Ushi sees gold in workers

BEIJING - Ushi.cn, China's version of Linkedin.com, may break even next year as it further enlarges its user base, according to a top company official, at a time when social-networking sites for professionals try to cash in on the world's largest Internet market.

Dominic Penaloza, the co-founder and chief executive officer of Ushi, said the company will have a chance to become profitable around the third quarter of 2012 if it gets "a couple of million users" over the next 12 months, compared with the 400,000 it now has.

"There are about 40 million Internet users in China who are white-collar workers or entrepreneurs whoever gets 10 to 20 million first should be the winner of the competition," said Penaloza, a Chinese-Filipino Canadian in Shanghai.

Like other professional social networking sites, Ushi makes money from premium subscriptions, online advertising and recruiting solutions.

Penaloza said most of Ushi's revenue comes from advertisers, including Citibank NA, Dell Inc and Microsoft Corp.

Besides Ushi, many other social-networking sites - some aimed at professionals, others intended for general users - are trying to increase their footprints in China, which has 485 million Internet users.

Renren Inc, which owns China's largest social-networking site, came up with Jingwei.com in March.

LinkedIn Corp, the second-largest social-networking site in the United States after Facebook Inc in terms of traffic, established an Asia-Pacific regional headquarters in Singapore in May and said it would consider expanding into China.

The first professional social-networking sites appeared in China around 2004 but few are as popular as general social-networking sites, such as Renren.com.

"Professional social-networking sites target a niche market, which will only thrive after Internet users get more used to general social-networking site functions, which are the same as LinkedIn and Facebook," said You Tianyu, an analyst with Beijing-based research company iResearch.

"The market (for professional social-networking sites) will have much room for growth," he said.

However, Wei Wuhui, an IT observer who teaches at Shanghai Jiao Tong University, argued that online networking may not work for everyone.

Chinese people prefer to rely on familiar people to deal with social affairs, he said. Therefore, reaching out to unfamiliar contacts on social-networking sites for professional assistance is unlikely to produce results in China.

Penaloza said Ushi had just received a second round of funding, which was "a lot more" than its initial round of $1 million. Its investors include Milestone Capital, US-based Richmond Management, Li & Fung private equity and Simon Murray & Co.

Ushi covers 85 percent of the professionals in the venture capital and private equity industries, said Penaloza, who was formerly a private equity investor.

China Daily

(China Daily 08/26/2011 page16)