Is China exporting a dotcom bubble?

By George Chen
April 21, 2011


By George Chen
The opinions expressed are the author’s own.

“Will you marry me, Nasdaq?” that may be the message is keen to send to the Nasdaq and potential investors., an online dating service founded by a student of the Journalism School of Fudan University in 2003 and whose name means “a good destiny of love” in Chinese, today applied for an initial public offering in the United States. It’s the latest in a series of Chinese Internet technology and social networking companies to apply for a U.S. listing in recent months.

Now, I’m not a chartered financial analyst or Internet industry expert, so I just want to look at this wave of IPOs from a more personal perspective. First of all, I do believe there’s a reason behind the current rush of listing applications; it’s not mere coincidence!

The financial crisis changed the global landscape for many sectors, not only the financial industry but also many consumer-driven services. Wall Street investors have long been worried about the performance of traditional media companies such as the New York Times Co, while Google and Apple are already too expensive for some. and, clones of YouTube and Facebook in China, naturally sound like a more comfortable investment solution to many Western investors who may have missed the previous gold rush for Google and Apple and are looking for something similar with a cheaper price tag.

Thanks to public relations agencies and global media outlets, once you give a nickname like “the Facebook of China”, investors have a tendency to be wowed no matter how much they know of the differences in business models between and Facebook, or about the way really works and its impact on Chinese users.

Let me suggest, dear investor, that before you subscribe to the IPO, you register an account and post a message – by the way, be careful you don’t  post anything politically sensitive or your post will likely disappear rather quickly  – or set up an event and upload some photos to share. User experience is important before deciding to pour big money into the “Facebook of China”.

If you don’t speak or write Chinese, such a test could be challenging. How about asking a friend in China how they feel about Don’t just ask the banker or asset manager trying to sell you the IPO, you need your friend’s personal feedback. In my not so financially professional view, that could be more important than reading through hundreds of pages of IPO prospectus.

Of course, I’m not just picking on You should do the same for any of the upcoming China IPOs , including There are many stories of successful love and marriage on, however, none of them involved anyone I know of. says it operates the largest online dating platform in China and had more than 40 million registered users at the end of March. However, only 4.74 million of those user accounts were active, on average, during the first quarter of 2011 and less than 1 million of them were paying accounts. This dating site is seeking up to $100 million from a Nasdaq IPO.

“Don’t be fooled by the apparent prosperity of the industry. What is important is how much you can achieve … and whether your products are attractive. So don’t be dazzled by sudden changes in the market, which is on fire,” said Robin Li, founder and head of China’s largest search engine Baidu, which has a much bigger market share than Google in the world’s No.2 economy.

When announced its IPO plans, Chinese media were overjoyed. Numerous newspapers carried similar headlines proclaiming that, from China, would become the world’s first big social network IPO. It does make me feel that is now more powerful than Facebook, at least for Chinese media.

As my editors often warn me when I report breaking news, “First be right, and then be first.” The same should also apply to the likes of

George Chen is a Reuters editor and columnist based in Hong Kong.

Photo: An employee is seen through a glass wall as she walks past the logo of above the reception desk at the company’s headquarters in Beijing, December 9, 2010 REUTERS/Soo Hoo Zheyang

One comment

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[...] See the article here: Is China exporting a dotcom bubble? | George Chen | Analysis … [...]

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[...] Full article on blog.reuters, Reuters, 21/04/2011 [...]

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Look for an enemy and we’ll create one. Especially with sweeping generalizations, falsehoods and ridiculous statements with nothing to back it up.

Weapon of war? Because they are poor and work for pitifully small wages because they have to?

Unconcerned by long-term? I hear they plan out farther than we do, we are all short-term.

Devalue other currencies????? We are criticizing them of not revaluing theirs stronger fast enough!

Historically, they built a fantastically offensive weapon called a WALL. But it didn’t work and nomadic tribes conquered and ruled them more than they ruled themselves the last thousand years.

Empire built on blood, maybe, or more like starvation because they’ve had some massive ones. But don’t do business with the US either then, think: native americans, slaves, takeover of half of mexico, filipines, vietnam, iraq, etc. etc. etc.

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[...] Remember matchmaking website, which recently listed on the Nasdaq? These days it’s in trouble with investors and users, who say its service may not be as good as its claim to be China’s No.1 online matchmaking site suggested. Read my previous column “Is China exporting a dotcom bubble?” here. [...]

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[...] Maybe what the two companies should really blame is not the volatile market but the investment bankers they hired who should have gotten them to list faster and earlier. Remember the match-making site called It may be a good idea to revisit my previous column “Is China exporting a dotcom bubble?“. [...]

Posted by Put a pause on China concept stocks | George Chen | Report as abusive