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Posts Tagged ‘co:Xiaonei’


Report: YouTube still trying to figure out how to make money
— Lots of people have been wondering if the online video site has somehow figured out how to make big money from its huge amounts of web traffic. The answer, according to a Wall Street Journal article (sub required) is, as we’ve been hearing: Nothing mind-blowing is happening yet. Two sources say YouTube will make around $200 million this year, which is short of Google’s hopes. Watch the video to learn more about future monetization plans. However, the article includes some other interesting information about monetization plans. Like the fact that the company is looking to introduce user-hated pre-roll and post-roll ads that run before and after videos.

Mass. governor signs onto ambitious clean energy bill
— Among other things, homeowners and business will be able to rent solar panels from utility companies to avoid paying high purchase costs, as well as sell excess energy from the panels and wind turbines.

Vivaty’s virtual world launches in public betaThe company lets social network and instant mssage users go into three dimensional virtual rooms and chat, and do things like choose the room’s decor — decor that can include their photos and other info from social networks. Google also launched a for-now-less-complete 3D chat service today, called Lively, that aims to do much of the same. Maybe, as Allen Stern at Centernetworks says, Vivaty can out-innovate Google on the 3D IM chat room market.

Ocean fertilizer startup Planktos is back, “with science”
— The company wanted to fertilize every ocean with iron to produce phytoplankton blooms and there by reduce carbon emissions. We’ve previously mentioned its re-opening; Earth2Tech has more details but wasn’t impressed with many aspects of the company’s return, including its new name, Planktos Science.


mio knight rider gps from knight rider online on Vimeo.
The Knight Rider GPS system, by Mio, now has the voice of the robot car, KITT, inside
— At some point when Knight Rider was a popular television show, somebody must have predicted that one day everyone would have a car that could give them directions, just like KITT. The show’s still-active fan site, Knight Rider Online, was suitably given the KITT-voice scoop. See video for more.

Rosetta Stone sues smaller competitor for infringing on its search results– The smaller competitor, Rocket Dog Languages, allegedly bought Google search ads that negatively described the company. The Wall Street Journal has more (sub required).

Make’n Movies launches movie script idea review site
— Submit up 300-500 words, post it on the site’s database, and see what other people think.

Xiaonei, the Facebook clone of China, launches its own developer platform — Built from scratch, not using the OpenSocial platform standard nor Facebook’s licensable platform, the Xiaonei “Open Platform” will compete against the planned platform of rival Chinese network 51.com. Silicon Valley venture firm DCM is creating a fund to support third party developers on the platform, similar to the fund created by Accel, the Founders Fund and Facebook itself for Facebook’s platform.

MyYahoo launches developer platform — Everyone likes to launch developer platforms these days, including Yahoo, which now has one for its start page web service, MyYahoo. ReadWriteWeb has a good review of it, here.

Aircell, aviation broadband technology company, closes third phase of $265 million financing — The company promises to offer mobile internet and phone access on planes, as you can tell from this picture on its web site.

Shareholders approve $18.9 billion Activition-Vivendi Games merger — The combined entity is now the world’s largest gaming company. Gamespot has more.

MIT researchers announce nanoscale lithographic technology, to create more advanced chips
— The results promise improvements in a wide ranges of chips from those used in computer memory systems, to integrated circuits, to solar cells and other devices. The report here.

updated three times

Xiaonei, the company that likes to call itself the “Facebook of China” has raised a whopping $430 million from financial backers, VentureBeat has learned from the company’s investors.

The backing gives it a larger financial warchest than Facebook itself, and sets the scene for a showdown with the American company. Facebook has just started to get serious about entering the huge, fast-growing Chinese market.

The backing of Xiaonei could be a statement that the company intends to fend off China from Facebook’s advances. Xiaonei’s site sports the soothing blue border colors almost identical to Facebook’s; its thus not entirely surprising that Xiaonei would also copy Facebook’s ambitious fundraising strategy.

Recently, Facebook took $100 million (in two tranches) from Hong Kong business mogul Li Ka-Shing, in what is widely considered a strategic move to get help to enter that market. Facebook hasn’t entered China yet. But Ka-Shing’s company, Hutchison Whampoa Ltd, runs everything from major port facilities to mobile, location-based 3G services in China and other countries — all of which could be attractive to Facebook in China’s vibrant mobile market.

Xiaonei is owned by Oak Pacific Interactive (OPI), a holding company with a number of online communities.

The lead investor in this latest round is SOFTBANK Corp.

The huge investment in OPI translates into about 35 percent of the company, according to its investors, meaning the overall company is now worth more than $1 billion on paper. But that’s still far less than Facebook’s value — which is $15 billion, at least based on the value Microsoft gave it when the giant backed Facebook last year.

Facebook has raised $378 million in total over several rounds, including from venture firm Accel Partners, which has also invested in OPI.

While the investment was made into OPI, the money will mainly be used to helping expand Xiaonei.com, the company said. Xiaonei is China’s largest social-networking site. Two other groups, SBI and JOHO Capital, participated in the funding.

Xiaonei.com’s features include include multiplayer gaming and wireless services for mobile users. In the college market, Xiaonei.com claims a dominant market share, but hasn’t released any specific user data [update: Xiaonei had "22 million registered users and 12.7 million daily users by March," reports Communication Information, cited via Pacific Epoch. Xiaonei had 280 million page views in March, according to the report. Thanks to Christian, from comments.]

It’s true, though, that in China, there are few Facebook-like sites. Most social sites are like MySpace, where people are freer to use false identities. OPI also owns and operates Mop.com, the largest entertainment portal, and Donews.com, one of the leading IT blogging services in China.

Oak Pacific also announced that Masayoshi Son, chief executive of SOFTBANK Corp. will join the board.

Existing investors of OPI include General Atlantic, DCM, Technology Crossover Ventures, and Legend Capital. OPI had already raised $48 million from those investors two years ago.

Update: I just talked with David Chao, a partner at venture firm DCM and early investor in OPI, and one of its six board members. When I asked him about the Facebook clone-like blue color, Chao said he thinks the blue “looks like IBM to me.” He added that most sites these days are either blue, green or orange.

Chao was on the board two years ago when it decided to acquire Xiaonei, at the time a small startup. OPI invested heavily into the company, to make it a Facebook-like site. When combined with the traffic of OPI’s other property, Mop (which is more like a MySpace), they make up China’s fourth most visited site in China.

Notably, Chao said the company is cash flow-positive, meaning it didn’t really need to raise money. But Chao said that, after some debate, the company decided to “put the pedal to the metal, and really dominate the market,” he said.

As for Facebook, Chao said he doesn’t see the companies competing closely short-term, because Facebook isn’t even present in China. He noted most strong Chinese companies are home grown, from Alibaba, to 51Job, Baidu, Ctrip and Sina. “There might be an exception, but history tells us there’s not going to be too much to worry about an outside, non-Chinese born company taking a big chunk of the Chinese market.”

Update II: Reuters and WSJ are reporting the investment was only $96 million, but they seem to have gotten it wrong. There was also a reference to warrants, which is also wrong. Here’s what I think happened: They must have taken an Nikkei article about the investment (which referred to yen) and converted to dollars mistakenly. The Nikkei article refers the company’s draw of $100 million, as the first tranche of the total round. But the $100 million was assumed a 100 yen rate - so it ended up as 100 oku yen in the Nikkei article then it got recalculated at 105 yen to a dollar and ended up with 96 million. In the same article it clearly states total round will be 400 mil (oku) - so it got converted twice wrongly.

ソフトバンク、中国ネット大手を傘下に――最大市場に攻勢

ソフトバンクは中国のインターネット大手、オーク・パシフィック・インタラクティブ(OPI、北京市)を傘下に収めることで同社と合意した。約400億円で株式の40%を取得、経営権を握る。急成長する中国ネット市場で携帯電話経由の情報提供など新サービスの拠点とする。中国のネット人口は今年、22000万人超と米国を抜き世界最大に浮上する。国内大手のミクシィや米グーグルなど米国勢も事業展開を加速しており、巨大市場を巡る攻防が激化する。

ソフトバンクはOPI株式の約14%を約100億円で取得。20数%分の新株予約権も得た。最終的に総額400億円を投じて出資比率を約40%に高める。同社創業者のジョー・チェン最高経営責任者(CEO)を上回る筆頭株主となり、孫正義ソフトバンク社長は取締役に就任する見通し。

[430/日本経済新聞 朝刊]

Update III. Furthermore, there were no warrants, as discussed by some sources. Next, the amount discussed in Nikkei article was $400 million, but that’s just the Softbank portion. It didn’t count the $30 million contributed by Joho and SBI.

Finally, there are no milestones - the pulling down of the first $100 million (instead of the full amount of $430M) is just cash timing that is best for both sides - nothing to read between the lines.

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