MySpace's Slow Start in China

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"We have not felt any impact from MySpace China."

Bigger names have gotten into the social-networking business, too. Microsoft recently launched Windows Live Writer, which allows Chinese users of its MSN service to write a post in their blogs offline and synch it with their Windows Live Spaces, the software giant's social-networking tool. Chinese search champ Baidu.com (BIDU) has also extended into social networking through a Web 2.0 service called Baidu Space.

MySpace seems to have a different vision of how to localize. Unlike its rivals that build busy and content-rich home pages to attract eyeballs, MySpace's site appears austere. "Our target audience is 18- to 25-year-old college students and graduates with less than three years of work experience" says Julia Zhu, marketing manager of MySpace China. "User participation and interaction are more important."

Tepid Feedback

The first move of MySpace China, the instant messaging service launched on June 13, isn't likely to wow those users. It's a preliminary product that does not support audio and video chat and cannot even transmit files. The Chinese IM market is dominated by Tencent Holdings' QQ, which has 84% IM market share and has expanded services into game, auction, and mobile IM. Though MySpace China claims that its IM aims to serve its existing members and will not compete directly with QQ, as the industry converges they are essentially competing for the same users.

Feedback by MySpace China users so far has not been encouraging. "The site did not provide me with any pleasant surprises," posted new member "He" on MySpace. Another user, "odbc," posted "the BBS (bulletin board system) is troublesome to use," and "Chang" said the site "does not feel so cool probably because of different cultural habits." Others complain the site is "cold" or "soulless."

Despite the challenges, MySpace, with its team expanded to around 36 people, seems upbeat. After all, it has the deep pockets of News Corp. behind it. "We are not thinking about revenue yet," says Zhu of MySpace China. "We want to focus on improving our products and services in the next half to one year."

Xiang is a reporter in BusinessWeek's Hong Kong bureau.