Born in 1969, in Wuchang, Hubei province, Chen Yizhou’s talents took him first to university in Wuhan to study physics, then to the University of Delaware, before he ended up studying engineering at MIT.
His first job was at Altec Industries, a US service provider to the power and construction industries, heading their North Asia operations. But Chen clearly has a thing for higher education: he quit to study for an MBA at Stanford.
It was at Stanford that Chen met his future business partners, two Chinese engineering students with an interest in the internet. In 1999, all three returned to China to set up ChinaRen, a virtual community offering games, emailing and blogging services. It targeted university students and by the following year had more than a million registered users.
Despite the initial success, ChinaRen was not immune to the dotcom crash. Luckily, the site was considered worth buying, by Sohu for approximately $30 million. Chen joined the acquirer as a senior vice president, but left in 2001.
Chen’s next project was China InterActive, another online venture offering a portfolio of popular websites such as World of Warcraft China and DoNews. It then started to gravitate towards social networking sites, buying established players such as xiaonei.com, which by late 2007 boasted a network containing more than 18 million university students from 2,200 universities.
The next step was financing, which came in 2008 in the form of a $430 million injection from Oak Pacific Interactive ($384 million coming from Japan’s SoftBank).
Chen then set about creating a new site, kaixin.com to compete with kaixin001.com, a network that had become popular with office workers at their desks. A legal dispute is still ongoing between the two, after kaixin001 won a case claiming infringement but was unhappy with the compensation awarded by the courts.
Need to know
In August 2009, Chen engaged in a little rebranding with the kaixin.com and xiaonei.com sites being retitled under renren.com. When it listed on Nasdaq at the beginning of May, it was marketed as the Chinese version of Facebook. With 131 million registered users, it raised $740 million. After rising 28% on the first day of trading it has since traded below its IPO price (it listed at $14 and on Tuesday was trading at $12.60).
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.