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Viadeo May Sell Shares ‘Soon,’ Cement China Lead Over LinkedIn

June 07, 2011

June 7 (Bloomberg) -- Viadeo Group, owner of China’s largest online networking site for professionals, said it may sell shares to the public “soon” to help fend off any challenge in China from bigger global rival LinkedIn Corp.

Viadeo started discussions with bankers earlier this year and will probably decide whether to do an initial public offering in the next month, Derek Ling, chief executive officer of the Paris-based group’s Chinese site,, said in an interview at his office in Beijing today.

Tianji plans to boost users to 10 million this year, from 6 million currently, partly by opening the site to applications from outside developers and adding community-building features, Ling said. LinkedIn has estimated the target market in China at 100 million professionals, while it has yet to create a Chinese- language service.

“We are the clear, dominant leader in China already,” Ling, 47, said. “China is our market to lose.” He declined to estimate the size of a Viadeo share sale or to disclose Tianji’s financial performance.

The world’s fastest growing major economy and biggest Internet market with 477 million Web users, may become Viadeo’s largest revenue contributor, Ling said, without providing a timeframe.

Viadeo says it has 35 million users worldwide, the largest after Mountain View, California-based LinkedIn, which has about 100 million and got about 27 percent of its sales from outside the U.S. last year.

LinkedIn Unblocked

LinkedIn, unique among the largest U.S. social networking sites, isn’t currently blocked by the Chinese government, which restricts access to Facebook Inc., Twitter Inc. and Google Inc.’s YouTube. LinkedIn’s service was disrupted in China for more than 24 hours Feb. 24-25 after user postings supported calls for protests in the Asian nation.

China bans pornography, gambling and content critical of the ruling Communist Party.

Ling set up Tianji in 2005 and sold it to Viadeo in 2008, staying on as chief executive of the China site, he said. He now reports directly to Viadeo Chief Executive Officer Dan Serfaty.

China is on the cusp of “explosive growth” in social networking by professionals, who have yet to make much use of the Internet for business, Ling said. The Internet has primarily been youth-oriented for entertainment in China, and that is beginning to change, he said.

Subscription Revenue

Viadeo as a group gets more than 50 percent of its revenue from subscriptions, Ling said. The China site has begun efforts to generate revenue this year through advertising and recruiting, he said. The China site will begin using premium subscriptions to generate sales next year, he said. About 15 percent of Tianji’s users are “active” in that they log in at least twice a month, Ling said.

Tianji’s brand, intellectual property and Internet content provider license in China are held by a local Chinese partner, Ling said, refusing to identify that partner. Ling said he was born in Hong Kong, raised in China and educated in the U.S. and holds citizenship in Hong Kong and the U.S.

LinkedIn raised $352.8 million in its May 18 initial public offering and underwriters two days later exercised an overallotment option for more shares that boosted the offering to $405.7 million.

LinkedIn is now available in languages including English, French, German, Italian, Portuguese and Spanish. Members can also create individual profiles in at least 41 languages, including Chinese.

“Given where the market is and the appetite for social media, we’ve been approached by many bankers,” Ling said. “We might decide to go soon. It’s likely in the next month we will make a decision.”

--Edmond Lococo in Beijing. Editors: Nicholas Wadhams, Dave McCombs, Chua Kong Ho

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at

To contact the editor responsible for this story: Young-Sam Cho at

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