Nineyou
Shanghai based online game company, Nineyou information Technology, found teenagers want to state trendy no matter in the real world or the virtual one. The company’s top game, Audition, which at the peak hours has more than 800,000 people playing together, thrived on players dressing up their characters online.
More than half of the free-to-play dancing game players are girls, the highest proportion among all Chinese online games, mainly the age of 14-26, said Jamsper Wu, corporate management director of Nineyou. Total registered users amount to 230 million, even more than the official China internet popular of 130 million.
High score is not as important as cool dresses, for players of China’s most popular casual game. Most of items sold in Audition, hair style, blouses, skirts, boots, etc., have no function at all, beside the look. They are sold from several yuan to several hundred yuan a piece – for a week or a month of use.
“The items get expired in a week or a month time. Just like real fashion, you want to change to a different style from time to time,” said Mr Wu. And if you are a little short of cash, “why don’t you ask your boy friend to send it to you,” added Mr Wu.
Boys meet girls - that is what the game is really about. Girls dress up to stand out among each other. Boys come up with gifts to impress their girls. Not too unfamiliar even for the generation who have not touch any online game before.
The only different is everything is happening much faster in the online world. “Would you want to marry me?” said one boy-looking character to another girl-looking one, just after they exchanged “hi”. Sure, there are “wedding pass” on sale in Audition, as well.
Audition is not the first game to sell virtual fashions. So is Nineyou’s first major hit, O2jam, a music game which had 200,000 peak concurrent gamers when launched in April 2005. Although O2jam created a buzz among youngsters, it failed to be real revenue driver. “The rhythm is too fast. Nobody has time to check out what the other players are wearing in the game,” said Mr Wu.
When the company launch Audition in May 2005, it slower the pace, so that boys and girls have time to check up each others and socialised online. Revenue from items sales in Audition shoot up and has been the chief revenue source of the company ever since.
“Audition is still growing fast at the moment. The first quarter revenue is double from the same period last year,” said Mr Wu.
The company also start to develop online advertising. They have not been able to attract Gucci or Channel yet, but some local fashion chains have had co-branding promotion with them, mostly in form of in game items, said Mr Wu. For example, when a person buys a dress in the shop, they will get some game points to allow them to own a virtual dress of the particular brand in the game. Pespi and others consumer products companies targeting the youths have had lines of fashion under their brand in Audition, too.
Audition and O2jam are licensed from Korean game companies T3 Entertainment and O2media respectively. Nineyou developed another dancing game in-house, Super Dancer, but it failed to be a real hit – showing how unpredictable game players’ sentiments are.
“The risk of Nineyou would be that it depends on only one game, Audition. What if the game is no long popular?” said Fu Xinghua, analyst of Beijing based market research firm Analysys.
Analysys estimated Nineyou’s revenue account for 6.86 percent of the total China online game market in the fourth quarter last year. That is more than half of the revenue of The9, China’s third largest online game operator, which has about 13.3 percent, according to Analysys. The9’s fourth quarter revenue reached 282.7 million yuan, according to its financial statement.
Nineyou was founded by Wang Zijie, who has been a deputy supervisor of research institute of Japan game company Konami Corporation, as well as it supervisor of overseas business in its arcade machine division, from 1993 to 1998. Nineyou currently has 900 staff, of which 400 are in research and development.
Book draft - China Internet
China internet sector started by imitating successful companies overseas, specially the U.S. ones. Many of leading internet companies in China got their original ideas and capital from the U.S. However, a direct copy of the U.S. model usually failed miserably in China. After all, the differences between the two countries are vast – from people’s living standard, their day-to-day life to the business environment.
That is why Google - the number one search engine, eBay - the leading online auctioneer, Yahoo - the number one online portal, Expedia – the largest online travel site, etc., all fail to dominate the China market. On the other hand, those started with their ideas, but adapted to the local market, thrived.
Sina and Sohu, China’s leading online portals, build their dominance by posting news online – they employed hundreds of editors painstakingly copy and paste pieces of news from all the leading newspaper and magazines in China to their sites. Very different from the Yahoo China site, which was largely a replicated of the Yahoo U.S. operation.
Ctrip, China’s leading online travel site, send people to distribute booklets, with hotel room prices and a telephone number for reservation, in airports and railway stations, after finding out it was very difficult to get people in China to book hotel rooms over the internet. Most of the reservations Ctrip got are still coming from its call centres.
Stories like those go on and on. The myths of better brand name and deeper pocket of the U.S. internet giants was also misleading. They are well known in the U.S., but not in China. Believe it or not, there are many people in China who cannot spell Google. Their headquarters are rich with cash, but their China subsidiaries are not. In contrast, first class China internet companies have no trouble attracting the required capital, either from direct investment or through listings in the stock exchanges.
This partly explained how eBay lost its dominance to Taobao, a late comer which swiftly became China’s most popular online auction site, and Google lost its throne to Baidu, also a late comer which eventually became the country’s most popular search engine.
This book seeks to help readers to understand the multiple facets of China internet sector. So, one day, they can make better decisions either as investors, competitors or participants of these companies.
China is now the world second largest internet market, after the U.S. It has more than 130 million users, but that is only about 10 percent of its population. There are certainly more to come in the next decade or so. China internet is a fertile land for entrepreneurs, both local and foreign.
There are roles for foreigners to play. Many foreigners worked in the early ventures. And they still do. A friend of mine, a Californian, is working on his startup in China. Another I knew is working on his second venture, after floating the first one on Nasdaq.
Moreover, the sector is easier to understand than others in China, where government policies still affect most business decisions. By and large, business 101 applies to this sector. The most successful businessmen in this sector are not sons or daughters of high-ranking government officials, but hungry entrepreneurs ready to risk it all. There is no denying frauds are everywhere in China, which is still an emerging market. But to a large extent, companies in this sector win by providing most desirable products or services to their customers.
In the first part of the book, I am going to give details about the leading players in the China internet sector. And in the second half, I am going to talk about certain topic crucial to understand the sector, including its darker side.
Part One
-----------
Chapter 1: Sina, Sohu and Yahoo China – the portal war
Internet boom of the U.S. in the late 90s also marked the beginning with China Internet industry. Among the first are Sina and Sohu. One founded by Beijing local Yan Wang, another by MIT graduated Charles Zhang. Both were copying what was hottest then – Yahoo. Yahoo, at the same time, though it can branch into China, via its Taiwan subsidiary, Ki
Chapter 2: Ctrip and eLong (controlled by Expedia) – the travel sites
Investment banker Neil Shen and James L
Chapter 3: Alibaba – online marketplaces for small businesses
Chapter 4: Tencent – the MSN of China
Chapter 5: Tom Online, Kongzhong, Hurray and Linktone – the crowded wireless valued added services sector
Chapter 6: Netease, Shanda and the9 – the online game Trio
Chapter 7: 51job and ChinaHR (controlled by Monster.com) – the online recruiters
Chapter 8: Taobao and eBay – the fight for online auction market champion
Chapter 9: Baidu and Google China – the search for searching engine king
Part Two
-----------
Chapter 10: Who are the Chinese internet users?
Chapter 11: Why the U.S. giants fell?
Chapter 12: Don’t limit yourself with just the online world. Go offline if the pasture is greener.
Chapter 13: Frauds – how three stupid acquisitions Monstermob made in China brought down the once high-flyer?
Chapter 14: Sex sells – a significant part of China internet traffic is driven by soft porn
That is why Google - the number one search engine, eBay - the leading online auctioneer, Yahoo - the number one online portal, Expedia – the largest online travel site, etc., all fail to dominate the China market. On the other hand, those started with their ideas, but adapted to the local market, thrived.
Sina and Sohu, China’s leading online portals, build their dominance by posting news online – they employed hundreds of editors painstakingly copy and paste pieces of news from all the leading newspaper and magazines in China to their sites. Very different from the Yahoo China site, which was largely a replicated of the Yahoo U.S. operation.
Ctrip, China’s leading online travel site, send people to distribute booklets, with hotel room prices and a telephone number for reservation, in airports and railway stations, after finding out it was very difficult to get people in China to book hotel rooms over the internet. Most of the reservations Ctrip got are still coming from its call centres.
Stories like those go on and on. The myths of better brand name and deeper pocket of the U.S. internet giants was also misleading. They are well known in the U.S., but not in China. Believe it or not, there are many people in China who cannot spell Google. Their headquarters are rich with cash, but their China subsidiaries are not. In contrast, first class China internet companies have no trouble attracting the required capital, either from direct investment or through listings in the stock exchanges.
This partly explained how eBay lost its dominance to Taobao, a late comer which swiftly became China’s most popular online auction site, and Google lost its throne to Baidu, also a late comer which eventually became the country’s most popular search engine.
This book seeks to help readers to understand the multiple facets of China internet sector. So, one day, they can make better decisions either as investors, competitors or participants of these companies.
China is now the world second largest internet market, after the U.S. It has more than 130 million users, but that is only about 10 percent of its population. There are certainly more to come in the next decade or so. China internet is a fertile land for entrepreneurs, both local and foreign.
There are roles for foreigners to play. Many foreigners worked in the early ventures. And they still do. A friend of mine, a Californian, is working on his startup in China. Another I knew is working on his second venture, after floating the first one on Nasdaq.
Moreover, the sector is easier to understand than others in China, where government policies still affect most business decisions. By and large, business 101 applies to this sector. The most successful businessmen in this sector are not sons or daughters of high-ranking government officials, but hungry entrepreneurs ready to risk it all. There is no denying frauds are everywhere in China, which is still an emerging market. But to a large extent, companies in this sector win by providing most desirable products or services to their customers.
In the first part of the book, I am going to give details about the leading players in the China internet sector. And in the second half, I am going to talk about certain topic crucial to understand the sector, including its darker side.
Part One
-----------
Chapter 1: Sina, Sohu and Yahoo China – the portal war
Internet boom of the U.S. in the late 90s also marked the beginning with China Internet industry. Among the first are Sina and Sohu. One founded by Beijing local Yan Wang, another by MIT graduated Charles Zhang. Both were copying what was hottest then – Yahoo. Yahoo, at the same time, though it can branch into China, via its Taiwan subsidiary, Ki
Chapter 2: Ctrip and eLong (controlled by Expedia) – the travel sites
Investment banker Neil Shen and James L
Chapter 3: Alibaba – online marketplaces for small businesses
Chapter 4: Tencent – the MSN of China
Chapter 5: Tom Online, Kongzhong, Hurray and Linktone – the crowded wireless valued added services sector
Chapter 6: Netease, Shanda and the9 – the online game Trio
Chapter 7: 51job and ChinaHR (controlled by Monster.com) – the online recruiters
Chapter 8: Taobao and eBay – the fight for online auction market champion
Chapter 9: Baidu and Google China – the search for searching engine king
Part Two
-----------
Chapter 10: Who are the Chinese internet users?
Chapter 11: Why the U.S. giants fell?
Chapter 12: Don’t limit yourself with just the online world. Go offline if the pasture is greener.
Chapter 13: Frauds – how three stupid acquisitions Monstermob made in China brought down the once high-flyer?
Chapter 14: Sex sells – a significant part of China internet traffic is driven by soft porn
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