We reported about Shanda’s IPO plan for its online literature division.
The latest update: Shanda Literature, a division within Shanda Interactive Entertainment, plans to go IPO in the U.S. sometime this month, according to an investment banking source.

The division was formed in July 2008. It becomes the largest copyright owner of online literature in China by acquiring many smaller electronic book sites, including Qidian, Hongxiu, Rongshuxia, ReadNovel, Xiaoxiangshuyuan and so on.

Revenue comes from paid subscription. Usually, for online novels, users can read the first few chapters for free and pay if they want to continue reading the books.

The company is still making a loss, about US$50 million last year. But as more distribution channels for online literature and electronic books develop, such as, tablet computers, smart phones, e-readers and hence revenue should increase in the next few years.

“Reading fictions on mobile phone is very popular amongst Chinese mobile users. Even more popular than playing mobile games”, said an industry expert.