Rumor: Chinese SNS 360quan to Shut Doors
Tencent Tech, 6/29/10
Chinese social networking site 360quan has reportedly laid off its entire staff and has already notified its employees, according to an industry source.
360quan currently has three main revenue streams: advertising, virtual items and games. Of these, advertising revenue includes brand sponsors and game advertising, counting among its clients China Mobile (NYSE: CHL; 0941.HK) and game operator Perfect World (Nasdaq: PWRD). 360quan has over 30 self-developed games, as well as third-party games. Popular games include Texas Hold 'Em, Business Tycoon, and Friends for Sale. Sources said advertising revenue accounts for approximately half of 360quan revenues.
360quan had also released its own browser, which generated income, but the browser segment later lost market share after the company cut promotion of the product.
360quan has continuously operated with losses. At the end of February 2009, 360quan laid off 60% to 70% of its staff, eliminating its design and technical staff and only retaining marketing personnel. 360quan has reportedly always provided departing employees with sufficient severance packages in accordance with Chinese laws, and those employees left without incident.
Industry sources also said that although 360quan previously obtained USD 25 mln in funding, these funds were allocated on a quarterly business and were halted in Q4 2009, and as a result 360quan has been struggling this year.
After 360quan announced the layoffs in an internal e-mail, company staff were reportedly unruffled and are awaiting specific severance package details. 360quan's website continues to operate normally.
One former 360quan employee said that despite the layoffs, 360quan could still be operated as an individually-run website.
Editor's Note: For more background on this topic, please see "360quan Obtains Third Round USD 25 Mln Funding" MD 8/22/08 issue.
Keywords: business model Internet revenue SNS 360quan profit HR loss
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