Leader of the pack
By LIU BAIJIA (China Daily)
Updated: 2006-04-17 06:56

Profile of Wang Leilei

* Born in 1973 in Beijing
* Graduated from Tsinghua University in electronics engineering.
* Worked at China Great Wall Computer Software Co Ltd in 1996.
* Acted as big account manager with a futures agency from 1996-98.
* Created and ran an information technology system intergration company in Beijing from 1998-99.
* Joined, which later changed its name to Tom Group, and was appointed as managing director for its Internet business in the Chinese mainland, now called Tom Online.
* Appointed CEO and executive director of Tom Online, which was listed in Hong Kong and New York in March 2004.
Qinhuangdao, a coastal resort city 320 kilometres from Beijing, is the destination for Wang Leilei and his colleagues every summer.

The chief executive officer (CEO) of one of the largest Internet operations in China is currently planning this year's expedition from the capital for his workers.

Since 2000, the bike ride has become an annual team-building exercise, and a test of stamina and determination two qualities Wang has displayed in helping to turn Tom Online into the success it is today.

This year, the exercise may also provide Wang a welcome break from recent media attention.

In the past month it has been said Wang would take over the leadership of eBay's Eachnet, the Chinese arm of the US online auction giant, and that Tom Group would buy stakes in the leading Chinese Internet portal Sina Corp and take control.

Wang, in leading the Internet operation of Hong Kong-based media conglomerate Tom Group, is often the focus of media reports because of the company's success.

In March 2004, Tom Online listed on the Growth Enterprise Market in Hong Kong and the NASDAQ stock market in New York. It reported revenue of US$48.12 million in the fourth quarter of 2005, 40 per cent higher than the same period of 2004, beating its forecast of US$46.75-47.75 million.

With the figure, Tom Online ranks fourth among all 14 listed Chinese Internet companies, coming after only online game operator NetEase, instant messaging service provider Tencent, and the top Chinese Internet portal Sina in terms of revenue size.

"We have had to work hard with our own focuses and do things persistently," says Wang in an interview with China Business Weekly.

Tom Online started as an Internet portal business in 1999, acquiring scores of Internet websites since then, and becoming an Internet service provider, selling dial-up cards to users, after the dotcom bubble burst in late 2000.

However, that business was not sustainable because more and more people began to endorse broadband Internet, and telecom operators were taking the lead.

Despite the short trial on the Internet connection business, Wang did build a partnership with Chinese telecom operators, so when the mobile short messaging service (SMS) began to take off in 2001, Tom Online quickly became a leader in the market.

The real change came in 2002, when Tom Online signed a contract with the popular Taiwanese singer Jay Chow, who was and still is hugely popular with young people in the Chinese mainland, for him to become its marketing spokesperson.

It also got the rights to use Chow's songs in its wireless services, such as ringtones and interactive voice response, which allows mobile users to dial a number to listen to songs, jokes, and information.

At that time, few firms in the wireless value-added service business realized the huge market potential, and few record companies knew that broadcasting songs on mobile phones could be very profitable, so the cost of signing Chow was relatively low at about 10 million yuan (US$1.2 million).

Wang, knowing that China Mobile was also going to sign Chow, chose to link up with the country's dominant mobile operator, which proved to be very successful, because when China Mobile was promoting Chow for itself, it was also promoting for Tom Online.

After that, entertainment and focus become two catchwords for Tom Online.

When many other mobile service providers were focusing on SMS in 2002 and early 2003, Tom Online turned most of its energy to the multimedia messaging service (MMS), wireless application protocol (WAP), ringtone downloads, and entertainment contents

Trying to focus whole-heartedly on wireless value-added services, Wang resisted the temptation of online games until 2003, when the online game operator Shanda Interactive Entertainment grew quickly in its business size.

Under pressure from its parent company Tom Group and the attraction of the high profits of online games, Tom Online launched the shooting game Karma Online, imported from South Korea, but Wang soon realized it was not where his firm's strength was and decided to give up on the operation.

However, more attempts are possible in the future.

"Online gaming is one business that has tempted me most in the past year," says Wang.

When Tom Online was split from Tom Group and made a separate public offering on Hong Kong's Growth Enterprise Market and New York's NASDAQ in March 2004, the company did not get much favour from investors and analysts because of its high costs of marketing and content procurement.

The company licensed music contents from Sony Music, EMI, Warner Brothers, BMG, and Universal in 2004 and formed an alliance with Warner Brothers last year, while most wireless service providers did not realize the increasing interest of users for entertainment, or chose not to buy legal contents from copyright owners.

But those investments have finally paid off. Tom Online's revenue from wireless services rose from US$300,000 in 2001 to US$162 million in 2005 and it also turned from net losses of US$23 million to net profits of US$45 million in the period. Its stock prices have also more than doubled in the past year to US$23.83.  

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