Ex-Googler Turns Virtual Gifts Into a $61 Billion Business
An anonymous reader quotes a report from Bloomberg: In China's popular online-streaming industry, virtual gift-giving is big. You can send your favorite live performer anything from a rose for 5 yuan (80 cents) to a space rocket for 500 yuan. The present is just a symbol, but the money is real -- and that's what's made Kuaishou Technology so successful. [...] Co-founders Su Hua and Cheng Yixiao will each be worth more than $5.5 billion, according to the Bloomberg Billionaires Index. Su, a native of China's central Hunan province, studied computer programming at the prestigious Tsinghua University before joining Google in Beijing in 2006. There, he earned about $23,000 annually, eight times the country's average salary back then. While he said he was "extremely happy," a stay in Silicon Valley inspired him to start his own business, according to Kuaishou's biography. The 38-year-old quit Google during the global financial crisis to start his own video-advertising venture, which didn't come to fruition. After a short stint with Baidu Inc., he got acquainted with Cheng in 2011 and they soon decided to pair up. In 2013, the duo transformed the Kuaishou app from a GIF-maker to the social-video platform it is today, initially gaining popularity with its videos of life in rural China. With the rise of ByteDance's Douyin, the Chinese twin app of TikTok, Kuaishou broadened its appeal, luring influencers backed by talent agencies and pop stars like Taiwan's Jay Chou. Along the way, it sped up monetization by creating ad slots and in-app stores for brands and merchants. While virtual gift purchases are still its bread and butter -- they make up almost two-thirds of its revenue -- the company is delving deeper into higher-margin businesses like e-commerce and online gaming. Its sales rose almost 50% to 40.7 billion yuan in the first nine months of last year, according to the IPO prospectus.
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