Tag Archives: News Corporation

Will Facebook be more successful in China than MySpace?

MySpace global is a failure amidst a revolving door of management (see analysis) and is currently on the auction block with Tencent among the suitors. But long before the dismal MySpace global failure there was the dismal MySpace China failure. As the big rumor is that Facebook has partnered with Baidu to enter China, let’s take a retrospective look.

MySpace.cn launched to fanfare in April 2007, with claims that it would be “independent,” “localized,” and hence “different” from the litany of foreign internet failures in China. The Manila Bulletin reports:

MySpace China introduced itself as a “locally owned, operated and managed company” in which News Corp-owned MySpace Inc was only one among several investors. [Note: Other blue-chip investors included IDG-Accel and China Broadband Capital Partners].

“Our team here will have the sole right to decide the operation model, the technology platform as well as the product strategy,” said MySpace China CEO Luo Chuan, a former Microsoft executive [ex-CEO of MSN China].

“It’s very unlike the other multinationals you might have heard about or seen in the Chinese market.”

Of course this was all false: MySpace.cn was neither independent, localized, or different. The writing was on the wall regarding its supposed ‘independence’ from the start: MySpace founders Chris DeWolfe and Tom Anderson as well as Murdoch’s wife, Wendy Deng, all had seats on the board of MySpace China.

Mark Zuckerberg and Priscilla Chan should not follow in the footsteps of this couple

Rupert Murdoch, whose News Corp purchased MySpace for $580 million in 2005, said, ”We have to make MySpace a very Chinese site, I have sent my wife across there because she understands the language.” Somehow I doubt Mark Zuckerberg will send his girlfriend Priscilla Chan ‘across there’ to run Facebook China because she understands the language.

Instead, MySpace.cn ran into a host of fierce local SNS competitors and was never able to secure a solid base of users. Unlike its competitors, MySpace.cn was unable to draw on a pre-existing user base (Tencent) and failed to lock down a specific demographic (RenRen: university students, 51.com: rural users, or Douban: urban hipsters). [See overview of China’s top 4 social networks]

In April 2010 MySpace.cn’s CEO shared in an interview with Netease Tech that after three years of trials MySpace.cn would revert back from a social network to an “internet music platform.” But China Music Radar writes, “Did Myspace make any impact at all in China? Not in our experience. We never used it; we never encountered an artist that did. Since October, the site has been completely unusable here in China.”

Nor were deep pockets an advantage. Local competitors like Tencent’s QZone, OPI’s RenRen (investor: Softbank), and 51.com (investors: Giant Interactive and Sequoia) all had big backers and finance.

Joe Chen, Chairman of OPI (parent group of RenRen), scoffed at MySpace’s localization:

If you want to spend time on a site that’s about you, it’s harder to pull that off with a U.S. brand. It just doesn’t feel authentic… [in China] SNS is entirely a local game… You tell a typical kid in China who has never heard about MySpace and ask the person to spell it, 90% of the time the kid has no clue.

MySpace China quickly found itself far behind competitors: in July 2008 it had four million registered users and was hoping for 10 million by the end of the year. But Tencent’s Qzone claimed 105 million and 51.com 95 million.

And in October 2008, in the first sign of major distress, MySpace China CEO Luo Chuan resigned. Mobinode advanced and VentureBeat supported this account of Luo’s departure:

Our understanding on this is that Luo wants to run the Myspace on his own way (on Myspace.cn), but his boss believe Myspace China should be a Chinese version of Myspace.com and follow its global strategy. So, if the rumor is confirmed, it means Myspace China’s Independence fails.

 

Murdoch’s wife Wendy Deng was subsequently sent in as MySpace China’s Chief Strategist, but that didn’t go so well. In December 2010, MySpace.cn laid off 2/3s of its staff and CEO Wei Lai (魏来) left, leaving 15 sorry survivors to collect paychecks for playing Happy Farm on Kaixin001 focus on the mobile market.

Murdoch, of course, had a series of previous failures with his media ventures in China, in which I can’t decide whether his ignorance or arrogance was a bigger factor.

The ways in which MySpace.cn was independent and localized? It was independent in that China users could not connect to international users, removing a huge selling point from the ‘global network.’ And it was localized in that it censored content, a base requirement for any social network in China. Facebook will confront both of these quandaries if it enters China.

Fortunately, Facebook already has one part of the playbook down: don’t copy MySpace. Still, China watcher Bill Bishop cautions:

Full story below

http://techrice.com/2011/04/10/myspaces-sorry-failure-in-china-or-what-facebook-should-not-do/