to indicate that this statement is made on the advice of the Company’s Cayman Islands counsel.

Combined and Consolidated Statements of Loss and Comprehensive Loss, page F-5

45.

We note from disclosure in note 9 that advertising and marketing services provided to Alibaba are related party transactions. Please revise to label revenues from such transactions as related party revenues on the face of the combined and consolidated statements of loss and comprehensive loss. Refer to Rule 4-08(k)(1) of Regulation S-X.

The Company respectfully advises the Staff that it has revised the name of the line item to “Related party Alibaba” on the face of the combined and consolidated statements of loss and comprehensive loss.

Note 1. Operations and reorganization

Reorganization, page F-8

46.

We note that the table reflects 100% ownership of the VIE and its subsidiary by the company. However, it appears based on other disclosures in the filing that these entities are controlled by contract. Please revise accordingly or explain why revision is not necessary.

In response to the Staff’s comment, the Company has revised the disclosure on page F-8.

February 18, 2014

Page 18

Basis of Presentation for the Reorganization, page F-10

47.

We note that the combined and consolidated financial statements include the assets, liabilities, revenue, expenses, and cash flows that were directly attributable to the Weibo business. We further note from disclosure in other areas of the filing that the combined and consolidated financial statements included in the prospectus were prepared on a “carve-out” basis. Please explain with disclosure why full financial statements were not provided as required by Regulation S-X. To the extent it is impracticable for you to provide full financial statements, please revise to include an explanation for that impracticability.

The Company respectfully advises the Staff that its combined and consolidated financial statements are full financial statements that reflect all assets, liabilities, revenues and direct and indirect costs and expenses of operating the Weibo business, in compliance with SAB Topic 1B. The references to the “carve-out” basis in other areas of the filing are intended to indicate that some parts of the Weibo business were facilitated by SINA (for example, some of the advertising contracts of Weibo from which revenues have been recognized in the Company’s combined and consolidated financial statements were signed with the customers by SINA entities), but they are not intended to imply that these are not full financial statements. In response to the Staff’s comment, the Company has revised the disclosure in the Prospectus Summary to clarify the basis of preparation of the combined and consolidated financial statements

Combination and Consolidation, page F-10

48.

We note the table, which sets forth the assets, liabilities, results of operations, and changes in cash and cash equivalents of the VIE includes a total only for liabilities and the net change in cash. Please revise to disclose the liabilities and the cash flows of the VIE on a more disaggregated basis. Also, revise to disclose any significant related party transactions pertaining to the VIE. Lastly, describe the recognized and unrecognized revenue-producing assets that are held by the VIE which may include licenses, trademarks, other intellectual property, facilities or assembled workforce. Refer to ASC 810-10-50-2AA.d and 5A.d.

In response to the Staff’s comment, the Company has revised the disclosure on pages F-11 and F-12. The Company further advises the Staff that the unrecognized revenue-producing assets held by the VIE include the Internet Content Provision License and Online Culture Operating Permit, as disclosed in “Corporate History and Structure” on page 67. The other unrecognized revenue-producing assets held by the VIE include the domain names of weibo.com, weibo.cn and weibo.com.cn. Recognized revenue-producing assets includes customer lists, game platform technology and the non-compete agreement, which were acquired upon the acquisition of Weibo Interactive as disclosed on page F-25. Unrecognized revenue-producing assets, including customer lists and trademarks, are held by the WFOE.

February 18, 2014

Page 19

49.

We note that Weibo Technology has the right to determine the service fee to be charged to VIE under these agreements by considering, among other things, the technical complexity of the service, the actual cost that may be incurred for providing such service, the operations of VIE, applicable tax rates, planned capital expenditure, and business strategies. We further note that the amount of such fee was $54.5 million for the nine months ended September 30, 2013. Please revise to disclose the amount of such fees for prior periods, if any, and describe how the fees were determined.

In response to the Staff’s comment, the Company respectfully advises the Staff that the Company did not charge the VIE service fees for the years ended December 31, 2011 and 2012, as the Company had just started commercialization of its business in 2012 and the VIE was in an accumulated loss position. The Company further advises the Staff that the Company, through its wholly owned subsidiary Weibo Technology, has the de facto right to determine the service fees to be charged to its VIE. The Company has revised the disclosure on page F-12.

50.

We note your disclosure that “uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the company’s ability to enforce these contractual arrangements.” Please revise to also state that these risks could lead to deconsolidation of the VIE.

In response to the Staff’s comment, the Company has revised the disclosure on page F-13.

Note 2. Significant Accounting Policies

Revenue recognition

Advertising and marketing revenues, page F-16

51.

We note that revenue from display advertisements placed on your platform for particular periods of time is recognized ratably over the contract period. Please revise to disclose the customary periods, or a range of periods, over which revenue is recognized.

The Company respectfully advises that the contract period for display advertisements placed on the Weibo platform is short, typically no more than three months. The Company has revised the disclosure on page F-16.

52.

We note your disclosure that advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their relative fair value for revenue recognition purposes. Please tell us how your allocation method is consistent with the ASC 605-25-25-2 which requires that arrangement consideration be allocated among the separate units of accounting based on their relative selling prices.

The Company respectfully advises that its advertising revenues with multiple-element arrangements relate to its display advertising arrangements, which allow customers to place advertisements on particular areas of the Company’s platform in particular formats and over particular periods of time. Over 99% of advertising revenues are related to elements delivered in the same year or over the same pattern of delivery, and less than 1% of advertising revenues had multiple-element arrangements that spanned into the next financial year and had a different delivery pattern. For multiple-element arrangements which are delivered in the same accounting period or have all of the elements delivered in the same pattern, revenues are recognized ratably over the contract period. In accounting for multiple-element arrangements that have different delivery patterns, the Company considers each format of advertising to be a separate unit of accounting as the criteria of ASC 605-25-25-5 are satisfied and determines the fair value of each element of deliverable primarily based on vendor-specific objective evidence of selling price as required by ASC 605-25-30-2. For the deliverables that have not been sold separately, management’s best estimate of the selling price will be used. See the Company’s response to comment 53 below. As a result, while the Company follows ASC 605-25-30-2 in allocating arrangement consideration, it also respectfully advises the Staff that the impact of determining fair value for each element of multiple-element arrangements to the financial statements is not currently significant to its revenue recognition.

February 18, 2014

Page 20

53.

We note that for deliverables that have not been sold separately your best estimate of the selling price (“BESP”) is used. Please revise to disclose a more detailed explanation of how you determine BESP including any factors, trends, inputs, techniques or assumptions that you incorporate into your analysis. Refer to ASC 605-25-50-2(e).

The Company respectfully advises the Staff that for deliverables that have not been sold separately, the best estimate of the selling price takes into consideration the pricing of advertising areas of the Company’s platform with similar popularity and advertisements with similar format. For each period presented, the Company respectfully advises that it considers the impact of revenue recognized with “BESP” to the financial statements to be insignificant.

Other revenues, page F-16

54.

We note that game-related revenues from the sale of virtual currency, and ultimately virtual items, through your game platform are recognized over the estimated consumption period which is typically from a few days to one month after the purchase of in-game credits. Please explain how you establish what is meant by the “consumption period.” Please tell us how you considered whether any virtual items purchased by game players are of a durable nature and if so, describe how you recognize revenue for such items.

The Company respectfully advises the Staff that the consumption period represents the period from the point when Weibo Credits are converted into in-game credits to the point when all of the purchased in-game virtual items are consumed. The Company assesses the estimated consumption period periodically, taking into consideration the actual consumption information, the types of virtual items offered in the game and user behaviour patterns, including average recharge interval and estimated user relationship on the game. The Company has considered the items with a durable nature in estimating the consumption period and the Company respectfully advises that it considers the impact to the financial statements to be insignificant. The Company will revise in future filings to provide additional details on the estimated consumption period of durable items, should the related revenue become material to its operations.

February 18, 2014

Page 21

55.

Please explain to us what is meant that game developers “have reasonable latitude to establish the prices of virtual items.” In this regard, tell us what pricing latitude the company has in the virtual item pricing.

The Company respectfully advises the Staff that game developers set the ratio of Weibo Credit to in-game credits together with Weibo. Game developers also have the sole discretion to set the price of in-game virtual items. Therefore, the Company respectfully advises the Staff that the Company has little pricing latitude in determining the pricing of virtual items.

Note 3. Investment in Weibo, page F-25

56.

Please tell us and revise the note under the caption “Amount due to SINA” to disclose the terms and conditions of the debt arrangement.

The Company respectfully advises the Staff that the “Amount due to SINA” is calculated based on actual spending incurred by SINA for the development of the Weibo business, adjusted by amounts repaid by the Company at each period end and presented as “Amount due to SINA” in the combined and consolidated balance sheets. The combined and consolidated statements of loss and comprehensive loss reflected a charge for interest on amount due to SINA, as well as on amounts included as accrued liabilities due to SINA, at prevailing market interest rates by reference to the three month time deposit rate of The People’s Bank of China, which ranged from 2.55% to 3.05%. There is no fixed repayment date. In response to the Staff’s comment, the Company has revised the disclosure on page F-24.

February 18, 2014

Page 22

Note 5. Equity Investment and Step-Up Acquisition, F-26

57.

Please provide us with the computation supporting the “Remeasurement gain upon obtaining control” of Weibo Interactive in the amount of $3,116,000. Tell us how the remeasurement gain computation complies with ASC 805-10-25-10. Explain the basis for using a discounted cash flow method at the acquisition date as the fair value price, which is the price that would be received to sell in an orderly transaction between market participants at the measurement date.

The Company respectfully advises the Staff that since there are no readily available actual transactions or offers for economically comparable business assets available as of the acquisition date to value the previously held non-controlling equity method interest, it utilized the discounted cash flow method to determine the fair value of that interest. The Company did not believe it appropriate to simply mathematically calculate the fair value of a pre-existing non-controlling interest solely on the basis of extrapolating the $4.6 million paid in 2013 for the remaining 45% controlling interest, although it did consider that information in corroborating the fair values derived from its discounted cash flow analysis. The discounted cashflow method also considers factors like economic conditions, industry conditions and comparable companies’ financial information. In accordance with ASC 805-10-25-10, in a business combination achieved in stages, the Company remeasured its previously held 55% equity interest in Weibo Interactive at its acquisition-date fair value and recognized the resulting gain or loss, if any, in earnings. Please refer to the computation below:


	As of acquisition date
	(In thousands)
Fair value of previously held 55% equity interest		5,445
Carrying amount of the 55% equity interest		2,329

Remeasurement gain upon obtaining control		3,116

The Company notes that extrapolating the $4.6 million paid for the 45% interest yields a total amount of $10.2 million, or $5.6 million for a 55% stake, which is materially consistent with the $5.4 million value estimated using the discounted cash flow model.

Note 14. Financial Instruments, page F-38

58.

We note that the option liability was measured using significant unobservable inputs (Level 3) when determining its fair value and we also note your disclosure the key inputs used to determine the fair value. However, you do not include the estimated fair value of your ordinary shares at the valuation date. Please tell us whether you consider this to be a key input and if so, revise accordingly. Also, revise to include a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement. Refer to ASC 820-10-50-2.

The Company respectfully advises the Staff that it will include the fair value of its ordinary shares as a key input into the table on F-38. In response to the Staff’s comment, the Company has revised the disclosure on page F-38.

Item 16. Exhibits and Financial Statement Schedules, page II-6

59.

Please file all exhibits as soon as possible. We must review these documents before the registration statement is declared effective and we may have additional comments.

The Company confirms that it will file all exhibits as soon as possible.

February 18, 2014

Page 23

* * *

If you have any questions regarding the Revised Draft Registration Statement, please contact the undersigned by phone at +852-3740-4850 or by e-mail at julie.gao@skadden.com. Questions pertaining to accounting and auditing matters may be directed to the audit engagement partner at PricewaterhouseCoopers Zhong Tian LLP, Elton Yeung, by telephone at +86-10-6533-2008, or by email at elton.yeung@cn.pwc.com. PricewaterhouseCoopers Zhong Tian LLP is the independent registered public accounting firm of the Company.

/s/ Z. Julie Gao

Very truly yours,

Z. Julie Gao

Enclosures

cc:	Charles Chao, Chairman, Weibo Corporation

Gaofei Wang, Chief Executive Officer, Weibo Corporation

Herman Yu, Acting Chief Financial Officer, Weibo Corporation

Elton Yeung, Partner, PricewaterhouseCoopers Zhong Tian LLP

Alan Seem, Shearman & Sterling LLP

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