One of the world's least known social networks could go public prior to Facebook, or even LinkedIn or Twitter - and in the most unlikely country of China. Six year-old Renren - often referred to as the Chinese Facebook due its the many similarities is one of the major default social networks in its country of origin - as Facebook has been blocked by the "Great Fire Wall" since 2009.
Founded in 2005 by graduates of Beijing’s prestigious Tsinghua University, the network was originally called Xiaonei, meaning "on-campus network." In 2009, the name was changed to Renren, “ren” being Mandarin for people, and thus implying a network open to all. Although Renren users are still generally college-age or younger, the network has undergone exponential growth and now reportedly hosts 160 million users.
Ironically, Renren's rumored initial public offering will reportedly take place in the United States later this year, according to the Financial Times. The company plans to raise about $500 million in an offering managed by Deutsche Bank, Morgan Stanley and Credit Suisse.
Beating Facebook to the punch, Renren could 'virtually' become the odds-on-favorite for investors seeking to buy into the social media space. Similarly, in the absence of Twitter being listed, investors are now buying shares in Sina, Tencent of Sohu, the Chinese portals that all operate microblog services.
Renren's current valuation is unknown, as the its financial data is not published. With a $500 million IPO, it is hard to say what value the company will appraised at after the issue is floated, but some have indicated a $2-3 billion market capitalization.
Fast Company recently reported that Renren has been far more aggressive than its Western counterpart. As"Happy Kungfu School" social game successful as Mark Zuckerberg and Facebook have been in advertising and social gaming, Renren is pushing harder with revenues growing more than 100 percent over its 2009's tallies.
According to Kai Lukoff, co-founder and editor of TechRice, Renren is "strong when it comes to monetization." Dissimilar to Facebook, where fan pages are free to anyone, brand campaigns on RenRen are sold to companies at high prices. Starting at 600,000 yuan (about $90,000) Renren’s fan pages are like mini-sites.
Also, by Facebook being blocked in a country of 457 million reported Internet users, Renren has free reign to continue to scale faster not only in its country but throughout the South East Asia region. And while a Chinese social network is not exempt from censorship, they are more adept at dealing with the Beijing bureaucracy and believe that cooperating with state censors is the cost of doing business.
In the graphic novel satire, "Facebucks & Dumb F*cks," the lead character Z-Man (aka Mark Zuckerberg) also realizes that China is its main threat - even moreso than Google (aka Gobble) - when it comes to world domination of the Internet (see previous post "Facebook Search vs Google Search - Battle for Internet Domination").
Page from Facebucks & Dumb F*cks graphic novel