Really amusing blog coverage of LeWeb ‘08 at The Next Web. Check it out if you’re tired of following my very frequent Twitter posts on the conference. Dying battery and lack of a French plug — it’s a really annoying form of protectionism, if you ask me! — may prevent me from posting much before I board a plane this afternoon. See you back in Beijing soon!
I’m micro-blogging many of the talks at LeWeb ‘08, a very cool conference going on today and tomorrow, December 9 and 10, in Paris. If you’re interested in reading about what the speakers are saying, please follow me on Twitter. I’ll also be doing some round-up posts here at Digital Watch. Some very interesting comments from speakers from Microsoft (Dan’l Lewin) and Google (Nikesh Arora) so far this morning.
Sorry for the long absence, folks, but I saved up all my vacation days and in lieu of a proper holiday I went on the road with my band Chunqiu (春秋) to play shows in nine cities all over China — Wuhan, Changsha, Shenzhen, Guangzhou, Nanning, Kunming, Chengdu, and Xining, where I’m now writing from. After the weekend I’ll be in Paris for LeWeb ‘08, which promises to be an excellent conference as Loic LeMeur’s conferences always are — or so they say. This one has an all-star cast, with the likes of Fred Wilson, Chris Anderson, Maurice Levy, Joi Ito, Robert Scoble, Michael Arrington, Doc Searls, and Hugh MacLeod. I’ll be sure to do lots of blogging from there.
Again, apologies for vanishing for so long, but believe me it was well worth it! I don’t believe I’ll ever shake the rock habit, alas…
Brad Setser (his bio here) has written a sensible and easy-to-understand analysis on how the current financial crisis might impact China. (H/T to Bill Bishop, who if you use Twitter you should definitely follow, as his frequent links to stories, both in English and Chinese, are almost always worth reading). I know this isn’t a post directly about interactive marketing, but a good macroeconomic read’s good for us now and again, right?
We’re all aware that China’s vaunted exports have fallen off rather precipitously in the last quarter, but that, accoring to Mr. Setser, isn’t what’s particularly worrisome:
The world economy could really use a Chinese locomotive. But it increasingly doesn’t look like it will get one. A recent Credit Suisse report noted that the latest purchasing managers survey suggests that China is about to enter a manufacturing recession. Export orders fell sharply – as one would expect. But import orders fell more. If that proves an accurate guide to China’s demand for the world’s goods and services, China won’t be doing much to support global growth.
He goes on to make a persuasive and, frankly, chilling case that those of us who’ve believed ourselves to be well insulated from the downturn here in robust China should read. It’s a good antidote to the “hey, we can just stimulate consumption and all will be well” mentality, and to the blithely optimistic here who believe that China can somehow ride in on a white charger agleam in chrome plate armor and rescue the world. (Neither are views held by Beijing’s economic planners, to be sure).
I just saw this handy post on Adam Schokora’s 56minus1.com blog. Adam gives quick intros to five Chinese microblogging services, including Taotao, Jiwaide, Fanfou, Zuosa, and (I didn’t know about this one!) Douban Broadcast. Check out China’s answers to Twitter. I admit I’m not a user; there are so many tech-savvy Chinese people I already follow in Twitter that it doesn’t seem worth it to keep another microblog going.
MySpace China Woes: BusinessWeek’s Bruce Einhorn has a piece about MySpace.cn and its efforts to come up with a new business model in the wake of some big setbacks — most recently, the departure of CEO Luo Chuan.
There’s certainly a big gap between MySpace China and its Chinese rivals, though. According to BDA, MySpace China hopes to have 10 million registered users by the end of the year. In contrast, market leader Qzone, owned by Shenzhen-based instant-messaging giant Tencent Holdings, already has 105 million registered users. Another Chinese SNS operator, 51.com, has 95 million.
Einhorn’s piece gives MySpace China rivals and critics a chance to sound off. These include Brad Greenspan, one of MySpace’s original U.S. founders who was famously unappy with the sale to News Corp; and Joe Chen, who runs the parent company of leading SNS Xiaonei:
As the local players become stronger, some in the industry are dismissive of MySpace China and its high-powered backers as paper tigers. “Everybody knows it’s a U.S. brand,” says Brad Greenspan, former CEO of eUniverse, where MySpace got launched, and now chairman of BroadWebAsia, a West Hollywood (Calif.) investor in Chinese Internet sites. “If you want to spend time on a site that’s about you, it’s harder to pull that off with a U.S. brand. It just doesn’t feel authentic.” In China, SNS “is entirely a local game,” boasts Joseph Chen, chief executive of Xiaonei owner OPI [Oak Pacific International]. Not only are Chinese users reluctant to switch to a newcomer but many young Chinese students without strong English skills don’t even know how to spell the name MySpace. “You tell a typical kid in China who has never heard about MySpace and ask the person to spell it, 90% of the time the kid has no clue,” says Chen.
Shanda Joins the SNS game? We’re written on this blog about the strength of tie-ups between online gaming companies and SNS: Giant Interactive’s $50 million investment in 51.com comes to mind. Now, Gang Lu writes about Shanda’s rumored efforts to enter the SNS space through
Shanda (NASDAQ: SNDA), the leading interactive entertainment media company in China and offers a variety of internet based entertainment services such as online role playing games (Massively Multiplayer Online Role-Playing Games, or “MMORPGs”), casual games, chess and board games, network PC games, cartoons, literature, and music, is now seriously looking into SNS market, told by an insider. The big question is how they are going to do it?
Internet Bar is a very popular place for Chinese to surf Internet, especially in tier 2 and tier 3 cities. It was reported that there are over 100,000 Internet bards across China and 70 million Chinese netizen are accessing Internet from Internet bars. The figure needs to be verified, but it does tells the fact that Internet bar is a very important battle field in China web. Over 70% of Chinese Internet bars are using a management software which is offered by a Chengdu based company, Sicent Technology Co. Ltd, and Sicent was acquired by Shanda in Sept, 2003.
Indeed, Shanda’s acquisition of Sicent really could position it well to push an SNS service through Internet cafes. Companies like Sicent, which do install management, security, patching and the like, are also being examined for their advertising possibilities by many interested parties.
New Code of Conduct for U.S. Internet Companies in Censoring Countries: Google, Microsoft, and Yahoo — the three Internet companies who were browbeaten by an indignant U.S. Congress for their alleged complicity in keeping China’s Internet censored, have taken the wraps off a “Global Network Initiative,” or GNI, that aims to “protect the freedom of expression and the privacy rights of their users.” Apparently, signatories to the GNI “promise to reveal attempts by governments to pressure them into violating worldwide standards regarding online privacy or access to information,” says an AFP report on this.
Obviously this isn’t going to settle the issue, and it’s certainly not going to placate groups like RSF and EFF, which will continue to demand the impossible from these companies. (RSF, or Reporters Without Borders, pulled out of talks with the GNI companies last month, saying “loopholes and weak language” in it leave room for abuses. We’ll see whether it heads off legislation pending in Congress like the “Global Online Freedom Act,” which (at least in earlier incarnations) contained language that any country would clearly see as violating its national sovereignty — most notably, calling on U.S. companies, even with servers physically located within the P.R.C., to turn any requests for personal information from Chinese law enforcement agencies to the U.S. Department of Justice for approval first. Yeah, right.
Naturally it doth please me that David Wolf has declaimed his faith in Internet video sites in China, and that he chose for a section subtitle, “We have seen the future, and it is Youku.” David is blogging from CASBAA in Kowloon this week, and he’s making the kind of predictions that online ad folks, particularly those with ties to Internet video players like myself, hope will come to transpire:
Here is my scenario: either this year, next year, or in 2010 the results of the CCTV advertising auction are bad - so bad that they cannot be hidden. We’re talking like a 10-15% decline, or maybe worse. Meantime, Youku, Tudou, et al are starting to rake it in. They’ve concluded content licensing deals, they’ve fixed (or kind of fixed) the measurement issues, and there are upwards of 300 million users online.
At that point, it is not going to take long for CCTV and its fellow broadcasters throughout China to add things up. They will turn to the State Administration for Radio, Film and Television and to the Publicity (propaganda) Committee of the Party, making the case that these private online companies are not only hurting their business, but, worse, doing damage to the ability of broadcasters to serve their propaganda/social administration function for the state.
At that point, the government’s options become fairly clear: restrict the online video sites, let the broadcasters run whatever content they want, or force some kind of accommodation between the two sides (i.e., compel each of the sites to take on a state broadcaster as a part or majority shareholder.)
Let’s hope he’s right. By the way, SARFT has been shuttering more minor video players. Read Steve Schwankert’s piece on that here.
Yesterday’s New York Times ran a good piece on how Internet start-ups are dealing with the onset of winter by “getting small, humble and thrifty,” and how lots of layoffs are happening among fledgling tech companies. The piece makes a very good point — that in the Web 2.0 age, there’s relatively fixed cost involved and it’s easy to pare down to a skeleton crew and survive a slump. They’re so good at keeping their burn low that, as one VC quoted in the piece says, it’s made the whole decision over pulling the plug problematic, as the VCs “may not have the plug in our hand.”
The list of companies who’ve cut staff just in the last two weeks, though, is depressing. Many are quite well-known start-ups, at least among those watching: Jason Calacanis’s social search site Mahalo, my favorite Internet music recommendation engine Pandora, SNS Hi5, music site Imeem, real estate site Zillow, visual search engine Searchme… and there are a couple of other very well-known companies like Loic Le Meur’s Seesmic which, as the story says, also went through a round of layoffs. (Presumably, Mahalo fired only people “who are not workaholics who don’t love their work,” as the company’s founder suggests all start-ups do).
With the notable exception of non-P2P Internet video, where burn rates are necessarily very high because of bandwidth costs, Chinese start-ups are even scrappier and able to “eat bitterness” than their Silicon Valley counterparts. I’m not hearing about any austerity measures implemented by Chinese start-ups so far as a result of the downturn, but if anyone hears anything, drop me a note.
I saw this item in China Tech News today announcing that Beijing-based Aigo, the first Chinese consumer electronics firm to stand a chance at building itself a decent brand internationally, has launched an MP6 music player. Sounds very nifty, from the description I read. Aigo is launching its new eMusicPlayer, or eMP (I guess no one told Aigo boss-man Feng Jun that “EMP” also stands for “electro-magnetic pulse”) in cooperation with China Unicom and with Sina.com’s music section. Apparently it comes with a Wi-Fi-powered reading pen that will let you scan a magazine, included gratis, to download from a catalog of several hundred songs. You point to a song in the magazine, and if you’re online and your pen’s plugged in (presumably to a USB port), you start downloading the song. The compression standard is supposed to be basically lossless, as good as a the .wav files you have on a CD. The device itself is Wi-Fi enabled too, and evidently you can use it to listen to music wirelessly. Sounds pretty cool! They’ll go for about ¥1000 and will be available at the end of the year.
I’m something of an Aigo fan. It’s impressive that they’ve managed to build 20+ percent market share in heavily commoditized sectors like MP3 players and USB flash drives. They’re very aware of their brand — even slapping that Aigo logo, designed by the way by Ogilvy, on an F1 racer. They have amazingly deep distribution channels, too. The products I’ve used I’ve been pleased with. I won a very cool Aigo MP4 player in a drawing at a WI Harper CNY party one year, and that baby’s doing well for me still. Very nice form factor and easy usability.
The real mystery: We all know what MP3s are, and some of use the MP4 compression standard for video. But where’s the MP5? I guess someone in some standards-setting body decided that designation would have had too many associations with Heckler & Koch’s famous 9mm submachinegun. Imagine the confusion of walking into a store in America and asking for an MP5 only to have the Bureau of Alcohol, Tobacco, and Firearms start a file on you. Actually the MP5 players do exist, says Gizmodo — even if the standard doesn’t.
My friend Jin Xiaofeng and her team at Linkool Labs here in Beijing have been hard at work for the better part of this year on a very, very cool app called Juice that I might have mentioned at some point on this blog. It’s a browser plug-in currently available for Firefox, and for the last couple of months it’s been in invite-only Beta. Next week, Juice goes into public Beta and I thought I’d give you all a heads-up with an interview with Linkool’s founder. Oh, and in the interest of full disclosure, Xiaofeng recently asked me to join Linkool’s advisory board — a real honor for me, but certainly not the reason that I thought her company and its new app would be of interest to readers of this blog.
When I first met her — we were introduced by mutual friend Po Chi Wu — Linkool was doing the context engine for an in-text ad service under the brand name ClickEye. Even then she had very big ambitions for what Linkool would become, and the ideas that became Juice were already germinating. Give her new app a try. You’ll see why friends of mine are saying that it’ll really change the way you use the Web, and wondering how they got along without it.
A native of Suzhou, Xiaofeng graduated from Peking University. After spending some time with fusionOne and Lucent in the Valley, she started a software outsourcing company called AcornSoft, which she sold. She now divides her time between Beijing and the Bay Area.
KK: What is Juice, in a nutshell?
JXF: Juice is a browser plug-in that aims to improve browsing experience in an environment where search is a frequently repeated, daily action, and where interaction with multimedia content represents a significant portion of user’s online media consumption. Juice discovers rich content intelligently for you when you highlight and drag a chunk of text in the browser. This rich content, which can be photos, news, or video for example, is contextually relevant to the highlighted text, and is displayed in a sidebar area of the browser. It offers a non-intrusive, dynamic, multitasking browsing experience.
KK: How does it differ from regular old search? Doesn’t Google also return multimedia search results?
JXF: Nowadays an ordinary or “flat” search on just about any keyword will return thousands of results. This is testimony to a search engine’s ability to index and rank all sorts of information. We set ourselves apart by focusing on keywords that have distinctive attributes, and display the most relevant content through a feature of Juice that we call “Magic.” For example, when we search for “Quantum of Solace,” the new James Bond movie. Do you really need or want over 7 million results? Or do you, or the average user, simply want a brief introduction of the movie, a trailer you can directly click on and play, related products available on perhaps Amazon and some reviews about it? These are the sorts of results that you’ll get through Juice. You can also bypass Magic and just perform searches from popular search engines, as a complement to “Magic.”
KK: In what sense is Juice “intelligent”?
JXF: Juice is intelligent in a couple of ways. Just to give you a few examples, Juice deals with keywords that have distinctive attributes. Juice’s backend platform automatically and intelligently learns distinctive attributes of any keyword a user interacts with. If distinctive attributes are found, the most appropriate content pertaining to the attributes is shown. For example, if Juice’s backend platform learns that “Brad Pitt” is an actor, it returns photos, movie trailers, news etc. Juice also has the ability to do fuzzy matching. Juice knows that “Barack Obama” or “Sen. Obama” or “Barack H. Obama” refer to the same person.
KK: It’s unusual that a Chinese Internet company should release a product for the international market before releasing it in China. What was your strategy here?
JXF: Our product is all about aggregating and sifting through a lot of rich data from reliable sources, either through open API access or through strategic partnerships. We aim at creating the best user experience possible and, looking at the availability and depth of data today, we believe the international market is the best place to kick-start our effort. To be sure, we can always enter a market by entering into data supply partnerships with the leading content providers in that specific market. China will be following in the near future, as we’re working with our partners on bringing that same experience in a local flavor. In any case, we believe that an enhanced browsing experience will have a market anywhere in the world, albeit, of course, with some localized tweaking. Eventually, Juice will be as language-neutral as the number of languages, and the corresponding data sources, we choose to support.
KK: What inspired the creation of the Juice app?
JXF: The idea came to life a few years back when I was reading an article about Tom Cruise’s visit to Shanghai. The article talked about a hip restaurant he went to that sounded really interesting, so I started to search for it. But I had to get through many not-quite-relevant web pages and click through many links to get relevant information I truly wanted. At that time, I thought how wonderful it would be if I could just highlight the name of the restaurant and get the restaurant’s address, its phone number, some photos, a neighborhood map, and maybe even some reviews.
KK: What do you personally find to be the most innovative attributes about Juice?
JXF: The most compelling reason for a user to use Juice is that the user can literally search for intelligent content at his or her fingertips even while the user continues to browse in the normal browser window. By implementing a highlight-and-drag feature, the user no longer has to re-type a keyword or a phrase in the search engine, or to copy and paste. By displaying the intelligent content in a sidebar area, the user can choose to read the intelligent content, or continue to browse in the normal browser window.
As a side feature, we allow the user to save links to intelligent content, like photos and videos, into a photo album or a video playlist. These photos and videos can be pulled up for current or time-shifted viewing. Users can also save links to photos and videos from the normal browser window by clicking and dragging a photo, or by clicking and dragging a Juice tab attached to a video. We truly believe in enhancing the browser’s experience by creating an environment where users can discover and organize the way they want to.
We’re all about “User-Focused Innovation.” It’s about small enhancements with a user’s experience in mind: minimizing clicks, maximizing the quality of content, reducing or even eliminating any user interruption. When you add up all these little things, you get a far more efficient and enjoyable browsing experience.
KK: Tell me about the team that developed this app.
JXF: Our R&D engineers have been working on the plug-in and the corresponding backend platform for well over a year. I couldn’t be more proud of their efforts and the high-quality, smart solutions they deliver. By backend platform I mean the dictionary management system that maintains the relationships between keywords and API services, the load balancing mechanics that are critical in these massively deployed consumer products, and the semantic engine that attempts to understand what the user truly wants to search when the user searches for a particular keyword. Equally impressive are our QA staff and our UX experts, without whom Juice wouldn’t be as stable and easy to use as I believe it is today. The Linkool team is made up of both local Chinese and westerners. The westerners I think really took us to the next level with unfaltering focus on quality and user experience, and our Chinese team can be credited for the robust programming and the relatively fast deployment. But at the end of the day, it is their collaborative effort and mutual respect for each other that allow the app to be as good as I believe it is today.
KK: What’s the intended revenue model for Juice?
JXF: Initially, we plan to monetize through e-commerce affiliate programs. I’m confident that we can drive significant traffic to partner assets. For example, if a user searches for “Julia Roberts”, we return products that are related to the Academy-award winning actress. We monetize when the user eventually clicks through to complete a purchase. Of course, we will keep looking for monetization opportunities, including traffic referrals and branded messages. After all, our sidebar is a valuable piece of real estate, each bit of which can attract eyeballs and should be monetizable. We will plan our monetization strategy carefully — and always with user experience in mind!
KK: What can we look forward to from Linkool and Juice down the road?
JXF: Some things we’re still keeping quiet about, but I can tell you about a couple of services in the works. One is a sharing capability within the plug-in, where users can share their Juice-powered intelligent content with their friends and networks. We are also building a suite of backend analytics that will help our data providers and program affiliates monitor the performance of their content.