Douban reforms budgets, weighs listing

By Zhang Hongpei Source:Global Times Published: 2017/8/6 21:28:39

Douban, a Chinese social networking website, said Saturday that it will implement independent budgets for each of its business lines during the second half of 2017 and weigh an overseas IPO.

Founder Yang Bo said in an internal letter that Douban will specifically focus on two goals -- accelerating the growth of app users and speeding up revenue growth, domestic news outlet reported.

The company will also eliminate low-profit products and operations.

"Each business line will start an independent budget, managing each output and cost … Priority should be put into targets and results instead of effort and action," Yang said in the letter.

As the core brand and team for the company's commercial transformation, Douban Time, an online product launched in March, has generated revenue by inviting noted  industry professionals to lecture on some topics, for which listeners will pay.

Revenue of Douban Time, currently including nine columns, reached 1 million yuan ($148,700) within five days of its launch, data from Douban showed, reported.

"Paying for valuable content online is becoming increasingly accepted by more users, and in that sense, Douban is now taking the right business path," Liu Dingding, a Beijing-based independent technology analyst, told the Global Times on Sunday.

Douban, the Chinese Internet community where many young people can share and follow their tastes in books, movies and music, was founded in 2005, and it had accumulated 150 million users by the end of 2016, with monthly active users reaching 300 million, said.

"Douban has definite advantages in its user base and user stickiness as well as its influence, which should have been tapped," Liu said.

But Liu said the company's problems lie in the operating team, which is a group of young people who love music and the arts but are chasing a dream rather than pursuing a business plan.

Since its foundation, Douban, "the spiritual corner" of the Chinese Internet as labeled by its founder, has found it tough to turn a profit despite many remakes and transformations.

It raised $50 million in a round C funding in September 2011 after several fundraisings.

Nonetheless, Liu predicted that Douban would conduct an IPO during 2018-2019, which would be an IPO "window" for several Chinese Internet companies in the US.

Douban's market valuation could exceed $1 billion, according to Liu's assessment.

Posted in: COMPANIES

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