YY Launches A Separate Online Education Platform 100.com

YY Inc. (NASDAQ:YY) , the leading live video streaming platform in China, today announced 100.com, an online education platform.

YY, actually, has had YY Education, an online live video streaming service for teachers to give students lectures that was launched as early ad in 2011. There have been more than 100,000 video lectures delivered, according to the company. It claims there are more than 800 educational institutions and 20,000 teachers on the platform, with 6 million monthly active users.

As one of the three categories of YY offerings, YY Education, however, was way less profitable than the other two. YY Music and YY Gaming accounted for 47% and 32% of YY’s total revenues in Q3 2013. David Xuelin Li said they didn’t expect to see meaningful revenues coming from YY Education on the latest earnings conference call in late 2013.

Different from YY Education, 100.com is not focused on video lectures but includes all kinds of educational materials, text, online tools, mobile apps, etc.

But like YY Education, 100.com needs teachers or educational agencies to contribute content. 100.com promises to give the majority of earnings, up to 100%, to them.

100.com currently has two separate channels for TOEFL and IELTS — the prep classes for the two exams have been of the most profitable for many private education services in China. 100.com will offer all the materials for the two exams for free.

What’s interesting is the offerings on 100.com are almost the same with what New Oriental, a must go to private school for Chinese students preparing for exams like TOFEL, has been offering at offline classes or online. New Oriental have been living on those classes and other paid services.

Pulling down existing profitable businesses with free services and then making money through value-added offerings or advertising is an approach well received by Chinese entrepreneurs. Qihoo 360 is a typical instance.

If one reason that YY Education couldn’t make that much money is users were reluctant to pay for online education, 100.com will be able to, when the platform is large enough, make revenues from businesses through ways like featuring third-party online services or mobile apps.

To support the free offerings, 100.com said at today’s announcement event that they’d input RMB1 billion in the next two years. 100.com even promised to reward students who have finished an online course RMB100.

There’s no doubt that China’s private education market will be disrupted before long. Big Chinese tech giants such as Tencent and Alibaba have launched platforms too for teachers to interact with students online.