Quzhai Enters Deadpool

Written by Luyi Chen on May 4, 2008
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QuzhaiBeijing based StumbleUpon like service Quzhai has sent out an email to all its users that the service will be shut down very soon.

Quzhai learns users’ interest by asking them to click like or dislike button on its toolbar. Then it will show more webpages to the users according to their interests. Basically it’s a social recommendation service.

To attract more entry level users, Quzhai focused its content on entertainment news. A trick I have learned from the founder is that readers of this kind of news have no strong preference. If they like one of them, they will like them all.

Quzhai is a student startup which has received RMB 1 million from business plan contest. We first mentioned the service in last June.

What’s The Meaning of SoftBank’s Investment in Oak Pacific?

Written by Tangos on May 3, 2008
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Lots of discussion on the news that Masayoshi Son’s Softbank will lead an investment totaling $430 million for approximately 35% stake of Oak Pacific Interactive (OPI), whose main asset currently is Xiaonei.com, a Facebook clone, can be found on the blogosphere already, such as on Techcrunch, VentureBeat and DigitalWatch.

Honestly, I was surprised by the news when I first heard it on Twitter, though there was rumor in early this year already. What does the investment mean to China’s web sector?

At first, what will happen to Xiaonei.com? According to Communication Information, Xiaonei had 22 million registered users and 12.7 million daily users by March. With enough money, they will enhance the promotion to expand into non-student market, bringing more fierce competition for some small startups as Hainei.com and Yiqi.com. Xiaonei will likely launch a developer platform as Facebook did. Most important, the money will allow Xiaonei to have much more time to find its viable business model.

Secondly, Joseph Chen, CEO of OPI, having more money on hand, will possibly make more acquisitions in China’s web sector. As Benjamin Joffe said “OPI’s main success was to raise money, buy Xiaonei with it, then raise more money”. OPI has a history of acquiring promising online assets and trying to package together to have a better valuation, however, OPI also has a reputation of bad management of acquired assets, such as Donews, UUme and even MOP. Benjamin Joffe reviewed part of its history:

In March 2006, OPI raises 48 million USD apparently mostly thanks to the pageviews they managed to gather on mop.com, a sort of glorified BBS put under they managed to list under the holy “social networking” umbrella word. Its main attraction is the “big hodgepodge” which is not unlike Japan’s 2channel.

In October, they buy Xiaonei with part of this money. Not too long later, they fire most of the staff from the video service UUme, another of their acquisitions back in 2005, at which time they were planning a NASDAQ listing in 2006.

In November 2006, James Liu, Co-COO of OPI presents the company as China’s “YouTube + Facebook + MySpace” combined.

Thirdly, the investment may help SNS sector regain attentions of venture capitalists, esp. when Kaiser Kuo said there is rumor on “a very large investment in 51.com, a social network that’s immensely popular in lower-tier Chinese cities”.

Since late last year, we witnessed some promising development in China’s social networking sector, including the launch of new Facebook wannabes - Hainei.com and Yiqi.com, the appearance of new social networks with some innovative features - CityIn.com, the release of free social networking tools for you to build your own Facebook - Ucenter Home by Comesenz. The big investment news will inspire venture capitalist to pay more attention on China’s social networking sector, that’s good news for social networking startups. And thanks to the availability of convenient social networking development tool, such as Ucenter Home, I believe that there will be many facebook-like small social networks in China in short time.

At last, what’s the effects of the investment on “copy to China” model? It may further strengthen the idea of “copy to China”(C2C), either for investors and startups. Most investors are cautious on innovative ideas from China, and of course, copying proved model to China will make them more comfortable. For startups, they might think copy is a easy short-cut to success as what Xiaonei did and proved by Softbank’s investment. Even though C2C is not as simple as it looks like, it is possible that more startups will hope they can find quick money from “copy to China”.

Chinese Website Qiushibaike Sells Its Ads in Taobao

Written by Tangos on April 30, 2008
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QiushiQiushibaike.com, an interesting website that let users to share their embarrassed stories online, is trying to sell its banner ads and feed ads in Chinese C2C website Taobao.com. (via Webleon)

Till now, Qiushibaike has over 12000 stories shared by users. According to description on Taobao, Qiushibaoke has over 20,000 daily visits, not sure it means daily unique users or daily pageviews, and over 220k feed subscribers (by Feedsky’s statistics). Qiushibaike would like to sell a banner ad on website and a text link ad on feed for six months for RMB 10,000 yuan, at first the starting price is 50,000 yuan, then lowered to 10,000 yuan.

When Chinese websites want to monetize its traffic by online advertising, what can they do? Google Adsense for Chinese, which Qiushibaike is using now, does not generate good income for Chinese websites; most of the online ads unions, which are main revenue sources for many Chinese individual webmasters, sell ads with seductive images and text titles which you may not want to use; Alimama, which is an online ads exchange owned by Alibaba, still struggles to get more quality advertisers, though it can reach an average of 70 million people per day; and in China, still no way to sell feed ads.

The problem for longtail online ads in China is the no. of quality advertiser in the market is still very limited due to various reasons, instead of lack of ads service provider or platform. So even Qiushibaike.com try to auction the ads on Taobao, I doubt it can make it.

CHINICT: Rising Star Awards and CHINICT Proteges Panel

Written by Tangos on April 30, 2008
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CHINICT

CHINICT, an event focused on the promising high tech companies from China and the West, will take place for the 3rd time in Beijing, on May 22nd and 23rd 2008. The most promising IT companies from China and the West will present to a high profile audience composed of decision makers from major IT corporations, leading Venture Capital firms and political leaders, their activities and development plans in China.

As in previous two years, CHINICT will held a Rising Star Award for the the most innovative and fastest-growing IT cocmpanies. The award will be judged by an expert committee composed of leading tech investors, CEOs and executives upon 4 criteria:

If you are interested in it, you can send your applications with a short PowerPoint presentation (10 slides maximum) in English to Mr. Xavier Nemo (xavier@chinict.org).

For the first time this year, beyond presenting “CHINICT Rising Stars” (i.e. mid to late stage investment opportunities), CHINICT will also present through a panel session called “CHINICT Proteges”, early stage / pre-series A investment opportunities. The “CHINICT Proteges Panel” showcases outstanding early stage investment opportunities. It is a private session featuring only about 10 startups and 20 investors.

These early stage companies will present in front of a jury composed of top-tier investors (both VCs and angels) investing in Chinese early stage companies. Beyond potentially raising money from investors, these companies will also receive CHINICT Award, and with outstanding media coverage from all over the world.

If your company is interested in being featured as a “CHINICT Protege” during the event, please send the Powerpoint presentation for investors in English (10 slides maximum) by May 7th at info@chinict.org.
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Tudou Announced $57 Million Financing

Written by Tangos on April 29, 2008
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It has been rumored for quite a long time, Tudou, the largest video sharing website in China, finally officially announced its $57 million series D financing at a $150 million valuation, which is the largest round of funding ever for a Chinese Internet company, and make Tudou’s total fund raising to $85 million over the past 3 years. Previously, Tudou raised $500k, $8.5 million and $19 million respectively.

Tudou said in its press release:

We were very happy that our existing investors decided to double-down on us by re-investing in this round(note by CWR: Tudou’s existing investors include IDGVC, GGV, Capital Today, General Catalyst Partners, KTB and JAFCO Asia, most of the news mentioned IDGVC, GGV and General Catalyst in this round), and we were also very happy to welcome a couple of new investors, family and venture funds from Singapore and the US who prefer to remain unnamed for now.

In last December, we suggested that Tudou would need a new round of financing, considering high burnrate of video business and fierce competition in the market. Now, it is great that Tudou can successfully close this round when facing uncertainty in regulation environment. Now Tudou is ahead of competitors again, and it “actually turned down offers of even higher funding”, because “because this industry is not about raising more money”.

Tudou also disclosed its stats in press release, “over 100 million clip views & page views to over 10 million unique users every day, and over 60 million unique users every month“. But recently Youku and Tudou seemed to fight with each other on traffic, because iResearch rank Youku as the largest video sharing website in China.(tip by Bill Bishop on Twitter) That’s a big problem of China’s web industry, we don’t have a reliable third-party data on web traffic.

Anyway, congrats to Tudou, and Happy 3rd Birthday! If you like Tudou, you need to check out is first Tudou Film Festival.

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