MySpace's Slow Start in China

On June 13, Luo Chuan, chief executive of MySpace China, told reporters in Shanghai that the new Chinese version of News Corp.'s (NWS) popular social-networking site aims to launch an instant messaging (IM) service "as soon as possible." Local scribes took him at his word. The Chinese media began reporting that MySpace China was calling its new IM product "ASAP." MySpace China quickly issued a clarification explaining that the company had not actually decided on a name yet and cited a communication failure for the mistake.

The snafu was symptomatic. After months of intense speculation, MySpace had launched its Chinese-language site on Apr. 27, marking the social-networking giant's entrance into the second-largest Internet market. MySpace China may want China's 144 million Internet users to think of it as a local company rather than just another part of Rupert Murdoch's global media empire, but the ASAP incident demonstrated how much work the company's executives have to do as they try to establish the site in China's crowded Web 2.0 world.

Indifferent Track Record
The Chinese site is operated by MySpace China, which secured funds from MySpace Inc. as well as Boston-based venture capital firm International Data Group and China Broadband Capital Partners, an investment firm managed by former China Netcom CEO Edward Tian. Spearheaded by Wendi Deng, Murdoch's Chinese-born wife, the company is run by Luo, the 38-year-old former head of Microsoft's (MSFT) MSN division in China.

A high-powered lineup. But U.S. Internet companies don't have the best track record in China. Despite their deep pockets and success elsewhere, for instance, both Yahoo! (YHOO) and eBay (EBAY) spent years vainly trying to win over Chinese users. They ultimately gave up and entrusted their Chinese operations to local partners.

MySpace China declines to disclose the number of registered users. However, according to a report by iResearch Consulting Group, a Shanghai-based firm specializing in the Chinese Internet sector, MySpace China forecasts the number of registered users to grow at an average of 75,000 new members per month.

The biggest problem, according to Cao Junbo, vice-director at iResearch, is that MySpace China has yet to localize its products and services to suit Chinese users. "The current site is just a literal translation of MySpace International," says Cao. "There is lots to be improved in terms of localization."