Tianya's share buy-back move presages IPO
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Hainan Tianya Online Network Tech Co Ltd, the operator of Tianya.cn - one of China's best-known online forums - has bought back all of its shares previously owned by Google Inc, as it paves the way for a domestic listing.
The company is also looking to take the first steps toward overseas expansion in the first half of this year. It will establish two overseas branches, one in California's Silicon Valley and one in Singapore, said Xing Ming, chief executive officer of Tianya, at a forum in Hainan on Wednesday.
The share buy-back is aimed at luring users and advertising clients from Southeast Asian countries and the North American region, as 20 percent of Tianya's traffic originated overseas last year, according to Xing.
Tianya has been seeking a listing on China's Growth Enterprise Board since 2007, but a number of domestic restrictions on foreign stake holders have hampered its progress.
"Google held less than 10 percent of Tianya. We bought back those shares because it is a necessary step in our IPO plan," Xing told China Daily.
He declined to reveal how Google's stake affected Tianya's IPO plan, but said the buy-back was completed at the end of last year after eight months of negotiation with Google.
Tianya and Google started cooperation in August 2007, with the US-based company providing technical support for a question-and-answer service called Laiba and a social-networking service, Tianya Wenda. The services were designed to compete with Baidu Inc's Tieba and Zhidao.
Google and Tianya suspended their cooperation in July 2010, with both saying the contract had expired.
Xing did not disclose a specific timeframe for Tianya's IPO, but said he "will allow things go naturally on their course". There are no fund-raising plans for Tianya in the near term, Xing said.
Founded in 1999, Tianya has grown into China's biggest online forum with registered user numbers of more than 50 million.
The company has more than 600 employees and has raised funds in the past five years, with an undisclosed sum coming from investors, including Legend Capital Limited and Jason Jiang, chairman of Focus Media Holding Ltd.
Compared with Internet giants such as Tencent Holdings Ltd, Baidu Inc and Alibaba Group, which all started around 1999, Tianya has moved at a much slower pace to forge a profitable business.
Xing said Tianya is always trying to find creative business models. The company launched the e-commerce space mall.tianya.cn in 2007 and an advertising platform called Adtop in 2009.
"Tianya has seen opportunities in the combination of Social Networking Services (SNS) and e-commerce," Xing said. He said that in the future, the biggest challenge for Taobao.com will not come from traditional e-commerce websites, but from SNS companies such as Twitter or Facebook.
More than 1,000 famous brands and business-to-consumer enterprises have entered Tianya's e-commerce space so far, such as Li Ning Co Ltd and the 7 Days Inn Group. They contributed up to 30 percent of Tianya's revenue in 2010, and the figure is expected to be bigger this year, according to Li Shengbing, the chief operating officer of Tianya.
By the end of last year, Tianya also launched its micro blog (the Chinese counterpart of Twitter), which daily achieves unique visitor numbers of 2 million.
