Last month, Fetion, the free IM service from China Mobile opened its door to users from other carriers. With threat from the rapidly growing mobile chatting tools and Fetion’s downward trend, this seems like a forced decision.

Fetion was first launched in 2007 as a free-text messaging service; the company used to be very optimistic about it and tried to make it the best in IM field. From 2009 to 2011, China Mobile spent RMB 1.54 million on Fetion’s maintenance and development. It is roughly estimated that with the RMB 600 million of the outsourcing contract about Fetion this year and 800 million for 2007 and 2008, the total investments China Mobile has put into Fetion reached RMB 3 billion. Plus related marketing fees for the service are not included.

The input is huge, but the result shows a declining trend. Zhang Yi, CEO of iResearch, said. “Telecom is a monopolized industry, but Internet is a very competitive market. It seems that China Mobile is still trying to use the traditional telecom mindset to sell internet products.”

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Charlie Sheng

动点科技驻湾区记者. Charlie is an entrepreneur based in San Francisco and Hong Kong who calls herself the undefeated caffeine champion. You can reach her at charlie.sheng (at) technode.com