Renren, once hailed as China’s Facebook, is dead in the water as active user numbers drop

Renren (NYSE:RENN), the social network once lauded as “China’s Facebook”, is on a slow and agonizing path towards its own vanishing point. Renren’s early success and quick growth in 2009 and 2010, built on the back of your manual labor on Happy Farm, the game that Zynga cloned as Farmville, later slowed down, and by this time last year it was slowly losing monthly active users (MAUs).

Renren’s newest data, revealed earlier this week in its Q2 2014 earnings report, shows an alarming new milestone on the social network’s road to the cliff’s edge – it now has fewer monthly active users than it had precisely two years ago.

WeChat steals the casual gamers

The loss in gaming revenues at Renren is even more dramatic than its slow leak of MAUs. Since Q1 2013, Renren’s online game revenues have fallen precipitously. Here’s the chart:

Renren’s gaming revenues are now so low that they’re at the same level as the company’s first ever quarterly financial report in Q1 2011 – after Renren’s May 2011 IPO – when it pulled in US$9.1 million from social games.

See: WeChat reaches 438 million active users, but growth slows

We all know that social media users in China have moved onto Sina Weibo (NASDAQ:WB) (which picked up steam in 2010 and 2011) and, more recently, WeChat – both those rivals are vast social networks that encompass news-reading, gaming, online payments, messaging, and so much more. But it’s still shocking to see Renren crumble almost to dust, its numbers revert back to levels from a couple of years ago.

It’s almost as if China’s Facebook is undoing everything it built. The company has tried for the past couple of years to diversify, with a focus on mobile games rather than web-based games, as well as several (failed) attempts at spin-off social apps. But now it looks to be game over.