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Social Media’s Silent Giants: Naspers and DST
Naspers and DST are not household names, but they have long fascinated me for their huge level of ownership and influence over Social Media globally.
If the global evolution of Social Media interests you, watch these companies. They have a track record of being smart, fast and highly intelligent investors.
Their strategy: Arbitrage Internet experience across geographies by investing in developing world markets where most Western investors are reluctant to go.
The graph to the left, from a Naspers document, outlines the company’s investment strategy matrix.
The investment world now seems to be taking more notice of the companies, with The Economist writing a short but informative piece about Naspers and DST.
Some highlights:
Naspers:
- Based in Cape Town, Naspers is nearly 100 years old and is the publisher of the Daily Sun, South Africa’s biggest newspaper.
- Using cash thrown off by print and pay TV sales – 28 billion rand ($3.6 billion) in the year to March – it has invested around the globe in Social Media and Internet.
- Naspers owns part of mail.ru, was an early investor in Tencent (now holds 35% owner).
- Naspers has the largest portfolio of internet firms in developing countries, for instance in Brazil (BuscaPé, a comparison-shopping site), India (ibibo, a social network) and at home in South Africa (24.com, a portal).
DST
- Created in 2005 when two Russian Internet investors, Yuri Milner and Gregory Finger pooled their interests in mail.ru, a Russian web portal
- Today the firm controls many of the country’s leading websites and account for more than 70% of page-views on the Russian-language internet
- Eclectic ownership which includes Goldman Sachs and Alisher Usmanov, a Russian billionaire, who holds 27%.
- The websites of Digital Sky Technologies (DST)
- DST’s prime investment territories include Russia and neighbors, with investments that include social networks such as VKontakte.ru and Nasza-Klasa.pl
- DST paid an estimated $800m for a 10 percent stake in Facebook. When Elevation Partners recently invested $120m in Facebook, that deal put the company’s value at $23 billion, implying that DST’s investment has almost trebled.
- Some analysts say that DST overpaid for Zynga, the world’s largest online-gaming service, and for Groupon, a website that aggregates buyers and gets them special deals. But DST may prove these critics wrong again.
- DST has experimented with a range of revenue models for social networks and online games, such as charging for services and selling virtual goods. In December it merged mail.ru with Astrum Online, a gaming firm—in effect forming a Russian equivalent to China’s Tencent. Free communication tools such as instant messaging are creating the audience that then pays for other services and virtual goods, according to the company.
Tencent follows suit?
China’s Social Media giant, Tencent is interlinked with both DST and Naspers. For those unfamiliar, Tencent is the Shenzhen-based company founded in 1998 that has grown revenue to $1.8 billion in 2009. Although best known for QQ, a popular instant-messaging service with 567m users, much of its profits come from online games and a virtual currency, called Q coins. Users purchase this with real money and use it to buy digital wares, such as virtual weapons to increase the powers of their avatars.
- Tencent bought 10 percent of DST in April for $300mn (Giving DST a valuation of about $3 billion)
- Tencent has an interest in the Indian arm of MIH, Naspers’s internet division.
- Tencent may be following the Naspers and DST in overseas investment, having purchased a minority stake in Vietnam’s VinaGame.
h/t to David Tiltman and Arun Sudhaman
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Speech in Tokyo at Foreign Correspondents’ Club of Japan
In Tokyo for a week and speaking at the FCC of Japan on Monday. Please join! Details below and on the FCCJ website. Planning to discuss the below topic, but make it highly interactive, based on what people in the audience want to discuss.
Professional Luncheon
Thomas Crampton
Asia-Pacific Director of 360 Digital Influence, Ogilvy Public Relations
Worldwide
12:30-14:00 Monday, August 30, 2010
(The speech and Q & A will be in English)
Getting Business Results from Social Media : Digital Influence & Asia
How are companies and individuals using social media to communicate, buy, sell and interact in this new digital age? What does a former award- winning journalist turned ‘digital influence’ strategist see as the major changes shaping communications and commerce in Asia?
Thomas Crampton, Asia-Pacific director of 360 Digital Influence for Ogilvy Public Relations Worldwide, heads a team stretching across 23 cities in 15 Asian territories that helps companies conceive, develop and execute strategies in Social Media.
Find out how the firms and individuals you cover are using social media. He will show how companies ‘listen’ to on-line conversations, plan influencer maps and execute social media engagement. As a former journalist, he is uniquely qualified to talk about how digital influence has changed the way news is made, gathered, shared and disseminated by companies and individuals.
Prior to joining Ogilvy, Crampton spent 18 years as a globetrotting newspaper correspondent, mainly for the International Herald Tribune and The New York Times, reporting from five continents and dozens of countries. He writes a widely read blog, thomascrampton.com, and is a frequent keynote speaker and moderator at high profile conferences around the world, from the World Economic Forum in Davos to Le Web in Paris.
Please reserve in advance, 3211-3161 or http://www.fccj.or.jp (still & TV cameras inclusive). The charge for members/non-members is 1,350/2,300 yen for the sandwich plate (tandoori chicken wrap with cucumber raita,
bean sprouts, coriander, red onion, cashew nuts) and 1,700/2,600 yen for the hot plate (baked grouper with herb crust, lyonnaise potatoes, spinach, baked tomato & herb oil), non-members eligible to attend may pay in cash. Reservations canceled less than one hour in advance for working press members, and 24 hours for all others, will be charged in full. Reservations and cancellations are not complete without confirmation.
Professional Activities Committee
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Infographic of Social Media Equivalents in China
Our China Social Media team put together this infographic to explain some of China’s Social Media equivalents. Any major categories or companies missing? Put your suggestions below in comments.
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In China: $184 for a Virtual Dragon
In China, if you spend US$184 on your credit card you can now get a virtual dragon. For US$147, you get a virtual horse.
In what may be the first of its kind, a social network has linked up with a bank’s loyalty program: Chinese
social network Kaixin001.com and China Merchants Bank this week announced the Kaixin Credit Card (Happy Credit Card).
For those not aware of the growth of virtual currencies in China, they have become a shadow economy important enough to attract the attention of China’s financial regulators. As I have written previously, virtual items – avatar outfits, animals, decorations etc – are a major source of revenue for social networks in China and Japan.
Instead of airmiles or points for a hotel visit, cardholders get one Kaixin credit for every RMB20 (Roughly US$2) spent on the card. Until July 31 2011, card owners can exchange their Kaixin credits for Kaixin coins at an exchange rate of 50 Kaixin credits for eight Kaixin coins. (Eight is a lucky number in China)
Kaixin coins can be used to buy a dragon (12 coins or US$184/1250RMB spent on the credit card); a horse (8 coins or US$147/1,000 RMB spent on credit card) or hire a garden keeper in Happy Farm for a month (5 Kaixin coins per month) or a range of other small gifts that cost 2 to 3 Kaixin coins.
As part of the launch, China Merchants Bank has bombarded current cardholders with emails to encourage them to become fans of China Merchants Bank on Kaixin001.com, offering Kaixin game cards to people who register as a fan from August 17 until the end of the year.
Currently, China Merchants Bank has 397,219 fans.
h/t to Xie Qing.
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Foursquare for Business: A Strategic Framework
This slide was created for our training about how to use Foursquare for Business, done in partnership with The Wall Street Journal and GoToWebinar.
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Ogilvy On: Foursquare for Business (The Slides)
Here are the slides from the latest presentation by our team at Ogilvy, presented as part of the series done with The Wall Street Journal and GoToWebinar on Social Media for Business.
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Google Publishes Censorship Status in China
Google now shows which Google services are blocked in China. Updated daily, status is assessed by geographically diverse servers that are used to monitor connection capability. As mentioned in another recent post, another service I recommend for see censorship status in China is Herdict.
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WoZai: China Twitter Clone, Built 1 Celebrity At A Time
Twitter clones are all the rage these days in China, but operating a Social Media platform can be tough in the country that blocks Twitter along with YouTube, Facebook, Slideshare and others.
David Liu runs one of the China-based, Twitter-like platforms, WoZai, so I asked him how he will break out from the pack of clones to set himself apart in the world’s largest Internet market.
David emphasized that he is taking a different route to getting early adopters. Instead of focusing on general users, WoZai’s strategy is to help celebrities and businesses set up communities and followings. Celebrities and businesses in China, Taiwan and Hong Kong will build virtual mailing lists to increase awareness and engagement.
Similar to Twitter, WoZai’s homepage will be available in traditional and simplified Chinese to attract the largest audience. For all his ambition, however, David does not expect WoZai to become a central platform for users, so has built in functionality for cross-posting from Twitter and other third party applications.
As with Twitter, WoZai has a 140 character limit, but because Chinese characters represent single words, much more can be expressed in 140 characters. WoZai is pushing for a mobile audience as well and is being designed to integrate with current Twitter mobile apps on Blackberry, iPhone and other platforms.
In targeting the mainland, WoZai is making the service as “China Friendly” as possible and clean enough for Beijing authorities.
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Foursquare China Clone: Jie Pang
Like many other foreign Social Media platforms, Foursquare is blocked in China. (Check out Herdict to see what is blocked.)
The result is that people visiting with a non-China phone, such as me, can easily become mayor of many locations. That said, there are locally created options for people in China who are eager to Check In.
Among the current Foursquare clones in China are: Wan Zhan, Si Wang, Zai Nar, Bedo, Jie Pang, Da Zhong Dian Ping. In addition, similar services are coming online from: China Mobile, Tencent, Sina.com, Baidu.com. Renren.com, Kaixin001.com and Kong.net
A few days ago Jie Pang sent over some slides about their service and Jeremy Webb, a colleague at Ogilvy, did an interview with Jie Pang’s founder, David Liu (All below)
h/t to Tim Ho for creating the Foursquare China badge.
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Social Media: Chinese Love To Engage
My colleagues in OgilvyOne China recently released OgilvyOne Connected, a report that may surprise those not aware of the incredible levels of engagement within China’s Social Media.
The intention was to look at how Chinese consumers use Social Media to interact, both with each other and with brands.
The report assigns percentages to the different ways in which consumers in China interact online.
OgilvyOne’s research found a large number of Chinese social media users are Initiators, with 26% of all Chinese social media users regularly starting conversations, creating content and publishing their opinions online. These users are also a common starting point for new ideas, services and products.
A further 29% of Chinese social media users are “Commenters” — people who may not initiate, but who do react and comment on other people’s views. They are also the “accelerators” of new ideas, giving them momentum and wider acceptance.
The largest group, comprising 45% of social media users, are “Gawkers” — those who quietly browse, observe and look for entertaining ideas and brands that are already popular.
These findings of high engagement in China mirror Forrester Research’s Social Media Technographics from several years ago that found 13% Creators and 19% Critics within Social Media in the US, compared with 40% Creators and 44% Critics in China. (Forrester’s Creators and Critics map roughly to OgilvyOne’s Initiators and Commenters).
OgilvyOne’s Research methodology: From February to April 2010, China Polling administered online, self-completed questionnaires to Chinese social media website across 71 sites in different categories. Over 5,000 people completed the survey, of which, 1,519 were qualified samples (anyone who used social media sites the day before and those who completed the questionnaire in its entirety). Panelists were also drawn from random samplings on 12 major social media websites such as Kaixin, RenRen and others via advertising and from China Polling‟s national panel of 400,000+ participants.
h/t to my colleague at Ogilvy, Jeremy Webb who wrote about this first on our Ogilvy team blog, Asia Digital Map.
OgilvyOne Connected (Original Report)
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How To: Use Foursquare for Business
Here are the slides from the latest presentation by our team at Ogilvy, presented as part of the series done with The Wall Street Journal and GoToWebinar on Social Media for Business.
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iPhone4 Launch Schedule for Asia-Pacific
Can’t stand the wait? Here’s a guide for the iPhone rollout for much of the Asia-Pacific region. Sorry Laos, no plans for a launch yet! Click on the “more” link below to get maps showing the operators offering the iPhone4.
This post was inspired and based on initial research done by Jon Russell in this blog post.
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Thomas Crampton was a correspondent for the International Herald Tribune and The New York Times for more than a decade, reporting from five continents, writing a column on Asia and covering Asian politics, economics and culture. Currently based in Hong Kong, he writes here about China, the Internet and New Media seen from Asia, while also advising companies on digital communication strategies. For more information click here...
