The Happy Wars–a battle for white-collar SNS in China

There are a lot of facets to China’s buzzing social-networking sites that amaze and amuse me. They’re not only dominating the Chinese market, their figures are pushing past global leaders as well.TenCent’s QZone announced nearly two full months before Facebook that it had reached the 200 millionth user mark. And while successful monetization has become somewhat Grail-like for Western SNSes, their Chinese counterparts can’t spend their QQ coins fast enough.Both Facebook and MySpace have tried, largely unsuccessfully, to break into the rapidly growing Chinese market. And while it’s amazing to watch the international feeding frenzy for China’s 300 million Internet users (add KTV-reverb for effect), it’s not the repelling of would-be foreign intervaders, but a domestic battle that brings a smile to my face.

Xiaonei.com, one of the longer running sites in the Chinese SNS pool, has taken nearly all its cues from Facebook–right down to the site’s color scheme and focus on the college market (its very name means “on campus/in school”). Up until a year ago it was the SNS sector’s golden child for growth.

That’s when Kaixin001.com broke onto the stage. Quickly signing up China’s eager-to-be-social (and battle for parking spots) white-collar class, Kaixin Wang (lit. Happy Net) began to grow at breakneck speeds.

Even its odd URL, with its 001 tacked on the end, didn’t dissuade users or investers, with the startup grabbing US$5 million from Northern Light Venture Capital last fall.It wasn’t long after that Xiaonei’s deep-pocket parent company Oak Pacific Interactive, seeing its competition swelling, pulled out the big guns. In October 2008, after reportedly failing to purchase Kaixin001.com, Oak Pacific laid down a reported US$10,000 for the Kaixin.com domain previously owned by Zhejiang-based 9158.com.

In the months since, Kaixin.com has been developed into an open entertainment platform. Oak Pacific VP Xu Chaojun has indicated the Web site will eventually integrate with Xiaonei and “seemlessly transfer users”, according to a Southern Metropolitan News article.

The company has also mentioned it is considering developing Xiaowai.com (lit. “off campus/out of school”) into a more white-collar-focused SNS to compete directly with Kaixin001’s cubical-chained user base.

The question remains whether Kaixin001.com, currently trolling for US$20 million in a second round of investments, will rush out and grab Xiaowai.com. Current domain holder Qiu Weiping and the Shenzhen Adolecent Activity Center may have just hit the lotto.

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