In China, Facebook social networking services are banned by Chinese authorities from developing an online presence in the country. With over 500 million registered users in over 25 countries, Facebook as the largest social networking service in the world can’t compete on level playing ground with the quickly-rising new social network that’s based in China. Renren.com currently has over 160 million registered users and recently announced plans to make an Initial Public Offering (IPO) later in the year, likely before fall 2010. The IPO stands to catapult the company even further in popularity and in the social network community. As a publicly traded company, Renren.com will gain more industry attention and the opportunity to find more investors. Facebook has gone on record saying that they will likely offer an IPO at least by 2012.
Renren, which in English means “everyone” was founded in 2005, one year after Facebook, and in 2006 was sold to a privately owned fund sponsor named Oak Pacific Interactive. Renren.com plans to raise over $500 million from the public offering. This type of public offering is the first of its kind to be used from any of the major social network or media sites available, including Facebook. The company plans to use the public offering money to further networking expansion and brand marketing.
Investors are interested and eager in investment opportunities with the growing Chinese social network which has seen a 100% increase in advertising revenue from 2010, and closer numbers from 2009. Although there has been no reported valuation on the company, Renren.com has been able to secure the services of Morgan Stanley, Deutsche Bank AG and Credit Suisse Group for IPO consultation and assistance on the new venture. Currently, Facebook’s valuation stands at $50 billion.