YY Inc.

YY Inc. is a Guangzhou-based Chinese social media and gaming company that offers users real-time online group activities - like gaming and voice communications.

As of this writing (Dec. 2012), YY is a leader in the Chinese online gaming market. Apparently YY started as a team voice tool designed by the Duowan game website team to facilitate multi-user online gaming. Duowan remains as a leading game website in mainland China - but the corporate name now reflects the importance of the social media functionality of YY.

For revenue, YY Inc. has been very dependent on users buying tokens to play games. Although the potential for other sorts of monetization exists, to date revenue from sales of gaming tokens has accounted for almost half of YY's total revenue. (And those numbers are noteworthy - YY's net revenue numbers have increased from $32.71 million RMB to $319.66 million RMB in three years.)

Besides gaming, does YY Inc. have other growth opportunities?

In 2011 YY Inc. was the biggest player in mainland China's real-time online group voice communication market (with a reported 84% market share).

Could the infrastucture that YY Inc. has built out also support a social site that filmmakers might exploit - for example, could YY develop a platform that incorporates interactivity and filmmaking?


Certainly, YY Inc. is well positioned to reach a large tech-savvy wired audience in the PRC and (should financing be required) the company's access to capital seems strong...

For example, rather than list in Asia, YY's IPO was listed on the Nasdaq on Wednesday Nov. 21st, 2012. According to YY Chief Executive David Xueling Li: "Being listed on Nasdaq [gives] us the branding that will help us go into broader markets."

Although the average stock price of US-listed Chinese companies has dropped somewhere close to 50 percent in the last year, YY Inc. is bucking that trend: YY Inc.'s stock price is up almost 40% since listing around Thanksgiving 2012.


The company had net income of ¥56.0 million ($8.9 million) in the nine months ended September 30, 2012, up from a loss of ¥83.2 million in 2011.

In addition, YY Inc. has accumulated a huge user base: According to minyanville, "YY’s free online platform has 400 million registered users who talk with each other via voice, video and text."

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