Since 2006, Chinese Social Network Sites have started to boom. After Myspace and Facebook became more and more successful in US and Europe, some Chinese Social Network Sites started to imitate the idea and gained momentum over the last several years, such as Xiaonei and Kaixin001. US is the origin of Social Network Site, and some of them also want to take market share in Chinese market. However, we can witness the fact that although Facebook recently celebrated 200 million active users, only 300,000 of those users are in China (only about 0.1% of Internet users in China). I’d like to talk about two most popular Social Network Sites in China nowadays, Xiaonei and Kaixin001.

Xiaonei, meaning “inside the campus”, has 40 million members already, and most of them are students. Actually, Xiaonei is known as “Facebook clone”, as it mimics Facebook in many ways. So why is Xiaonei much more successful than Facebook in China? It’s the issue of localization. When Facebook had a Chinese version, many users complained that the translations lacked accuracy. So when coming across Facebook’s apparent obliviousness to the Chinese language, many users got turned off. In a word, Facebook doesn’t understand Chinese culture. They thought other countries and cultures would adjust to US style. Xiaonei is more like a combination of blog and social interaction. It inherited the alumni website phenomenon which was very popular around seven years ago in China, by narrowing down Facebook’s usual targets to students. The interface is quite well designed. Clean and clear color with user-friendly format. Xiaonei is actually doing a good job as a copycat Social Network Site.

Kaixin001 (”Kaixin” means happy in Chinese) is another social media network with a  big focus on online games. It targets white collar workers. “Growing vegetables”, “snatching parking lots” and “friends for sale” are the most popular game applications of Kaixin001, and some people (called Kaixiners hereafter) are crazy about these games. This could be the most important reason why Kaixin001 can realize “viral marketing” among many companies. It’s not very good if you are too close to your superior or a female colleague in the company (in China, at least), but it’s OK to play Kaixin001 with them. Many white collar workers keep Kaixin001 pages open during work. This might explain why Kaixin001 can surpass Xiaonei in traffic: its white collar strategy does work.

Someone says Xiaonei imitates the idea of campus-oriented and real-name registration from Facebook, while Kaixin001 imitates game applications from Facebook. None of them imitate the whole thing. So actually if you want to be successful, you don’t have to be a lot better than Facebook, you only need to excel in one area to achieve success. Some Chinese Social Network Sites did some imitation and localization, and achieved some success as well. However, if they still want to beat the competitors and be more successful, they need to find their own path. Some large Chinese Social Network Sites have started to launch open API platforms one after another, I think it’s a good start.

As always, it feels too early to go back to work. But it’s also the right time to look ahead and get on with the year. A lot of companies have delayed their market budgeting and planning till the new year to see how the land lies, so now’s also a good time to look at the industry environment and what marketing and PR are going to be most cost-effective. Our CEO Ralf Haller recently wrote his predictions for what will be hot in product marketing in 2009, and what not, and I think he’s spot on. So rather than making my own, here are three from other industry experts that I found interesting.

1. Business social networking to grow

Brad Shimmin, principal analyst at Current Analysis in a group podcast for Briefings Direct:

The first one for me is vendors tackling enterprise-plus-consumer based social networks, a blended view of those. Enterprise-focused vendors are going to do more than simply sink info from public sites like Facebook. They’re going to take that information and build into or out from the enterprise into those social networks and drive information from those. It’s going to become a two-way street.

You’re going to see folks like Facebook, and most notably, LinkedIn, working in the other direction themselves, and with third parties, to develop enterprise-bound social networks. Look for those to emerge next year.

And from Drupal CEO Dries Buytaert
Social publishing (blogs, forums, wikis, social networks, etc.) will become more pervasive and continue to make inroads in organizations seeking to facilitate collaboration between teams and departments. These applications, while nothing new, make many aspects of business better, are here to stay, and will mature over time.

2. Brands get promoted directly via microblogging & social networking

From The Marketing Consigliere:

Brands will use Twitter and some people will tolerate push communication.
Just as the original commercial Internet “pioneers” were eclipsed by corporate suits in regard to the continued development and exploitation of the Internet, brands will become a more dominant player in this tool. While the Innovators and Early Adopters who embraced Twitter may feel their “find” has been violated, this is just another stage in the product life cycle as the Early Majority and Late Majority get on board. Many of these later adopters will be complacent with one-way messaging, just as they have been while using other media…

As B2B buyers become less reluctant to use “consumer” apps in their daily work routine, they will accept this relatively new form of blogging as the primary means of communication with their vendors. (Personally, I doubt we will see Twitter etc. being the primary means in Europe this year, but interesting that it is taking off so fast in the US. )

3. New market entrants make fast impact using online marketing

From Joe McKendrick, also for Briefings Direct:

We are going to see folks — maybe IT people, or people who work for vendors and have been laid off — have the ability to start their own business at a very low cost of entry. On the flip side of that, the whole social-networking and cloud-computing phenomena, companies have these tools as well to employ low-cost methods to reach their markets and to interact with their customers. We’re going to see a lot more of that as well. A marketing campaign doesn’t have to cost $200,000 to reach your customers. You can use the social network, the Web 2.0 tools, to interact and collaborate and find out what’s going on in your markets at a very relatively low cost.

With the end of the year almost here, iand a number of recent stories, now seems like a good time to take stock of what’s happening on the social web. A mini news-roundup:

1. Facebook recently tried to buy to Twitter, perhaps just before their own valuation fell too far, but for that or other reasons, Twitter held out.
2. Facebook Connect service was launched, immediately followed by a competitive open-source solution from Google, called Friend Connect, supported by MySpace and others. Bot services extend users’ web personae and logins across participating sites.
3. Browser plugins support Google’s favoured OpenID website login system, and are offered as an integral part of Flock, the ’social web browser’.

I don’t want to go in-depth on these - links are to ars technica’s

excellent coverage. But they don’t name what I think is the elephant in the room, the iPhone, and other smartphones and small portables. I think 2009 will be an important year for them, recession or not. Laptops and desktops are essentially for work, and businesses and private users properly want to separate work and personal activities. The mobile phone is anyway right at the heart of interpersonal communication anyway and now offers better keyboards, screen resolution and apps. Mobile computing for business travellers is also pretty easy now on these devices. So for one thing I think both Google, Facebook and MySpace could become a little less dominant.

So this is a time of experimentation with a lot of new potential players creating apps, and brand loyalty is less of an issue when crossing platforms, so plenty of developments are possible, e.g:

1. Social networks are used more to organize the web experience and integrate it with users social experience more.
2. Location-based apps are increasingly players in both social networking and search functions.
3. Smaller screens create opportunities for a less complicated news aggregator than Google’s igoogle page, for example.
4. The browser and home page may become less crucial because of how apps are accessed on smartphones.
5. Aggregators of social networking sites, plus systems like OpenID, mean it is easy to have multiple memberships.
6. Twitter will continue to do well because of their minimalism.

OpenID and Friend Connect might also create opportunities for business social networking apps, though people will probably use them with caution at first for security and reputation reasons. Hard to see anyone getting ahead of Twitter’s combination of usability, flexibility, and discretion over how open to be, and Twitter groups could be key to directing traffic - functioning like a bunch of loose social networks and a dynamic news and views portal at the same time. Facebook might wish they had been able to grab them while they could.

US marketing and branding company Cone Inc. has just published a survey on using social media to promote businesses, with pretty dramatic findings. According to the survey, 93 percent of Americans believe a company should have a presence in social media, while an overwhelming 85 percent believe a company should not only be present but also interact with its consumers via social media. In fact, 56 percent of American consumers feel both a stronger connection with and better served by companies when they can interact with them in a social media environment.

When asked about specific types of interactions, Americans believe:

• Companies should use social networks to solve my problems (43%)
• Companies should solicit feedback on their products and services (41%)
• Companies should develop new ways for consumers to interact with their brand (37%)
• Companies should market to consumers (25%)

Cone also point out that this is a marketing lifeline for desirable but elusive prospects such as men in general, particularly, young men, and wealthy households. I think anyone would say these figures are high, but a little thought suggests they shouldn’t really be so surprising. In online marketing, the classic AIDA rules, Attention, Interest, Desire, Action, are more like:

• Get attention
• Drive to your website
• Encourage interaction
• Move to action

The middle two points can be weak points in the chain, and this is where I think social media make marketing more effective.

Why ‘driving to your website’ is hard

People come online with a view formed already of where they want to go. Particularly, I suspect, men. Most men I know like to (in theory at least) do their shopping with a kind of military attitude – decide on the shop/s, what they’ll buy, how much they’ll pay, and what time they’ll be home again. If we imagine them transferring that mentality to the web, diverting them is going to be much harder than interacting with them where they are, and much easier if you have already started the interaction there.

Really encourage interaction!

People like the feeling that they are the one holding the remote control. No matter how friendly your website is, users don’t normally get that sense, because you decide the content and the rules. Social media offers a “home space”. If users can interact with you there, they don’t relinquish control.

In Europe, too?

Social media sites, YouTube, Flickr, MySpace, Facebook etc, are doing pretty well in Europe. Facebook is apparently having difficulty getting the numbers in Germany, and actually hiring students to introduce them, but I think this reflects their being a little slow to localize, and maybe a preference for local rather than US sites. So with younger people social media are important, and the US experience is definitely relevant. For the rest of the market, we may still be a few years behind the US in using web features, so perhaps there is time to let this develop. But there’s no disadvantage to being on the scene early.

So many comments on the ‘Will they, won’t they?’ at the moment, that I expect some of the betting agencies are getting interested. Here are a few of the predictions, and the odds that I would expect to be offered(?):

Microsoft buys Yahoo within the next 6 months 4/6

Private equity firms launch bids as Yahoo share price plummets 12/1

Shareholder class action against Yahoo for holding out 5/1

Jerry Yang gets fired 8/1

Stever Ballmer gets fired 20/1

Microsoft acquires Facebook instead 8/1

Microsoft acquires Twitter instead 50/1

According to a Heise Online article, reporting from the first Cologne Web Content Forum, ‘Mit Inhalten ist kaum Geld zu verdienen’ i.e., the chances of earning money through web content are slim. Some of the figures they discussed were:

LinkedIn: Turnover per member per year > $US 5
Xing: pr Turnover per member per year > $US 4
FaceBook: Turnover per member per year > $US 3
YouTube: Income 2007: $US 20 M against business costs of $US 365 M!

The various reasons put forward for this included slower replacement of mainstream media services than predicted, and the sheer multiplicity of services competing for users’ attention.

In a similar vein, an OnlineBusiness-Guide blog Web 2.0: Finding a business model that pays, looks at the difficulty of getting cash out of social network apps, as many assume that numbers will mean ad revenue, even though ads do not necessarily suit each service. He, along with many other commentators, thinks that enterprise apps are the way forward, generating cash for useful social apps through licence fees.

The other way forward could be mobile apps, as Wolfe’s Den Blog in InformationWeek suggests in Web 2.0 Expo Reveals: Mobile Is The New Desktop, Social Nets The New Media Companies. That last suggestion makes a lot of sense to me intuitively, because that’s simply what I see most, and because users already pay according to the time and services used, making micropayment system probably a more straightforward possibility.

It will be interesting to see if Twitter, who are looking to raise $15M at a $60M valuation, get their money, in the light of this picture.