12 Billion Dollars Worth of Mobile Social Networking in Asia
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12 Billion Dollars Worth of Mobile Social Networking in Asia

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You said $12B!? You can't be serious!

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12 Billion Dollars Worth of Mobile Social Networking in Asia 12 Billion Dollars Worth of Mobile Social Networking in Asia Presentation Transcript

  • US$ 12 billion in Market Cap Learning from Mobile SNS in Asia Benjamin Joffe, CEO | Plus Eight Star Ltd. Mobile Social Networking Asia Hong Kong | 2010.05
  • Let’s go home “Social Networking Is Not a Business…” MIT Technology Review (July/August 2008)
  • TIME (April 2009)
  • Meanwhile…
  • Source: “What Asia can tell us about mobile SNS”, +8*, June 2008
  • Source: “What Asia can tell us about mobile SNS”, +8*, June 2008
  • Tour Guide Slava Polunin Clown
  • Introduction
  • Benjamin Joffe 4 years 1 year 5 years
  • What I Do Now • CEO, Plus Eight Star | www.plus8star.com – Digital Strategy & “Innovation Arbitrage” – Best practices from Asia’s web and mobile • Partner, Cmune | www.cmune.com – World’s First 3D game on social networks – On Facebook, MySpace and Apple.com • Mobile Monday Beijing – Monthly forum for mobile professionals – 35 events, 120 speakers, 3,000 participants • Angel Investor, Advisor, Speaker
  • Paradise Paintball | World’s First Social FPS! AWARDED “BEST NEW GAME” ON MYSPACE (GDC 2010) www.cmune.com www.facebook.com/paradisepaintball
  • Quiz
  • Who are They?
  • Answers #2 youngest self- made billionaire in the world after Mark Zuckerberg Pony Ma, CEO, Tencent Yoshikazu Tanaka, CEO, GREE
  • The US$12 Billion Challenge
  • Market Caps (May 2010) $35.3B $4.2B $2.5B $900M
  • Tencent 1Q 2010 • Results – Total 620 million USD – Mobile 90 million USD (14.5%) – Net margin 42.7%
  • Tencent 1Q 2010 • If share of market cap – 14.5% of 35 bln = 5 billion USD
  • Internet Trends, April 2010
  • Our Real Challenges 1. We are old 2. We are not users 3. We are from a different place 4. We have a lot of preconceptions
  • Questions • Why are mobile SNS only successful in Asia? • Why are GREE and MBGT worth more than Mixi? • How does Tencent succeeds on mobile? • What are the key factors for mobile SNS success? • What’s ahead?
  • Context
  • Digital Populations Country USA China Japan Korea Population 300 mln 1,300 mln 130 mln 50 mln Internet users 225 mln 380 mln 100 mln 35 mln Mobile users 260 mln 700 mln 100 mln 45 mln www.plus8star.com
  • IT Infrastructures 100% 3G: 95% Web: 59% Avg. 7.6 Mbps 80% 3G: 72% Web: 68% Avg. 11.7 Mbps 60% 3G users C hi 40% n 3G: 25% Web: 25% a Avg. 4 Mbps 20% 3G: 2.5% www.plus8star.com 0% Web: >1% 0% 20% 40% 60% 80% % of Internet connections measured above 5Mbps (Source: Akamai, 4Q09)
  • The Story of Mobile SNS
  • Is the New so New?
  • ImaHima (Japan) (“are you free now?”) 250,000 users in 2001
  • Mogi (Japan, 2003)
  • Book | Mobile Social Networking • Author: Tomi Ahonen • 50 Case Studies! – Published: 2009 – 10 EUR 
  • It all started (almost) by accident
  • Mobile Game Town (Initial Model) • Mobile only • Simple Flash Games • Avatars • Advertising (pageviews) • Affiliate (“offers”)
  • Mobile Game Town
  • Source: DeNA
  • Mobile Game Town (Evolution) • Mobile only • Simple Flash Games • Avatars • Advertising (pageviews) • Affiliate (“offers”) • Direct Sales • Partnerships with Game Publishers • Open Application Platform • Partnership with Yahoo Japan
  • 3D Avatars
  • National Brands on Board!
  • Mobile Open Platform • Launched January 2010 – 40 partners – 92 games – Virtual goods, ads, avatars – Leverage expertise from in- house games – Some games also released on Mixi Mobile! • Target: Become the #1 Social Entertainment Platform
  • Mobile App Platform (Oct.09) (330 apps as of February 2010) City Building Harvest Moon Shopkeeper Furauni By Liveware By Liveware By Geisha Tokyo By Konami
  • Revenue
  • Revenue 70 MUSD in Q3! PV x2 With apps 35M USD = games!
  • Business Models Evolution #1 Mobile SNS in Japan US$250M in 2008 Ads CPA Virtual goods
  • Gree (Initial Model) • Web-based • Real name • Advertising • Competing with Mixi!
  • Gree Model Change! • Web-based > Mobile > Mobile + Web • Real name > Nickname • Advertising > Digital goods • Competing with Mixi! > With MBGT! • Partnership with Mobile Operator KDDI
  • Gree
  • Advertising Gree Home Advertising & Affiliates | 25% Avatars & items B2C virtual Games goods | 75% 60% avatars 40% games
  • 4Q09 Revenue 81M USD Profit 50M USD!
  • Usage & Demographics • PageViews • Demographics – 99% Mobile – Gender parity – 24.7 bln/month – 75% users 20+ y.o.
  • Mixi: From PC to Mobile Unit: 100M PV Unit: 10K Users Application platform introduced PV (mobile) PV (PC) Users Monthly PV 27.6B – Mobile (80%) 22.5B – PC (20%) 5.1B 2007.12 2008.12 2009.12
  • Tencent • #3 Internet Company in the world – After Google, Amazon • 570 million active IM accounts • 428 million active SNS accounts • 23 million paying subs. for mobile services
  • QQ IM & QZone
  • Chat room WAP Brower Game Info: finance, Music player book, news E-mail Movie Qzone (blog) Source: Inside Tencent Report 2009 www.plus8star.com
  • PC-Mobile Connection Cross-platform gaming QQ Show service available on PC and mobile
  • Tencent IR, May 2010 • “Increase in subscription to our bundled SMS packages as we enriched the privileges and features” • “WAP portal traffic increase, reinforcing leading position in the free WAP portal industry.” • “Growth of MVAS business dampened by the suspension of billing for WAP services by China Mobile since 30 November 2009 and decline in legacy mobile voice value-added services.” • “Visibility of our MVAS business remains low as industry continues to face significant regulatory uncertainties”
  • Sticking to it Tencent #1 SNS in China US$1 bln in 2008 90% From Virtual Goods (40% Net Margin) Market cap US$35 bln (more than eBay) IM was not making money and our competitors moved to other ventures. I did not have other ideas Pony Ma so I stuck to it. Founder & CEO Tencent (QQ)
  • Some Interesting Curiosities
  • One Mobile SNS to Rule Them All? • Cyworld Mobile • Disney Wonder Days • N-Plugs • Eki-Moba • Dear Profile • Helpers Network • Face Check • World Camera
  • Cyworld Mobile Mini hompy/ Cyworld Zone: Map, Video Item shop My picture 1.Guest book 2.Photo album 3.Friends list Emotion expression 4.Diary About service fees 5.Plaza Find subscribers 6.BBS Registering for fixed payment 7.Club 8.’My Cy’ (settings)
  • N-Plugs: 6 degrees mobile SNS
  • Main Screen ① Alert List ② Find People ③ Mobile Home Page ④ Social Query ⑤ Search Engine ⑥ Sharing folder ⑦ Friend list ⑧ Online hard drive ⑨ Option ⑩ Customer center
  • “Dear Profile” by Rakuten • Craze among junior high- school students. – Launched in April 2002 – 85% brand awareness for users between 13-15 y/o – 9 million accounts (2008) Profile page • Simple Friends-matching - Display photo SNS - Gender, age, blood type - Email address for • Very low privacy & trust contact: real mobile email display (no levels messaging function)
  • Face Check • FSE (Face Sensing Engine) by Oki Electric • Start in April 2007 • 30 million by end of June • 100 million by Nov 2009 • Then what?
  • Disney Wonder Days Toon Town Disney Hills Disney Where users characters’ have their residence home area. Select an area Market Place Central Park Buy items Meeting area
  • Fitting Room
  • “Eki Moba” by Excite • Launched by portal Excite in February 2007 • Targets train commuters • Originality – 3D Flash avatars Advertising in Tokyo train – Virtual currency can be exchanged for real station money in banks and post-offices • Eki Moba offers the following services – “Circle” community function – Chat / Smileys – Casual flash games / Ring-tunes – Shopping – Diary / Forum / Calendar – Translation / Fortune telling / Weather forecast Buying items & Profile playing games page
  • Job market SNS “O-Tetsudai Networks” Partner Registration Contract Work Partner demander User who can @ Need a helper for a short period in a confirm the skills of another user to precise place establish trust • Location-based Registration I just had some time Part-time jobs My plan cancelled today, I have time… Worker Want to use free between my shifts! I’m so lucky! The girl at the time in an efficient register caught a way. Want to use cold today. How to one’s skills replace her? How to find • Skills / location someone to take care of my baby for just an hour? / time-slots convenience store Student ex-worker Convenience Restaurant Store manager manager Freelancer Housewife
  • Sekai Camera by Tonchidot
  • Sekai Camera
  • Sekai Camera
  • Location: Place Engine
  • Takeaway Ideas
  • Why do users care? • Time-filler – Day breaks – Entertainment • Social value – Social capital – Serendipity – New encounters • “Real” (as in “measurable”) value – Business, jobs, discounts, etc.
  • The Value of Freeloaders • A bar with only 10% of patrons? – Spend for all others + profit – Fortunately, servers and pixels are cheap • Contribution of freeloaders – Virality – Social Proof – Engagement – Re-engagement
  • Parallel with Mobile Users • Question: Is a user with $0 ARPU good?
  • It depends… • On your acquisition costs • On your maintenance costs • How many people call her • How happy she is • How many new users she recruits • How many services she uses & introduces around • How famous she is • Etc.
  • What to do now? • Understand psychology and sociology • Understand the “real” and perceived value created • Reinforce social graph • Make payments painless – “Micro-transactions on iPhone” – Inside Social Apps, 2010.04 • Sell data plans
  • Thanks! More about “Innovation Arbitrage” www.plus8star.com benjamin@plus8star.com +81 | Japan benjamin0123 +82 | Korea +86 | China http://twitter.com/plus8star Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star
  • About +8* • Innovation Arbitrage – “Bringing proven best practices and business models from Asia” – +8* (Plus Eight Star) is the leading cross-market consultancy on mobile, telecom and Internet in China, Japan and Korea. – We work with large companies, SMEs, investment firms and governments worldwide to bring them strategic advice and the best practices from advanced Asian markets. • Our expertise – Internet: our work covers social media, communities, ecommerce, online gaming and virtual worlds. – Telecom: we have extensive experience with mobile and telecom services (e.g. mobile marketing and advertising, mobile commerce, mobile TV and mobile communities). There are more ideas outside of your country than inside. Tom Kelley Author, The Art of Innovation Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 81 | 8
  • Our Clients EUROPE USA ASIA Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 82 | 8
  • Selected References • Adidas | E-commerce and mobile commerce market analysis and strategic recommendations for China, Japan & Korea • Bouygues Telecom | Cases studies of leading Asian Web 2.0 services and virtual worlds • Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet convergence strategies • EU-China Information Society | Research on e-commerce and virtual worlds to support the regulatory dialogue between the EU and Chinese authorities • Microsoft | Analysis of Japan’s key players and market catalysts for mobile commerce market positioning in China • DeNA | Benchmark of leading SNS in China and South Korea (DeNA operates Japan’s leading mobile social network) • China Mobile | Benchmark of Korean leading online communities • Sands Capital Management | Evaluation of investment opportunities in social networks in China • MIH / NASPERS | Analysis of leading online verticals in China (MIH is the largest shareholder in Tencent, China’s leading online community) • IMVU | Benchmark of monetization and engagement best practices in Asian virtual worlds & SNS (IMVU is a leading US-based 3D virtual world & chat) Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 83 | 8
  • Customer Testimonial | IMVU Inc. COMPANY: IMVU Inc. Lee Clancy, VP Product Management & GM of Direct Revenue August 2009 Q Has the service performed by +8* met your expectations? A The consulting services provided by +8* met IMVU's expectations. Benjamin and his team showed a deep understanding of major Asian virtual worlds and gaming companies, as well as their potential implications for IMVU. In our communications with them, they were very responsive to our follow-up questions and completed their final deliverables on-time. Q How have you used or plan to use this research within your company? A Only a few weeks after +8* delivered their findings to IMVU, we had already identified and roadmapped various product enhancements that were a direct result of our learnings from the +8* study. What is more, we have since launched pilot versions of those new features that have received extremely positive feedback from IMVU users (e.g., "My Pets" mode). Additionally, +8*'s comprehensive report is an invaluable reference that I consult often when considering new product enhancements. Q What decided you to hire +8* for this project? A We chose to hire +8* for this project because 1) they had a strong professional track record, which we confirmed with representatives from several blue chip clients of theirs prior to the study; and 2) we felt that their area of expertise and past studies were strongly aligned with our research needs. Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 84 | 8
  • Speaking Engagements • Speaking Engagements – Regular keynote speaker & moderator in IT, Media & Investment events. – Engagements in 2008/09/10 • CHINICT (Beijing, Upcoming) • Graphing Social Patterns (Washington, D.C.) • Global Mobile Internet Conf. (Beijing , Upcoming) • iGaming Asia (Macau) • Echelon 2010 (Singapore , Upcoming) • Unite Conference (San Francisco) • Mobile Social Networking Asia (Hong Kong , Upcoming) • China Mobility International Summit (Beijing) • Virtual Goods Forum (London) • 3G Summit (Kunshan, China) • Stanford University (Entrepreneurship) • Red Herring Asia (Hong Kong) • Berkeley University (MBA) • China Internet Forum (Beijing) • SXSW Interactive (Austin) • Media’08 (Sydney) • PICNIC (Amsterdam) • China Internet Forum (Beijing) • Virtual Goods Summit (San Francisco) • Wireless Developer Forum (Beijing) • Inside Social Apps (San Francisco) • Open Web Asia (Seoul) • eComm (San Francisco) • XMediaLab: Virtual Worlds (Seoul) • Ad:Tech (Beijing) • Mobile Monday Global Summit (Helsinki) • Ad:Tech (Shanghai) • Mobile Monday Global Summit (Kuala Lumpur) • Ignite (Amsterdam) • EU-China Virtual Worlds Conference (Beijing) • Ignite (Beijing) • EU-China eCommerce Regulatory Workshop (Beijing) • Ignite (Paris) • Startonomics (Beijing) • Mobile Asia Congress (Hong Kong) • UnConference (Singapore) • Lift Asia (Jeju, Korea) • BarCamp (Shanghai) • ITU Asia (Bangkok) • La Cantine (Paris) • Infinity Ventures Summit (Sapporo, Japan) • Mobile Focus (Stockholm) • LeMobile 2.0 (Paris) • Asia Venture Capital Forum (Hong Kong) More information at www.plus8star.com/presentations/ Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 85 | 8
  • Media Coverage • Media Coverage – Our research and views have been quoted by numerous media outlets on topics ranging from Telecom and E-Commerce to Social Networks, Gaming and Virtual Goods. – Selected media: Forbes, The Economist, The New York Times, International Herald Tribune, The Guardian, Advertising Age, VentureBeat, TechCrunch, ReadWriteWeb, Gamasutra, etc. More information at www.plus8star.com/press/ Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 86 | 8
  • Event Organizer & Advisor • Founder & Organizer: Mobile Monday Beijing – Mobile Monday is the leading network of mobile industry professionals, counting over 50 chapters around the world. – We founded the Beijing chapter of in 2006 to support the ecosystem. – Results: 35 events, 125 speakers, 3,000+ participants (avg.100). • Co-Organizer – Startonomics (Beijing, May 2009) – Startup2Startup (Beijing, May 2009) – Open Web Asia (Seoul, October 2008) • Advisor – TEDxBeijing (November 2009) Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 87 | 8
  • Contact • Benjamin Joffe, Founder & CEO – 10 years experience with Telecom & Internet in Asia. – “China’s Top 100 mobile industry influencers” in 2007 & 2008. – Senior Expert for the EU Delegation to China. – Regular speaker at events on mobile and Internet in Asia. – Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and Spanish. +81 | Japan • Contacts – benjamin@plus8star.com +82 | Korea – benjamin0123 +86 | China – http://twitter.com/plus8star – www.linkedin.com/in/benjaminjoffe Telecom & Internet – www.slideshare.net/plus8star + Added Value * High quality Beijing Office (HQ) Tokyo Office Oriental Kenzo, Tower A-20D Flat Hagiwara 2D 48, Dongzhimenwai, Dongcheng District Setagaya-ku 6-36-8 100027 Beijing, P.R. China Tokyo, Japan Tel: +86 (0)10 8447 7985 info@plus8star.com Mobile & Internet © Copyright 2010. All rights reserved. www.plus8star.com Innovation Arbitrage 88 | 8