Oak Pacific Interactive (OPI) owner of Xiaonei.com, one of the leading Web 2.0 social networking services in China, announced March 30th that Japanese Softbank Corp. is leading an investment totaling US$430 million for 35% of Xiaonei.com. The investment funds will be used to further build the leadership and growth needs of Xiaonei.com, one of the leading social networking sites in China.
Xiaonei.com is a full-featured community and social networking destination that provides an "immersive experience" for its users. Features of the site include multi player gaming and wireless value-added services for mobile users. In the college market, Xiaonei.com has a dominating market share. OPI also owns and operates Mop.com, the largest entertainment portal, and Donews.com, one of the leading IT blogging services in China.
Facbeook Rip Off or ChineseWay
Oak Pacific Interactive acquired Xiaonei.com in October 2006. Xionei, positioned like Facebook visually looks like a clone of Facebook and is thought to have a 90% share of the active on line students in China. It was started by Tsinghua university graduate Wang Xing. Much like Facebook's Ivy League heritage Xiaonei focused on China's top schools first, realizing that widespread adoption would follow. They even received angel funding from investors that included an ex-CTO of Amazon.com.
Xiaonei.com’s features include include multi player gaming and wireless services for mobile users. Xiaonei had “22 million registered users and 12.7 million daily users by March,” reports Communication Information. Xiaonei had 280 million page views in March, according to the report.
Mobile, Baseball, Social Networks
As part of the funding conditions Oak Pacific relayed that Masayoshi Son will join its Board of Directors. Masayoshi Son is the President and CEO of SOFTBANK Corp. Softbank is Japan's leading Internet and telecom services company, and Softbank Mobile is Japan's number three mobile phone carrier, after buying Vodafone KK's operations two years ago. SoftBank's revenue doubled this year to $23 billion, thanks to a boost from the new mobile phone unit. SoftBank also runs Yahoo Japan, the country's top Internet site, as well as the baseball team Fukuoka Hawks.
Joseph Chen, Chairman and CEO of Oak Pacific, said, “We are honored to welcome SOFTBANK as an investor and to have Mr. Son join our Board of Directors. SOFTBANK’s commitment reinforces our mission to develop world-class, scalable businesses that leverage the tremendous growth potential of consumer internet market China. We will use this capital to further our aggressive growth strategy for Xiaonei.com and ensure that it sustains its leadership and innovative spirit for many years to come.”
Existing investors of OPI include General Atlantic, DCM, Technology Crossover Ventures, Accel Partners, and Legend Capital. Note: Accel Partners is also an investor in Facebook--as well as Hook Mobile.
As for Facebook entering China, as I relayed in my earlier post "Facebook's Hong Kong Connection vs QQ" I think the western press is getting it wrong on Facebook's Chinese opportunity. Presently it isn't even in China, it just has a BIG Hong Kong investor. Reflecting the Chinese Way, to date most Chinese internet companies are home grown, from Alibaba, to 51Job, Baidu, Ctrip and Sina. I'm absent exceptions but I don't think there's much to worry about a Lao wai, non-Chinese born social networking company taking a big chunk of the Chinese social networking services market at this stage. Just as Haier is making incremental steps in the US market, Facebook should consider the China market a long tail effort. At minimum It needs to get some experienced China hands on board before the opinion beacons of the western press coronate it King of the SNS providers.