Chinese social networking site Renren sees opportunity in mobile platform and plans to invest a significant amount of its 2012 investments in mobile, according to its CEO Joseph Chen.
In a statement Friday announcing its fiscal year 2011 financial results, Chen, who is also the company's chairman, said Renren will be setting aside "a large portion" of its investments this year on mobile. He noted that 38 percent of users accessed the Chinese social networking site via their mobile phones each month. Among this user base, over 60 percent accessed Renren through smartphones, he added.
The company will also be pouring investment into its group-buying site Nuomi, and video site 56.com which it acquired in September. "Our long-term strategy will remain to focus on product innovation and further evolution of Renren's social networking services on a technology-driven communication platform," Chen said.
For its financial year 2011, Renren reported a net income of US$41.3 million which included proceeds from the US$50.9 million sale of eLong securities. This was a gain compared with a net loss of US$64.2 million in 2010.
Online advertising revenue in 2011 totaled US$59.6 million, a year-over-year increase of 86.3 percent. The company attributed the climb to more advertisers using the social network as an advertising platform.
Revenue from Internet value-added services (IVAS) was US$58.4 million in 2011, an increase of 31 percent percent from 2010. In this segment, online games accounted for US$42.3 million, a 22.9 percent jump from the previous year. Renren's social buying platform, Nuomi, which was launched in June 2010 brought in revenues totaling US$6.5 million.
The Chinese company went public in May 2011 which Chen said brought additional brand recognition and funds for Renren. In a previous ZDNet Asia report, an analyst commented that Chinese social networking sites that had gone public generated much hype but were not profitable. The analyst added that this market segment would see steeper competition in China.