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New business models
in online communities
Benjamin Joffe
Managing Director | Plus Eight Star Ltd
Media’08 | Sydney | March 2008
Innovation in Asia?
General assumption #1

Everything from USA is   great
General assumption #2

Everything from Asia is      weird
          (and sometimes funny)
Japanese like texting on mobile




                   Because they have small fingers



Anonymous manager at a telecom company in 2000
Asians like avatars




Because they read mangas and watch animes



              Anonymous manager at an Internet company in 2005
Chinese like ring-back tones




                   Because they go to KTV a lot



Anonymous manager at a foreign media company in 2006
Giving the

wrong explanation
       to the

right question
Not-invented-here

  spiral
   of oblivion
Make fun


Oblivion               Stereo
                        type




 Self-
                      Re-invent
evident

            Adopt
Why look at Asia?
1
Because some Asian markets
are strategically important
#2 economy
#1 population
#1 digital society
Broadband connections in Japan and Korea are up to
      10 times faster than the OECD average.




                    Japan also had the lowest relative monthly
                    broadband charges/Mbps



OECD Report, July 2007
Consequence #1
Internet penetration and
         speed
Consequence #2
Internet literacy
2
Because some great ideas
   have already been

    proven there
How about those concepts?
           Meta-blogging
         Content scrapping
  Trust-based information sharing
 Personal Resource Planning (PRP)
Alexa School of Investment



                Quiz
Global   China   Japan   South Korea
1    Yahoo!
2    Google
3    YouTube
4    MSN
5    Windows Live
6    MySpace
7    Facebook
8    Wikipedia
9    Hi5
10   Orkut
Global       China        Japan      South Korea
1    Yahoo!                     Yahoo Japan
2    Google                                    Yahoo
3    YouTube                    Google Japan
4    MSN            Google      YouTube
5    Windows Live
6    MySpace                                   Google
7    Facebook                                  YouTube
8    Wikipedia
9    Hi5            Yahoo       Wikipedia
10   Orkut
Global           China          Japan    South Korea
1    Yahoo!         Baidu           Yahoo Japan    Naver
2    Google         QQ              FC2            Yahoo
3    YouTube        Sina            Google Japan   Daum
4    MSN            Google          YouTube        Cyworld
5    Windows Live   Netease         Mixi           Nate
6    MySpace        Taobao          Rakuten        Google
7    Facebook       Sohu            Nicovideo      YouTube
8    Wikipedia      Tom             Livedoor       Empas
9    Hi5            Yahoo           Wikipedia      Gmarket
10   Orkut          56.com          Goo            Auction
Global           China          Japan    South Korea
1    Yahoo!         Baidu           Yahoo Japan    Naver
2    Google         QQ              FC2            Yahoo
3    YouTube        Sina            Google Japan   Daum
4    MSN            Google          YouTube        Cyworld
5    Windows Live   Netease         Mixi           Nate
6    MySpace        Taobao          Rakuten        Google
7    Facebook       Sohu            Nicovideo      YouTube
8    Wikipedia      Tom             Livedoor       Empas
9    Hi5            Yahoo           Wikipedia      Gmarket
10   Orkut          56.com          Goo            Auction
SNS are a   new media
Genetics of SNS
Parameters
                Visitors                                       Personal URL
                                                                                       These figures reflect
                                                            / Add to my favorite
              Today / Total                                                           user’s various statistics
                                     Updated contents



                                                                                               - Content copies
  Emotional
                                                                                                  (scrapping)
   status
                                                                                                 - Registered
                                                                                                 number as a
  My photo                                                                                          favorite

                                                                                                Music Player
                                                                                                Bought by user
  Comment

   Name &                                                                                      [Main menu]
   Gender                                                                                      Configured by
                                                                                                   user
[Neighbors]
  View this
  person’s
 neighbors
                                                                                             Skin
                                   [Mini-room]          Comment by                 Purchase new skins for a
                              Cyber residence of user    neighbors                 coordinated background,
                                                                                          icons, etc.
Q Bi: cyber $
       Secretary
           E-mail                 Multi-person chat
   Online status                       Game/Music
   QQ buddy list                         SMS/MMS
        Weather                         File transfer
     Online disk                        Voice/Video
                                       Friend name:
 Wireless service
                                                Cathy
       Mini portal                                Ad
            Music
                                Chatting with Cathy
           Game
                                 Cathy’s QQ Show
      Interaction               Take a group photo with
    Panel admin                      Cathy’s QQ Show
  Making friends                  Cathy’s QQ Zone
    E-magazine                        Background
                                     Screen shoot
C2C e-commerce                            Send pic
       Stock info                  Active emotion
     Address list                         Emotion
       Group list                             Font
    Last contacts                    My QQ Show
                                        Input area
            SMS
    Main menu
Tencent browser
         History         IPTV
    Chat rooms
         Search      QQ Pet
Metrics
  Pageviews
Number of users
  Revenues
Social
Network
 DNA
Starting date



2004   1999   2004     1997
Active accounts




60 mln   20 mln   14 mln 270 mln
Reach (Internet users)




200 mln? 35 mln   90 mln 200 mln
Revenues 2007 (USD)




150 mln 200 mln 100 mln 400 mln
Profit 2007 (USD)




(50 mln) 100 mln 35 mln 180 mln
Valuation (USD)


            ?

MSSE               TSE      HKSE
15 bln?    n.a.   1.8 bln   11 bln
Main business models

     Ads             (Ads)        Ads       (Ads)

(Digital goods)   Digital goods          Digital goods

                                           Games


                  Mobile VAS             Mobile VAS

                                  Jobs
Ads or Digital goods?

1. Who is the client?

 2. Not incompatible

  3. There is more!
Other business models

        Targeted Ads
        Storage
        Monthly fee
        Personalization
        Alerts…
Key features

Invitation system
Closed/Open/Semi-closed
Sticky features
Payment solutions
Mobile
Online/Offline connection
Social design

   Focus
   Values
 Atmosphere
Demographics
Psychological design

 Identity / Identities
        Trust
The missing blocks
1
Payment infrastructure
2
Trust system
3
New value chains
To remember
1
Are you the target?
2
Resist the temptation
 to stereotype
3
Look for concepts
   Adapt the rest
Thanks!
 benjamin@plus8star.com
      Published research

              Inside Cyworld
              Inside QQ
Free sample | www.plus8star.com

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