Not to disappoint its investors, Renren had a successful IPO on Wednesday. Its share price went as high as US$24 when it just started trading, before ending the day at US$18, up about 30% from its IPO price of US$14. By the way, this is after Renren increased its IPO price range by over 25% last Friday, from US$9-11 to US$12-14.
Yesterday, it price eased a bit more, to closed at 16.87. (Dow Jones was down close to 140 points. So, it might not mean anything) Anyway, Joe Chen and his team raised over US$743 million from the offering. They should be celebrating.
And, I was discussing with a friend about Renren and Facebook and whether he thought Renren equals Facebook in China. Surprisingly, my friend also do not think so.
1) Facebook is the single most popular social network in the U.S. China has many popular social networks.
Also, Chinese internet users engage in many different internet services to connect with their friends and business partners. “Tencent’s QQ is one of the largest and oldest. Recently, Sina’s Weibo are also popular,” said the analyst friend.
“Renren is not the de-facto way for people to connect with each other, not like Facebook in the U.S.,” he added.
2) While Facebook innovated a lot in the past few years, e.g. new way of advertising, applications connecting people, etc. Renren did not try hard enough to innovate itself – a quality highly valued in any tech company.
“Although QQ got its original ideas from the U.S. instant messaging service ICQ, today its services is much better than ICQ or even Microsoft’s MSN. Similarly, Sina Weibo started from cloning Twitter. But its service has surpassed Twitter in functionality and convenience. Renren does not try as hard to innovate itself. It just following the footsteps of others,” said the analyst.
3) Open platform is the latest trend in the world and in China. The value of a social network lays not only on its own users, but also how many other applications are connected through the social network, said the analyst. “In China, more application developers are willing to connect with QQ than Renren, as QQ has more than 600 million users. Over 80% of internet users have QQ accounts. Renren has just about 120 million users.”