It moves to the front of social media in China. While Facebook negotiate its presence in the former Middle Kingdom, a local actor made a great leap forward stock. RenRen, the main social network made in China with 140 million users, arrived on Wall Street Wednesday. This "Chinese Facebook" even became the first player in the social web in the world to put both feet on the financial markets.
And the operation looks juicy. The IPO, which will be sealed off Thursday, RenRen must value to nearly $ 5 billion, or 67 times the real income of the company (77 million in 2010). A large gap which must be the envy of the little world of social media. Even Facebook can not generate such enthusiasm.The market value of the king of this universe 2.0 is estimated at nearly $ 70 billion or "only" 25 times its revenues. What then explains the success of RenRen? It is in three words: Facebook, Social Media and China.
The comparison with the American big brother does not stop only at the social network dimension. Like Facebook, the Chinese site was created in December 2005 as a portal for students. Subsequently, he conquered a wider audience, led by its CEO Joe Chen who copied each feature of Facebook (Connect, Places, Groups etc..).
Still, differences exist. First, the site must comply with the state censorship and will probably never be a vehicle for revolution as Facebook could be in Arab countries.RenRen but is also much less dependent on advertising, which represents only 40% of its revenues against 70% for Facebook. The rest comes home games that are a hit among users of the site.
The first in a long series
And RenRen is Chinese. "The company may be overvalued, but people will buy shares whatever happens [because it is Chinese]," said Darren Fabric, the director of an investment fund in Chicago on Tuesday Bloomberg . The dozen Chinese companies new technologies that have an IPO in recent months have all passed their time.The course of some companies - such as the Chinese equivalent of Dangdang Amazon - even won 50% in a few days after their initial quotes.
Investors are also attracted by the growth potential of RenRen. The social network has won 19% of new entrants in a year. And with a population of 400 million Chinese Internet users, has yet RenRen margin.
Finally, everything related to social media seems to hold gold in the eyes of investors. So much so that a true bubble seems to have formed the Silicon Valley (American mecca of new technologies).RenRen as a leading player in this sector to do its IPO, carries the hopes of all those who bet on social media.
After RenRen, other groups known to Western audiences more, must soon pass not turn the stock market. The professional social network LinkedIn, the giant video game on Facebook's site Zynga and bulk purchase Groupon are expected on Wall Street this year. The head honcho of the sector, Facebook, has hinted that he contemplated an IPO until next year
