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June 17 2010

Tencent to Acquire Comsenz?

There has been rumor on the market that Tencent will invest $10 million into Comsenz, the leading social softwares developer in China since May. It is said the new investment will take over the stakes held by Google China. Today, a report on Sina said Tencent will acquire Comsenz instead of just investment.

Comsenz, well known for its popular BBS software Discuz!, offers free full-range social softwares for hundreds of thousands of China’s small websites, including BBS, CMS, SNS, microblogging and other softwares. Why there are so many small BBS in China, one of the most important reasons is because of Comsenz and its Discuz!.

Why Tencent will be interested in Comsenz? To acquire Comsenz, Tencent can take advantage of broad user base of Comsenz, whose websites can potentially make a large-scale affiliated websites network, covering tens of millions of Chinese netizens. By working closely with Comsenz’s software, it can benefit Tencent’s new search engine Soso.com to compete with Baidu, and build an affiliation network for Tencent’s online ads. For Comsenz, working with Tencent will help to monetize traffics of those small websites.

It is reasonable for Tencent to make such investment. Actually, PHPWind, a head-to-head competitor of Comsenz has been acquired by Alibaba in 2008.

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  3. Comsenz Sells ECShop To ShopEX

China Web Radar | Permalink | No comment | Add to del.icio.us | Follow us on Twitter| China Tech Events
Post tags: Comsenz, PHPWind, Tencent

March 17 2010

3 Reasons Why Tencent’s Qzone, the Largest Social Network in China, is a Failure

(This is a guest post by Kai Lukoff. Kai Lukoff is an analyst at BloggerInsight and an editor on China Social Games. Follow Kai on Twitter @klukoff. You can find more information on China Social Game at the end of this post. )

Qzone, “the largest social network in China,” and Tencent’s other SNS (QQ Campus and Xiaoyou), are failures for three reasons:

  1. Squandered Opportunity: Chinese internet giant Tencent was enviously positioned to dominate social networking, but blew its chance. QQ Campus failed. Xiaoyou is far behind the competition. Qzone does not reach any new demographics.
  2. The Site’s Design and Features are Lousy: The Qzone website is an unintuitive eyesore. Its applications are of poor quality and frequently inaccessible.
  3. Is Qzone Really No. 1? Tencent’s claim of 305 million active users is highly suspect; even its classification as an SNS is questionable. Its competitors are encroaching upon its core user base of young teens.

Does this mean Tencent will soon collapse? Absolutely not.

Qzone is Tencent’s “Windows Vista”

Tencent with Qzone is like Microsoft with Windows Vista: a near-monopolist that thrives despite a terrible product and lack of vision.

Microsoft remains massively profitable despite releasing a terrible OS and missing out on all the new innovations (mobile, mp3 players, search, and social networking) that its competitors have seized upon (Apple, Google, and Facebook). Microsoft suffered from a stifling, dysfunctional corporate culture.

Benjamin Joffe, Tencent expert and CEO of internet market research firm +8*, told China Social Games:

Tencent is definitely not the best in terms of products or innovation – similar to Zynga in that sense – but their ability to deliver a ‘good enough’ mass market service and integrating it within their ecosystem is impressive.

Tencent is certainly massively profitable: 2009 revenues, just announced, were 1.82 bn USD, though it’s unclear what portion of the “internet value-added services” is attributable to Qzone.

Like Microsoft, Tencent will continue to profit in spite of the junk it produces. But Qzone does dampen Tencent’s star, opens the door for its SNS competitors (RenRen and Kaixin001), and questions its corporate culture.

#1 Squandered Opportunity

Tencent’s had awesome resources for building a social network:

  1. Instant user base. QQ Messenger has 485 million active users, which Tencent uses to cross-promote new services, like Qzone, on young Chinese netizens.
  2. High brand awareness. QQ is the first introduction to the internet for most Chinese.
  3. Many complementary sites. QQ Games, for instance, could be beautifully integrated with Qzone, but is instead poorly slapped together.
  4. Regulatory environment experience. As an early internet giant, Tencent knows how to reach the right government contacts and manage user-generated content.
  5. Financial capital. Tencent has deep, deep pockets.

In addition, Tencent had long aimed to expand from its core demographic of young teens to include a more mature audience. Social networking was clearly the perfect chance to do so.

Despite all these advantages, Tencent squandered the opportunity. Qzone never gained an audience beyond young teens. Instead, RenRen, which completely copied Facebook (as Tencent also could have done), attracted the student demographic. Kaixin001 has snapped up the valuable white-collar demographic with a simple, user-friendly site.

Most damningly, even users who start on Qzone almost all “graduate” to the other networks. In September of 2008, Tencent finally tried to retain users with QQ Campus, which failed and is now shut down.

In June 2008, Tencent finally responded with the SNS Xiaoyou (classmates), but the site has virtually the same lousy interface as Qzone, except with a decent skin. The apps and games are even fewer and lesser than those on Qzone. The first five times I tried to join Xiaoyou, I was rejected because “The system is busy, please try again later.” Competent websites optimize splash pages to convert users; Tencent is clearly not concerned with such trivialities. It’s a fitting illustration of the embarrassingly poor quality of Tencent’s SNS properties.

“The system is busy, please try again later.” A warm welcome to Tencent’s Xiaoyou SNS.

In addition to Tencent’s failure to expand, anecdotal evidence suggests RenRen is encroaching upon young teens, Tencent’s traditional turf.

Tencent saw the social networking trend coming from across the Pacific Ocean, but still blew its chance. Tencent had all the advantages in the world, so resources were not the issue. The problem was Tencent’s poor execution and strategy.

Most Chinese internet experts likely disagree with my assessment of Qzone as a “failure” though, or at least with the degree of disappointment. Benjamin Joffe comments, “Considering Tencent is already reaching everybody with its IM service and Qzone started off as a blogging service, its revamping into a social network does not seem that bad… I am not sure what you would measure Qzone’s success or failure against, but in terms of reach it seems fine to me.”

Read the rest of 3 Reasons Why Tencent’s Qzone, the Largest Social Network in China, is a Failure (1,157 words)

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Post tags: QQ, QQ-Campus, QQ-Xiaoyou, Qzone, Tencent

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January 25 2010

Douban Raised $10M in Series B

Douban, a symbol of web 2.0 services in China, announced its $10 million series B financing today. The new round is led by Trustbridge Partners, and co-invested by its existing investor Ceyuan Ventures, who invested in $2 million in 2006.

Douban started from a social networking sites for book lovers, movie lovers and music lovers in 2005, when hype of web 2.0 just began. When people talked about web 2.0 in China, they will talk Douban. Since its inception, Douban is always one of my most favoriate Chinese websites, and I’m also an active user of Douban. Douban’s newest major product development is the release of Douban Radio, which is an personalized online music streaming service powered by a recommend engine to tailor the music just for you. (You can check our previous reports on Douban here)

Currently, Douban’s main revenue source is online advertising, some big brands are Douban’s advertisers already. For Douban Book, it also gain revenues from affiliation with Dangdang, Amazon Joyo and other book ecommerce sites.

Congratulations to Douban and Bo Yang. I strongly believe that Douban can lead to something bigger.

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China Web Radar | Permalink | No comment | Add to del.icio.us | Follow us on Twitter| China Tech Events
Post tags: Douban, funding

January 14 2010

5 Predictions for China Social Games in 2010

(This is a guest post by Kai Lukoff. Kai Lukoff is an analyst at BloggerInsight and an editor on China Social Games. Follow Kai on Twitter @klukoff. You can find more information on China Social Game at the end of this post. )

The social game market is still in its infancy, but growing up fast. The first smash hits, Friends for Sale! Parking Wars, and Happy Farm are just over a year old in China. Here are 5 predictions for 2010:

1. Social Games Displace Web Games

Social games are reaching unprecedented demographics, including females and middle-aged users. These users are open to casual gaming, but unlikely to seek it out on 3rd party website. Social games go viral by using existing services (social networks) and trusted references (friends). As a result, social games enjoy unprecedented numbers of users. In China, Happy Farm has an estimated 23m daily active users across all platforms. On Facebook, FarmVille has blasted past 27m daily active users in only 6 months. Social games boast a superior distribution model and as in-game content also becomes more social, web games will be left in the dust.

2. Consolidation of Game Developers

The days of a few friends developing a hit from the dorm room are over. The Facebook market has already seen consolidation on a colossal scale, with huge paydays: Playfish (300m USD merger with EA), Zynga (180m USD funding), RockYou! (70m USD funding), and Playdom (43m USD funding). Production values are rising in China too, with RenRen Restaurants (copy of Playfish’s Restaurant City) and Happy Pet (copy of Playfish’s Pet Society). Developers will need more resources, serious teams and finances, to develop the next hit game.

China’s consolidation will be on a miniature scale compared to Facebook though. In fact, it has already begun: Five Minutes, developers of Happy Farm, scored 3.5m USD from Draper Fisher Jurvetson on December 1. And Rekoo, developers of Sunshine Farm, received 1.5m USD from Infinity Venture Partners. Expect more consolidation in 2010.

3. Entry of Western Game Developers

Western social game developers are knocking on the door. RockYou! launched a game on RenRen in June, 2009. PopCap Games followed up with with Bejeweled Blitz 2 on RenRen on November, 2009. China Social Games has spoken to several other players scouting the market.

The themes and mechanics of Facebook games tend to play well in China. The real challenge for foreign developers is managing relations with powerful social networks and the government.

4. Chinese Networks Open Up Their API

The games on RenRen (mostly-open API) blow away those on Kaixin001 and Qzone (closed APIs). RenRen has seen a proliferation of 3rd party developers whose are games are innovative, sticky, and popular. The other networks, especially Kaixin001, did a decent job of copying games in-house at the start. But as social games become more sophisticated and difficult to copy, their offerings look increasingly anemic.

Superior games will slowly drive users to spend more time on RenRen, at the expense of Kaixin001 and Qzone. As these networks realize that they can’t keep up with only in-house developers, they’ll open up their API. Qzone is already experimenting with licensing, starting with Five Minute’s Happy Farm). Expect this, in turn, to increase the leverage of game developers, who will demand greater than the maximum 56% revenue share RenRen currently offers. Chinese game developers are struggling to monetize, but if Kaixin001 and Qzone open up their API it’ll create more opportunities.

5. Family Friendly!

The rules are still being written, but expect social games to be harmonized in 2010. Mafia games are already gone. Happy Farmers are now picking—not stealing—crops. Expect developers, especially foreign ones, to err on the side of caution. All social games will be family friendly!

Bonus: What Will NOT Happen In 2010

1. Social Glue for the Chinese Internet!

While Facebook and Google compete to become of the social glue of the internet (via Connect features), Chinese networks are determined to defend their islands. RenRen, the closest copy of Facebook, is the best contender here, but its efforts (links with Dianping, etc.) all appear to be directed at keeping traffic on its site rather than connecting the internet.

2. Facebook Unblocked!

Dream on. But more and more Facebook games will be ported over to Chinese networks, though its unclear whether it’ll be Western developers or copycats who do it.

About The China Social Games Blog
China Social Games (@CNsocialgames) is a blog dedicated to tracking the hottest games, networks, and trends. It recently released a report for sale (590 USD) on the Top 10 Social Games in China. Though already wildly popular in China (and on Facebook), social gaming is still in its infancy, so the market is evolving, innovative, and competitive. China Social Games offers up-to-the-minute coverage. China Social Games is run by the BloggerInsight team (@BloggerInsight).

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China Web Radar | Permalink | No comment | Add to del.icio.us | Follow us on Twitter| China Tech Events
Post tags: 2010, China Social Games, prediction, social game

January 09 2010

Welcome Back, Yeeyan

Yeeyan, a popular online translation collaboration community in China, was back online in yesterday morning, after it was shut down in Nov 30, 2009 by China’s online content regulators. But its domain name changes from Yeeyan.com to Yeeyan.org.

On almost all my list about my favoriate China’s websites, you can find Yeeyan. Since it started in 2006, still a group blog at that time (see our first post on Yeeyan), I kept an eye on its developments. In 2007, Yeeyan becomes an online content collaborative translation community, users can collaboratively translation and publish foreign language articles into Chinese. The translators can also have opportunity to gain financial benefit from the articles translated by them. I think it is the best crowdsourcing website in China.

Yeeyan partnered with both foreign and Chinese media, by translating articles from foreign media into Chinese and publishing on China’s newspaper, magazine and website, it can reward its translators with real money. Yeeyan also translated and published several books by this crowdsourcing model. According to Chen Haozhi, CEO of Yeeyan, some of the translators can get RMB4000 to 6000 a month, and Yeeyan also makes break even.

But partnerships with foreign news media, such as The Guardian, Time Magazine, New York Times, also made troubles to Yeeyan. In Nov 30, Yeeyan was shut down by regulators, because it published news in its website without getting necessary licenses.

Now Yeeyan is back, but the new Yeeyan will focus more on tech, science and business, not on current affairs which might enrage regulators. You cannot find articles from those foreign news media now.
Yeeyan also introduces a pre-publish auditing system, a new translation will only be open to public after it is reviewed manually. The group feature is replaced by a new feature called Project, it also reflect the new Yeeyan tries to strengthen itself on translation collaboration functions, rather than generic social networking.

Anyway, welcome back, Yeeyan. We missed you.

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China Web Radar | Permalink | No comment | Add to del.icio.us | Follow us on Twitter| China Tech Events
Post tags: Yeeyan

August 29 2009

Sina Starts Twitter-Like Service

About ten days ago, Sina started testing its Twitter-like service, Sina Microblogging, when many other Twitter-copycats in China have been shut down by the authorities.

Like Twitter, Sina Microblogging allows users to post short messages less than 140 Chinese characters, you can follow other users to get their updates, but Sina called followers as fans. You can send SMS or MMS to update messages after you set up your mobile phone. It also support hashtag # syntax for easily tracking topics. Users can also add an image to their message. Sina even provides official url shortener too, all url will be shorten as http://sinaurl.cn.

However, for two most important feature of Twitter, i.e. @ and Retweet, the features are quite different in Sina Microblogging. Sina has a feature called reply which is similar to @, but actually totally different. Sina’s reply acually is comment feature in blogs, the reply will not show in your “tweets”, so it is a one-to-one conversation, not one-to-many conversation for Twitter’s @.

Several years ago, when Sina started its blogging service, it was a late-comer in blogging market, but it successfully invited many celebrities to start blogging in Sina’s platform, which attracted many readers and made it one of the top blogging platform in China. It is expected that Sina would adopt similar strategy for its micro-blogging service, to promote celebrities’ micro-blogging, maybe that’s why they called followers as fans.

Sina is not the first one to copy Twitter in China, but many copycats have encountered many troubles from government regulators, and Twitter was blocked for months already. That might not be a big problem for Sina, since Sina already has a strict self-censorship policies and methods.

Tencent actually has launched a Twitter-clone, Tencent Taotao.com, in 2007, but it is not very influential in the market. But some reports said Taotao has 40 million users already. Will Tencent starts to make efforts to promote Taotao after Sina enters this market?

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  3. Sina Officially Announced Its Video Sharing Service

China Web Radar | Permalink | 5 comments | Add to del.icio.us | Follow us on Twitter| China Tech Events
Post tags: Sina, Sina Microblogging, Taotao

August 05 2009

No Xiaonei Anymore, Here Comes RenRen

If I ask who are the popular social networking sites in China? I think most of you will talk about Kaixin001.com, QQ, 51.com and Xiaonei.com. However, since yesterday, there is no Xiaonei.com anymore, Joe Chen, CEO of Oak Pacific changed its name from Xiaonei.com to RenRen.com.

But why changing the already well-known Xiaonei.com brand to Renren.com (brief history of Renren below)? Some people think it is because Xiaonei means “in campus” in Chinese, which limited its users bases on university and college users. By changing its name to Renren, which means “everyone” in Chinese, can help to promote to white collar users, this market is now dominated by Kaixin001.com.

That’s why there is also rumor that Joe Chen plans to merge all three SNS sites under Oak Pacific, i.e. Xiaonei, MOP and Kaixin.com, into Renren.com. But they denied the rumor. If so, they already have Kaixin.com which compete head-to-head with Kaixin001.com on white collar users, why bother to change the name of Xiaonei. After Xiaonei changed name and strategy, will there be another site who can dominate the university and college users SNS market? Will it be QQ Xiaoyou?

Renren.com actually is not a new site, which was founded in 1999 and was a quite high-profile website during the Internet Bubble, it went bankruptcy in 2001. Joe Chen bought Renren.com domain name in 2005. Joe Chen relaunched RenRen.com as an online classified site in 2006, but it was shut down again in 2007.

Related posts:

  1. QQ To Compete With Xiaonei.com
  2. Xiaonei.com Announced its Open Developer Platform
  3. Kaixin001 Has Ads on Apps

China Web Radar | Permalink | 2 comments | Add to del.icio.us | Follow us on Twitter| China Tech Events
Post tags: Kaixin001, Mop, Oak-Pacific, Renren, Xiaonei

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