Renren sells off 56.com: after the bloat, only depression remains

Well-known football commentators Zhan Jun and Yan Qiang once formed a "Watchers Alliance". One of them is a Liverpool fan and the other is an Arsenal fan. These two traditional powerhouses have not won any significant championships for many years, but they have been making efforts to win the championship every year, so they have been "watching".

In China's Internet industry, there are many "Watchmen Alliance". No matter whether it is Shanda and NetEase, which once produced China's richest man, or Sohu, which is known as the "second place for a thousand years", they are all Watchmen. They have had their own glory, but now they are always "watching".

The list of this alliance should have also included Renren, which went public under the name of China's Facebook. However, with the passage of time, Renren may no longer have a place in an organization like the "Watchmen Alliance" because it no longer has the qualifications to be a "Watchmen".

Sell-off in progress

After selling Nuomi to Baidu last year, Renren has not stopped its asset divestiture. The latest news is that Renren will sell its 56.com to Sohu for a price higher than the rumored US$12.9 million.

However, I believe it will not be much higher. Compared with the US$80 million when it was acquired three years ago, Chen Yizhou, a stock trading expert, has obviously made a huge loss.

Back then, after the failure of the short video sharing service UUme, Renren took advantage of the IPO to gamble on 56.com in 2011. Before acquiring 56, Chen Yizhou admitted that he had lost count of how many companies he had acquired, and that future acquisitions would be big.

56 was the big move. At that time, Renren’s idea was to use 56’s UGC attributes to connect with Renren’s social matrix.

Chen Yizhou said, "Internet users' need to communicate and share on social networking sites is no longer limited to text and pictures. Users are increasingly interested in sharing their own original videos and communicating with friends through these original videos. The acquisition of 56.com can help Renren users more conveniently record and share their lives through videos on social networks."

On the surface, this is true, but the deeper reason is that Renren hopes to use its huge traffic and user demand to turn 56 into the YouTube of China. After all, the user demand for videos is real, and Renren believes that whoever it promotes will see an immediate increase in performance. This is also consistent with Renren's high-profile claim when it went public that it is "Facebook Zynga Groupon Linkedin" (i.e. Renren + games + Nuomi + Jingwei).

However, one fact that cannot be ignored is that although 56 has received strong support from Renren, this support has not been able to really translate into much in the content-oriented video industry, because users can also choose from options such as Youku and Tudou on Renren.

Since then, 56 has shifted its focus to the show model. Although it has received feedback on the financial accounts, it has moved further and further away from mainstream videos and deviated from the original intention of the two parties' cooperation.

Therefore, reality dictates that Renren has to sell off 56.com. There is really no need for the two parties to continue cooperating, as it will only distract each other's energy. The value of 56 to Renren now, except for some possible profits brought by the show, no longer has any strategic value and is gradually being marginalized.

As a stock trading expert, no one understands better than Chen Yizhou that for 56.com, which has lost its multiplication effect, the best strategy is to sell it as soon as possible and get back some capital chips.

Everyone’s failure—moving away from the core

Renren is constantly divesting assets that no longer have strategic value. Chen Yizhou said: "Based on the existing business model, it is difficult for the company to make money. We will undergo a thorough transformation to change the company's business model."

What was Renren's original model? We can see some clues from Renren's development in recent years.

From the business card entry and business social tool Jingwei Business Card Pass for business people, to the group buying website Nuomi, to the car question and answer website Chewen, the travel website Fengche, and the wedding website Jiexi.

Renren has been expanding its territory, and its expansion can be traced back to the change of its name from "Xiaonei" to "Renren", which means that Renren does not want to be a social networking site for students only. After the students graduate, Renren still wants to keep these users, so it has expanded these businesses to meet the needs of students who are gradually entering society.

Renren was becoming increasingly bloated, but the rapid development of Weibo and the emergence of WeChat completely disrupted Renren.

When we failed to capture groups other than students, we gradually discovered that the student groups at our base were also gradually moving away from us, who were becoming increasingly bloated, because the students did not know what we were.

In the past, it could be seen as a private space in school, a place for students to have fun and have fun before stepping out of the ivory tower. But after becoming Renren, it is less and less like that, it has become a fully social platform.

At this time, after the emergence of Weibo and WeChat, Renren’s weak advantages in hard-core innovation and product capabilities began to be immediately magnified.

The strategy of simply following Facebook was quickly defeated by Weibo and WeChat. With better alternative tools, Renren was quickly abandoned by students because it was not a place dedicated to serving them.

This is the biggest internal reason for Renren's failure. In the process of shifting from a community that is vertically oriented to student groups to a pan-social one, the cost of seemingly expanding the user base is a reduction in the closeness of user relationships, which has gradually been eroded by Weibo and WeChat. Other problems such as products and technology are also serious, but they are not the fatal reasons.

If we focus on the student group, I believe everyone will have their own place in the social world, just like Momo, which focuses on interest-based social networking. Momo is a typical example of opening a new chapter in a vertical field.

Unfortunately, there is no if. Because in the pan-social field, no one can surpass Tencent. Even products like Yixin and Laiwang, which are promoted with many resources, are struggling. You can only choose a vertical field to build barriers. Such a field means that the giants do not care about it at all. This is your survival space.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.