Online social network service provider Five One Network Development Co. Ltd. (51.com) was founded in August 2005 and entered the online game industry in 2011, when browser games became popular in China. Although it continuously invested in developing online games, it had failed to reach its goal of becoming one of the top 10 companies in China. The online game industry had seen fierce competition and was finding it difficult to retain talented employees, who were leaving to start their own businesses. This problem, referred to as a “brain drain,” was also increasing the number of emerging profitable start-ups, especially in the mobile game segment. To overcome these internal and external challenges, 51.com decided to apply a new strategic approach: launching a series of new spin-off businesses from within the company. However, competition between the spin-offs seemed unavoidable. How would 51.com manage the relationships between the new spin-off businesses?
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