China's YY Creates an Online Hostess Lounge

Ni Linlin has made a career out of convincing men to send her virtual teddy bears, necklaces, and blue roses. Using a laptop in her 10-square-meter (110-square-foot) living room in Qingdao, China, the 25-year-old entertains as many as 2,000 fans a day as a DJ and singer on YY, a Chinese entertainment website with nearly a half-billion users. For Ni, however, coyly playing with her fans online is no game: She earns five times more than two years ago when she quit her job as a secretary.

Part American Idol, part online hostess club, YY’s service allows freelance entertainers like Ni to use live chat rooms and streaming video to build a following among the company’s users. Performers then earn cash by charging fans fees for interacting with them in real time, such as by joining them to play online games using YY’s own Skype-like software. Entertainers also pocket a cut of the revenue from virtual gifts proffered by their smitten admirers. Racy jokes and low-slung tops are allowed; nudity is not. The service is a hit. Guangzhou-based YY’s stock has surged 50 percent since its November listing on the Nasdaq.