Founder and core team of Qidian, an online original literature platform under Shanda’s Cloudary, left Cloudary early this month. It is reportedly that the team will launch a new site in the coming May or June, partnering with Tencent or Baidu.(in Chinese)
Qidian is regarded as the inventor of the business model that is widely applied by almost all online original literature platforms in China. Starting as an amateur writers union, Qidian was launched in mid-2002 and began charging for premium content, 0.02- 0.05 yuan per thousand Chinese characters, in late 2003. It shared revenues with writers from the very beginning. It was acquired by Shanda in 2004 and reportedly turned a profit in 2006.
Shanda acquired another five online literature sites later. All the six sites, under the leadership of former Sina vice chief-editor Hou Xiaoqiang though, have been operated independently. Qidian has been the strongest in terms of both market share and revenue. In 2012, 30% of Cloudary’s total revenue and 70% of profits were contributed by Qidian.
It is said that Qidian team was unhappy with their parent company and had begun talks with PE more than half a year ago, trying to buy out Qidian with USD 400–500 million. But Shanda asked USD 800 million.
Venture capital started chasing the founder as soon as the news broke out that he might leave the company in early March. Now it is rumored that it has choices as powerful as Baidu and Tencent. It is believed that the team can re-build a Qidian since the most important for such a business is writers who have close relationship with Qidian team.
Cloudary, as the leader in China’s online original literature market, filed for IPO on the New York Stock Exchange as early as in 2011. In late 2012, rumor went that Cloudary IPO was set for this month. It’s unknown whether the unexpected leave of Qidian team had impact on the IPO plan at all.
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