Do Bokee Layoffs Point to Blog Business Issues in China? (posted by Brad Bowers)

As widely reported, China blog service provider Bokee is laying off about 100 people, just months on the heels of a $10M round of financing from prominent U.S. VC firms such as Mobius, Bessemer, and Granite Global.

While some are saying this raises questions about the potential future of blogging as a business in China, our team at

BlackInc China just finished a research report for a major U.S. blog publisher regarding China, and came to a different conclusion.

Some key reasons to believe that there will be successful blogging busineses in

China in due time:

• China’s blogging sector is still in the early stages of development

• Blogging in China is projected to keep growing rapidly.  According to iResearch the number of bloggers in China will reach 29 million in 2007, representing a 200% CAGR from 2005 to 2007.

• China’s blog space is hampered by limited advertising sales channels, however trends point to resolution of these issues in the next few years.

Baidu recently released a study indicating that as of the end of November 2005, there were 658 blog service providers in

China.  Given this level of competition, and the nacent stage of blog-related revenue models, it seems a smart move for Bokee to reduce its staff and burn rate as it determines the best models to generate revenue and sustain the business into the future.