Top100.cn's homepage. (Photo/CFP)
From late April, internet users have been unable to access www.top100.cn — a Chinese music website co-founded by retired NBA star Yao Ming — as it has reportedly been shut down, reports Shanghai's First Financial Daily.
Gary Chen, the co-founder and CEO of the website, said on his microblog that the site had faced difficult choices and necessary shifts, since Google had suspended music search services in China in October.
The site was officially launched in Beijing in March 2006 and provided free trial and download services, based on a catalog of millions of copyrighted music files through a collaboration with global music publishers.
The website gained a good deal of attention because Google and Yao Ming, one of the biggest names in sports ever to come from China, were two of its founders.
Yao and Zhang Mingji, another co-founder, had invested US$3 million as start-up capital in the site in 2005, when Yao was at the peak of his basketball career.
Yao mentioned the website on many occasions and this naturally helped draw public attention to the venture.
The website's business model was not highly esteemed by the market, however. Hong Bo, an internet commentator, pointed out that the site had always wanted to have an exclusive business edge, but few people were interested in foreign copyrighted music. Meanwhile, it had faced stiff competition from both Baidu and Tencent Holdings for domestic copyrighted music.
Additionally, its product research and development abilities and services were inferior to those offered by its competitive rivals.
Despite this, relying on Yao and Chen's influence in the industry, the music site had successfully gained cooperation from Google to launch a new service in China that allowed users to freely download licensed songs in 2008. Meanwhile, Yao had invested US$7 million in the undertaking at the time.
Chen said on his microblog that there were three reasons for the website experiencing operational difficulties. First, Google had suspended its music search services in the market, directly causing an 80% loss in traffic flow and advertising revenue, translating into 100 million yuan (US$16.3 million) in losses.
Second, it had turned down investment from big venture capital firms twice in 2007 and 2009 for fear that the stakes controlled by the founders would be diluted. Moreover, it had turned down acquisition bids made by giants in the industry twice during the past decade.
Finally, the management team had no decision-making powers related to stake options or staff salaries, causing talent to leave the company in quick succession.
The newspaper said that investing in the music website was a starting point for Yao, who was looking to shift into the business arena. He later invested in a Shanghai basketball club as well as a wine company and was the fourth largest shareholder in a Beijing technology company before it went public, though the value of the stocks have since dipped sharply. He also invested in a private equity fund.
Among all his investments, only the technology company had earned Yao more than 60 million yuan (US$9.5 million). All his other ventures were unsuccessful.