As Facebook’s imminent IPO (initial public offering) became the talk of the Silicon Valley and Wall Street, you might have read from the social networking site’s SEC S-1 filing that it pulled in more than US$ 1 billion in profit on revenue of 3.71 billion. What Facebook’s prospectus will not tell you is, that the social giant has taken a page from Tencent’s business model book, at least, that is the case according to the Chinese giant Internet company’s CTO.
Xiong Minghua, Tencent CTO said in a speech gave at the ChinaBang Awards ceremony initiated and hosted by the leading China TMT-centric English blog media TechNode, that five years ago or even earlier in its early stage Facebook countered with serious pitfalls such as where Facebook was heading to (product direction), how to make money (business model) and funding (who was willing to invest in an online alumi), which Xiong believed are the common problems concerned Chinese entrepreneurs. So how did Facebook solved these problems then grow to become the Apple of the Eye of both the bankers and the geeks?
“Frankly speaking, it(Facebook) learned a lot from Tencent with regard to business models”, according to Xiong, “Facebook and Tencent has communicated in depth on that front in Facebook’s early stage. I visited Facebook back in 2006 and they cared a lot about Tencent’s business models – especially our micro payment, they studied it thoroughly. Their staffs visited us many times and we had lots of communications in the past few years.”
He also mentioned that before Facebook’s inception, U.S. Internet companies’ one and only business model is online advertising. Then Facebook came to rescue with micro payment and virtue item selling solution, the first of its kind back then.
On the other hand, Xiong sang high praises for Facebook’s part in ushering in a new age in the history of the Internet – to open up to the outside world rather than seal off. He said that the “Facebook open platform” marked the beginning of a new era, and there’s nothing like this before that could help the proliferation of startups.
At the same time, it seemed to him that the The Apocalypse of Facebook, and even of Tencent, is that you don’t have to as well as can’t afford to wait for a perfect team, the best user experience and a proven business model to start your own cause. These are the things to be solved while on-the-go, they’re part of the entrepreneurial path rather than the prerequisite. It might take longer time for some to figure everything out, or shorter for the others. The point is to stick to it. Tencent once considered selling the company, but luckily, it didn’t and hence it built up the Penguin Empire.
(The story is also co-published on TechCrunch http://techcrunch.com/2012/02/22/tencent-facebook/)