Renren CEO Chen Yizhou
Renren (NYSE:RENN) is the king of China’s traditional social networking hill. But like China’s other social giant, it has found that relying on advertising alone to produce revenue isn’t all that effective. Renren CEO Chen Yizhou said recently that he’s looking for alternative revenue streams, and that he believes games and e-commerce are the keys to social networks retaining their viability.
Of course Renren already has games and e-commerce subsidiaries, including the group buy site Nuomi, which currently enjoys a modest 6.5 percent market share in that sector. It still isn’t making any money, but its losses are shrinking. It seems clear that Chen hopes to lean more on these subsidiaries and less on Renren’s traditional social networking model to strengthen the company through diversifying its revenue streams.
To that end, Chen also says Renren will have to rely on internal R&D, especially in the mobile sector. Currently, mobile income only amounts to about 10 percent of Renren’s overall income, despite the fact that mobile games in general are making all kinds of money. Developing better games and better mobile payment solutions will be important to Renren going forward, Chen suggests, and he wants to do more hiring in that area. Currently about 45 percent of Renren employees are working on the mobile side of things.
Although the company isn’t making a profit and faces a threat in Sina Weibo, Renren is far from dead, and in fact is still seeing strong user growth; with users up 31 percent compared to a year ago. Chen Yizhou also suggested that while weibo certainly hasn’t helped Renren, it has been more damaging to Renren competitor Kaixin001 because (according to Chen) their target demographics are almost exactly the same as Sina’s.
[via Sina Tech, image via TechWeb]
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