Are we Close to Seeing Renren?
‘China’s answer to Facebook’, Renren.com, is apparently seriously considering a stock market float in the United States according to the Financial Times. They have enlisted the services of Deutsche Bank, Morgan Stanley and Credit Suisse for advice, which would make it the first social networking site to have a public presence.
The Renren story is strikingly similar to when Facebook was founded. Originally student-centric, it’s the largest site of its kind in China and was created by three graduate students in 2005, and pulls in approximately 22million active users. Renren translates as ‘everyone’, and originally operated under the name Xiaonei, which translates as ‘inside school’
Renren.com is looking for advice on its initial IPO, which will could raise upwards of £310million. Though they may become the first public social networking site, they won’t be the first Chinese website to be floated on the New York Stock Exchange. They’ll be following other recent success stories including TV company Youku.com, eCommerce site Dangdang, search engine Baidu and others.
So what’s taking Facebook so long to become a public company? Quite a lot of it is probably to do with its $60billion valuation, which comprehensively dwarfs the likes of Renren, and even, to an extent, Twitter and others. There’s certainly been positive results for Chinese companies who have entered the NYSE – since Baidu was listed in 2005, its shares have risen an incredible 4,660 percent.
Would Facebook see similar results? It’s imperative they keep momentum and don’t rock their already successful boat. There are an awful lot of advertisers and wealthy backers to consider before coming to such a decision – from the rich and powerful to those who feature their ads as part of their regional SEO campaign. Would going public make any difference to people who use Facebook as an essential part of their search engine marketing campaign make any difference? Not likely, but it might make a difference to Facebook’s future…
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