QZone Turns Ten: Eight Questions About a Social Network That Is Still Going Strong

You may have stopped using it, but QZone has not stopped growing.

When did you last open QZone? Judging by the ages of its users, if you were born before 1990, you probably no longer look at it even once a month.

QZone went live on June 6, 2005, and has now been around for ten years. Among social networks still running today, it may be the oldest after Facebook and Douban, though the three differ enormously in scale.

Over the past decade QZone's rivals have come and gone, and its users have drifted from one new platform to the next. But QZone has stayed, and it has probably become a very different place from the one you remember. On May 1 this year, for example, its users uploaded more than 650 million photos in a single day.

It still holds hundreds of millions of young Chinese internet users. Even now that WeChat has matured, the number of people who use QZone on their phones each month has kept climbing, to 568 million, 19 million more than WeChat.

Over the past year, QZone's moneymaking has even become a hot topic. Since the Xiaomi Redmi at the end of 2013, more than half of China's phone makers, including Meizu, Huawei, HTC and OnePlus, have launched a phone on QZone. Before that, the first places they sold phones were Weibo and WeChat.

How did QZone begin?

At first, QZone was not a social network at all.

In April 2005, a small team inside Tencent started a closed beta of a product called "Space Nest," recruiting testers with widely circulated "calls to heroes." That slightly cutesy name belonged to QZone's predecessor. The man in charge was Lin Songtao, who ran QZone for the next three years and now heads Yingyongbao, Tencent's mobile app store.

Liang Zhu, who took over from Lin in 2008 and now heads Tencent's Social Platform business unit, recalled the beta to QDaily last week: "This was probably the first viral marketing we ever did. Word spread, and the beta invitations, the 'calls to heroes,' could even be sold for money. More and more people wanted in. Eventually the beta got so popular the servers couldn't cope. So we built a little web game, 'Catch the Ginseng Fruit,' to make beta users more willing to queue and wait to log in."

That year QQ had 490 million registered users and about 200 million active users. Tencent grouped QZone with QQ Show and QQ Pet as "virtual products." Meanwhile, QQ Show had begun earning value-added revenue for Tencent through the company's usual monthly subscription, known as Red Diamond. QZone, by the same logic, would be the next source of growth.

Facebook had appeared in 2004, but at birth QZone took its cue not from social networks but from blogs. "In 2005 China's blog market was taking off. How would it be divided up? We saw two competitors: Sina Blog and MSN Spaces. But Tencent didn't yet have the media reach it has today, so we had no edge in content. MSN Spaces, though, had modules users could mix and match freely. The decoration feature QZone started with was very much like that, and we soon saw it could make money." To this day, space decoration remains at the heart of the Yellow Diamond membership.

What is QZone actually for?

It is hard to say what QZone is for. It has been a virtual product, a blog, a social network and an open platform; it has never stopped changing.

In 2005, many users treated QZone as another QQ Show. This girlish page was most likely made by a Yellow Diamond member. For a middle-school student, spending their parents' money hurt; buying decorations as a bundle was a little cheaper, and that seemed to ease the conscience.

That year a crop of social products appeared in China: Renren, modeled on Facebook; 51.com, backed by the American firm Sequoia Capital; and Douban, which ran its first ad in the magazine Dushu. That September, Facebook itself was only just opening to the general public.

In 2007, QZone began testing a "little notes" feature. Much like today's Weibo direct messages, it made the product more social. But opening the home page still brought up articles, so it felt more like a blog.

The shift began that year. "At first we put an 'information center' on the home page. The feed of friends' updates was hidden on a second-level page, mainly because we worried users wouldn't take to it. But when we moved it straight onto the home page, users responded well. Step by step we made the feed the focus of the home page. That is the 'personal center' with updates you see the moment you log in to QZone today." That year, Tencent's earnings report disclosed QZone's active users for the first time: 102 million.

In 2008, QZone turned fully into a social network, with Shuoshuo (status updates), blog posts, albums, a message board, a music box and more. Wanting to copy Facebook's feed, QZone cautiously tucked the feature away inside a friends circle.

Liang Zhu also described discussions between his colleague Lin Songtao, then in charge of QZone, and Tencent CEO Pony Ma: "When they saw a format like Facebook's feed, they saw it mattered both to users and to advertisers. But which Tencent product should do it? QQ could, and so could QZone. They thought about it for a long time and finally decided QZone would make the change."

If you haven't logged in to QZone for years, this 2009 interface is probably the one you remember. Friends' updates sat in the middle of the page. It was the last year "Shuoshuo" was still called "Mood." QQ Farm had already trained many users to get up in the middle of the night to steal vegetables, and the parking-spot game followed. You may well have been hooked on both.

In 2010, QZone began turning into a platform, opening interfaces to third-party software to distribute apps and send them traffic. You could also see more and more ads. On the social side, a timeline, friend intimacy scores, photo updates, short videos and more arrived one after another.

In 2013, QZone hosted the launch of the Redmi phone, and more and more companies came to treat it as a promotion platform. Quite a few people began pre-ordering phones on QZone, and even buying new albums by Jacky Cheung, the "God of Songs."

Even after this long tour of everything QZone has tried, it barely registers as a product in its own right. If you use QZone, you probably find it easiest to get there from QQ, and it would never occur to you to log in on its own web page or download its separate phone app. And as an open platform, Tencent's Guangdiantong ad service needs QZone to deliver ads, and QQ Connect needs to open QZone's sharing interface...

How did QZone get where it is today?

According to a report from China Internet Watch, in 2005 and 2006, when QZone existed as a personal journal (a blog), it gained 1 million users in total. Even counted as a virtual product like QQ Show, the financial reports for those two years show it was still adding to the company's costs.

In 2007, its daily page views passed 100 million. In September 2009, the number of people using QZone every month passed 300 million.

How did QZone grow so fast, from a million users to more than 100 million active ones? QQ. As with most Tencent products, QQ was QZone's first source of users. Even today, when QZone chief Liang Zhu talks about the move to mobile, he still says, "You can view QZone from QQ too. And we've also built our own phone app." The latest figures, for the first quarter of 2015, show QQ with 832 million active users, 603 million of them on mobile.

QQ was not always this strong, and it met plenty of competitors along the way. Several big Chinese companies had their own instant messengers, such as Sina UC and Baidu Hi. Those two lived mostly inside their parent companies' own product families, such as blogs, Tieba and Weibo. That meant, for instance, that if Weibo had failed to take off, Sina UC would have gone nowhere. The reason they survive today is probably that their companies' employees are required to use them for internal communication.

In 2003, Microsoft brought MSN to China. It was a crisis for QQ, which nearly lost its white-collar users. QQ Show had just launched and was not yet profitable. Tencent, not yet listed, still had to raise money to keep running. In the end Tencent launched an enterprise edition of QQ. Having beaten its most dangerous rival, QQ began to grow into an ecosystem, the "platform" idea Tencent people so often talk about internally.

Backed by an enormous user base, that ecosystem is hard to break. Even Alibaba, powerful as it is today, tried in 2008 to push Taobao Wangwang (now AliWangwang) on Taobao, and failed.

You rarely see QZone promote itself. With QQ growing like this, it has little need to grow on its own. Put another way, even if it ran online and offline events and brought in some users, they would be nothing next to the users converted from QQ, so why add the cost?

Who have QZone's competitors been?

Over the years, QZone's competitors have changed round after round.

Competing with blogs such as Sina Blog and MSN Spaces, QZone borrowed from its sibling QQ Show and brought similar decoration into blogging. Decoration items became the most valuable thing in QZone, and still are.

Before QZone, 51.com, Kaixin001 and Renren, which opened entry points to third parties, all enjoyed a spell of popularity thanks to social games. Vegetable stealing, parking-spot grabbing and friend trading all started on Kaixin001; the others followed, QZone among them.

Once open social tools like Weibo appeared, QZone looked socially uninfluential by comparison. It brought in media content such as Tencent News and also built a reading center.

Every redesign it made was closely tied to what its competitors were doing.

What crises has QZone survived?

Setting aside the period when it failed as a personal blog, QZone's first head-on competition as a social network came from 51.com. Founded in August 2005, 51.com was the same kind of product as QZone. Its business model, social networking plus games, was unique at the time. That was exactly what attracted Giant Interactive to invest that year. That same year, 51.com, which gave third-party developers a bigger share of revenue, even considered buying Kaixin001.

Kaixin001, which rose on vegetable stealing and parking-spot grabbing, ran the same model. "Later we teamed up with 5 Minutes and built QQ Farm. Then we built QQ Parking. What we wanted was higher-quality social games, with flashier design, to win users over first," Liang Zhu told QDaily, describing how Tencent handled the competition. "Renren made friend trading a hit, and QZone followed with that too."

In the end, QQ won these fights. But the social-network war of 2008 had already sown the biggest crisis for Tencent's QQ products: the move to mobile, though talking about it then still sounded premature. The PC side had poured effort into opening up to third-party apps. In that situation, "we couldn't cover that many web games. Tencent's game-making skills all came from the PC side," Liang Zhu said, recalling those rounds of competition.

Before 2012, all of Tencent's phone products, whether QQ, QZone or maps, sat in the Wireless Business Department. That was then common practice at Chinese internet companies: put every mobile product in a separate department instead of letting it evolve alongside the desktop version. The result was features that fell out of step.

More important, the mobile social market was changing. If you had to grow by adding contacts one at a time, it was still hard to challenge QQ, the established instant messenger. But in 2010 Kik Messenger changed that model: it matched your address book to find your friends, so people no longer needed to swap QQ numbers. Compared with older tools like QQ and MSN, this built a social network much faster.

At the end of 2010, Miliao (Mi Talk), a Kik imitator, launched in China and won a million users in under four months. But Tencent struck back not with Mobile QQ but with WeChat, born in 2011.

In 2012, Tencent reorganized and abolished the wireless department; Mobile QQ and Mobile QZone were merged into their respective product teams. In the second quarter of 2014, after Mobile QQ 5.0 launched, mobile active users rose 45%, with monthly active users reaching 521 million, level with WeChat.

Under the Wireless Business Department, QZone's mobile version was still an add-on to QQ. Its so-called mobile effort amounted to adapting to the bandwidth of mobile data, simply moving QZone from the PC onto the phone.

In the 2012 reorganization, Tencent turned its former business departments into business groups, and QZone went into the Social Platform business group. Mobile development, once handled by the Wireless Business Department, was for the first time done by a team QZone built itself. Introducing his team, Liang Zhu stressed: "Of our two to three hundred people, most are now working on the phone app."

Yet the picture on mobile looks much like the one on the desktop. Many users still see Mobile QZone as an add-on to Mobile QQ. Even Liang Zhu describes it that way: "Users can see QZone from Mobile QQ, but we also have our own app."

Whatever QZone planned, it became a photo community

For all its makeovers, QZone has today become a photo community. By 2014, users were uploading 400 million photos to it a day. On May 1 this year, the figure hit 650 million.

Many former heavy QZone users, having moved to other social apps, now use QZone to share photos with friends. They no longer post Shuoshuo updates, but they keep their albums up to date. Given how often people travel, the standard album storage is enough, and they don't need to pay for Yellow Diamond.

Liang Zhu told QDaily: "A social network comes down to a few blocks: content, video, music, photos and so on. QZone is looking at other opportunities too. But for now it is still built around albums, which means photos."

QZone is currently promoting parent-and-child albums and travel albums to different groups of users, projects that began in 2013.

Seen this way, QZone really is a photo community. And as users' demand has surged, QZone has kept adding features to match.

• January 2007: Dynamic Photo Albums released.
• August 2008: albums fully redesigned.
• February 2009: Friends' Albums released.
• May 2009: photo sorting, custom albums and slideshows released.
• September 2009: photo editor and photo reposting released.
• November 2009: basic album storage expanded to 500MB.
• May 2010: new way of viewing QZone albums, with the photo wall launched.
• July 2012: QZone albums support lossless upload of original photos up to 20MB.
• April 2013: QZone watermark camera launched.
• 2015: Weiyun backup launched.

How does QZone make money?

Like QQ, which sells memberships, QZone earns most of its revenue from its membership service, called Yellow Diamond. Besides lighting up a VIP crown for users, it offers faster points and rankings in social games, extra album storage, space decorations, discounts on phone top-ups, and discounts on books in the reading center.

With a steady base of active users, Tencent wanted to use what it had learned on the PC to make money on mobile. Nothing about that was unworkable. The shift happened only because the whole world was going mobile: users had all moved to phones and tablets.

Through several transitions, Yellow Diamond perks grew from just a monthly discount on decoration modules to include benefits tied to mobile, album storage and games, such as a tagline on posts sent from a phone and discounts on game-credit top-ups.

"In 2007, 90% of QZone's revenue came from Yellow Diamond fees," said Zeng Jiaxin, who oversees the QQ membership, QQ Show and QZone businesses, speaking about Yellow Diamond. This is part of the "value-added services" often mentioned in Tencent's earnings reports. She said the share is shrinking but remains an important source of QZone's revenue. Tencent now has tens of millions of Yellow Diamond members, bringing in more than 1 billion yuan a year.

By the time Liang Zhu took charge of QZone in 2008, it already had more than 100 million active users a month. Yellow Diamond alone made revenue a solved problem. His job by then was to keep existing users and attract new ones.

Beyond Yellow Diamond, QZone's new source of growth is the "exclusive launch." Zeng Jiaxin, head of marketing, explained that in 2013 QZone's back-end data showed users loved talking about gadgets, with Apple, Samsung and Xiaomi the most discussed. QZone eventually landed the Redmi launch with Xiaomi. After that it hosted exclusive launches for a string of phone brands, including Huawei, Meizu and OnePlus.

But not every phone maker cares most about young buyers. Zeng Jiaxin said QZone's launches now focus on entertainment. QZone has already hosted exclusive launches for the films You Are My Sunshine and Somewhere Only We Know, both plainly aimed at young audiences.

Still, Liang Zhu said, "This is just an experiment QZone is running." QZone's main revenue still comes from three sources: Yellow Diamond, platform distribution and advertising. Platform distribution money comes mostly from shares of game revenue, a field where Tencent is strong.

Now that it is ten, what does QZone plan to do?

Depending on your age, your path through social networks probably looked like one of these:

QZone at school, then stealing vegetables on Kaixin001 once you started work; QZone at school, then Xiaonei at university; QZone at school, then reading news on Weibo after graduation.

QZone's companions have always been students, or at least the young. According to Tencent, more than half of QZone's users were born after 1990, just as ten years ago most were born in the 1980s.

Capturing the young is always good, but holding them only for their few young years has also limited what QZone can become.

Today, as Weibo declines, a gap may be opening. WeChat has a firm hold on older users, but Moments is not an open social network, and information spreads only so far on it.

More than one social network wants Weibo's old place. Zhihu has started talking about relationships between people, not just being a knowledge community. Douban has joined up all its channels to remake itself as one big community linking people to any interest, or, in Yang Bo's own words: "We used to be a few urban villages; now we want to build a big city."

So what does QZone plan to do?

"Our next version will add 'topic circles,'" Liang Zhu said. "QZone is still a relatively closed social platform, and its social influence beyond itself is limited. Weibo may still be our biggest competitor, because it is an open social platform."

As with the changes at Douban and Zhihu, turning QZone into an open social platform will not be easy. The mighty QQ is both a help and a burden.

But if Chinese users still want an open social network like Weibo or Facebook, there is a public space standing empty right now, and no company has yet moved in.

The QZone interface images in this article are from Tencent.