Intel VC Veteran Focuses On China

From Red Herring:

"On January 11, San Francisco-based venture capital firm WI Harper announced that Mr. (Claude)Leglise (Intel VC veteran) would join as managing director and lead the San Francisco headquarters. His decision to join WI Harper boiled down to one word: China. We caught up with him in Redwood Shores, California, where he let Red Herring in on his plans.

Q: Do you think you’re going to bring a different flavor to the types of investments that WI Harper will be making?
A: I’ve always thought there are four opportunities at the moment. Semiconductors—there will continue to be some good ideas around there. Two is the whole wireless ecosystem. We’re talking about 500 million subscribers by the end of 2007. That is bound to lead to more innovations on the services side. Three is digital media. And four is the ‘wow, I hadn’t thought about that.’ This worked well at Intel, and I think it’s going to work at Harper. It’s the guy who walks in the door, and he describes this new thing, and you go ‘wow, it doesn’t fit in any strategy we have, we’ve never thought about this, but it sounds really compelling.’ "

Google Is Destined To Fail In China

From ChinaTechNews:
By Perry Wu

"Google seems to think that it can not rule the world without having a firm grip over China's Internet population. And that probably won't happen any time soon. (...) Google's inability to succeed in China (...) resides in it not being a Chinese company."

"Cadres are rolling over in their graves about how money-hungry Chinese society has become, but there is still fear among all Chinese Internet companies that they do not want to grow too big and become the sole titan in the industry. Titans fall hard in China, so oligarchy reins in the veins of Internet entrepreneurs (as much as they hate to admit it). Will Google be happy as an equal among giants, or does it need to tower over the Chinese firms? It can't be an equal, and its China-confused foreign investors won't let it."

"But in China, rival Internet companies have developed a symbiotic relationship. Sohu, Sina, and Netease all provide pretty much the same services and they all developed along the same faddish tracks: first, a portal with free email; second, news and community; third, wireless/SMS/MMS content; and now, online gaming. There is always talk of one of these three buying the other, but not much happens."

"For those armchair Sinologists uncomfortable with Google censoring content, rest assured that the company is not really welcome in China and thousands of years of history show that it can't last long here either. "

Gates: China Set to Become Biggest User of Broadband Worldwide

From TMCnet:

"China is set to become the biggest user of broadband in the world, Bill Gates said Friday."No one will catch up (except) maybe India in 50 years," the chairman and co-founder of Microsoft Corp. said at the World Economic Forum's annual meeting.

He said that despite the disparity between China's urban and rural areas, the country was on track toward reducing poverty, meaning more people would be able to afford broadband Internet access."The greatest surprise in poverty reduction ... is China," Gates said."

World Economic Forum 2006: China Goes Global - Webcast

Webcast:
China Goes Global - 9 mins edited highlights

"With its vibrant economy, increasing demand for natural resources, emerging class of multinational corporations and growing population of consumers, China is reshaping business as we know it and redefining the global economy."

Panel:
Deepak Advani, Senior Vice-President and Chief Marketing Officer, Lenovo Group Limited
Victor L. L. Chu, Chairman and Chief Executive Officer, First Eastern Investment Group
Orit Gadiesh, Chairman, Bain & Company; Member of the Foundation Board of the World Economic Forum
Stephen S. Roach, Chief Economist, Morgan Stanley
Edward S. Tian, Vice-Chairman and CEO, China Netcom (Group) Corporation
Sing Wang, CEO and Executive Director, TOM Group, Hong Kong
Zhou Xiaochuan, Governor of the People's Bank of China

Net Search in China: It's a Race

From BusinessWeek:

"That race is getting more exciting every day. Microsoft's MSN in early January launched a test version of its Chinese-language search engine. On Jan. 24, Google started offering its search engine from servers inside China for the first time, augmenting a service it had run on U.S.-based computers. Nasdaq-listed Sina.com, China's most popular portal, used to outsource its search to Baidu but last year launched its own service, called iAsk. And Sohu.com, another Beijing-based, Nasdaq-listed portal, has done the same, with its new Sogou [the name means Search Dog] drawing growing numbers of users.

Why the interest? China's online population keeps growing, It now stands at 110 million, up 18% from a year ago. And while the market for search ads is still puny -- just $130 million, or less than a third of online advertising, and about 1% of total ad spending in China -- it grew by 88% last year, Morgan Stanley analyst Richard Ji estimates. For the next three years, the market will likely expand by more than 50% annually as small and midsize businesses turn to the Net for advertising, Ji predicts. Search "will outgrow every other online business" in China, he says. "There is huge demand." "

"While Baidu is the leader for now, and other Chinese players are coming on strong, Yahoo's biggest threat will likely remain Google. The $470 million that Morgan estimates Google spent on research and development last year dwarfs Baidu's $4 million. "In the search business, technology is more important," says Charles Chao, president of Sina.com. "I wouldn't be surprised if Google does much better in the future." Whatever the outcome, expect to see plenty of action in the race for search in China."

Related:
Google to Launch Censored China Service
Baidu Will Continue to Lead Google in China This Year
Asian Search Engines One Step Ahead?

China Approves 'Home-Grown' 3G Standard

From CMPnetAsia:

"The Chinese Ministry of Information Industry (MII) announced Friday (Jan. 20) that it has approved TD-SCDMA (Time Division Synchronous Code Division Multiple Access) as a national technology standard for third-generation mobile communicatons. The move means that the technology, which has been under development in China for a number of years, is set to get official support and be used in a stand-alone network the Ministry said, according to a Xinhua report.

The basic technology was originally developed by Siemens AG and offered as a potential standard for the European 3G standard. When it lost out in the late 1990s in a critical vote to wideband-CDMA, which offered broad harmonization between Europe and Japan, Siemens found China receptive to adopting the standard. China has implemented a series of tests on TD-SCDMA since 2001."

Sina.com Sells 1Pai Stake To Alibaba

From ChinaKnowledge:

"Sina said it signed an agreement with Alibaba yesterday, selling the 33% stake it has in 1Pai to Alibaba, the online marketplace for domestic trade among businesspeople. Neither side has disclosed the detailed amount of the deal.

Information and contents on 1Pai.com will not be updated from now until Feb. 15, 2006, on which 1Pai.com will be completely defunct, said Sina. In the meantime, 1Pai.com visitors will be automatically redirected to Alibaba’s wholly-owned subsidiary, Taobao.com, a consumer-to-consumer trading site with more than 10 million registered users."

Related:
eBayEachnet vs. Alibaba's Taobao.com - Latest Numbers

Google to Launch Censored China Service

From Independent Online:

"Google today launched the latest version of its famous search engine in China, and defended its decision to self-censor some content as a trade-off that will grant Chinese greater access to other kinds of information.
Within minutes of the launch of the new site bearing China's web suffix .cn, searches for the banned Falun Gong spiritual movement showed scores of sites omitted and users directed to articles condemning the group posted on Chinese government websites."

"Google says the new site aims to make its search engine more accessible in China, thereby expanding access to information.
Yet the move has already been criticised by media watchdog Reporters Without Borders, which has chided Yahoo and Microsoft Corp.'s MSN.com for submitting to China's censorship regime."

"Chinese internet users said Mountain View, California-based Google Inc.'s move was inevitable given Beijing's restrictions on the internet, which the government promotes for commerce but heavily censors for content deemed offensive or subversive."

Baidu Will Continue to Lead Google in China This Year

From Interfax China:

"NASDAQ listed Baidu.com Inc., the largest online search engine operator in China, will continue to lead China's search engine market despite strong competition from Google, Yang Weiqing, General Manager of IT research firm iResearch, told Interfax.

"It will not be easy for Google to pull Baidu off its dominant position in China because Baidu still enjoys advantages over Google in quite few aspects," Yang said Friday. "Compared with foreign companies, Baidu has more support from the Chinese government. The business environment here is more suited for domestic enterprises."

"Yang said. "Advantages in brand recognition, user base, and market share that Baidu currently has will help the company continue to lead in China." "

Market share for search engines in China during 2005:

1 Baidu 46.5%
2 Google 26.9%
3 Yahoo/Yisou/3721 15.6%
4 Sohu/Sogou 2.7%
5 Zhongsou/HC360 2.4%
6 Sina/iAsk 1.6%

Source: iResearch

Related:
Google Poses Strong Challenge to Leader Baidu in China

eBayEachnet vs. Alibaba's Taobao.com - Latest Numbers

From CHINAdaily:

"China online auctioneer TaoBao added 3.9 million users to its service in the fourth quarter from the third while its chief rival, eBay Inc., added 2.8 million, as the pair fought over the fast-growing market.

TaoBao's additions brought its total registered users to 13.9 million, up 38 percent from last year's third quarter, according to data released on Friday by the firm, whose top shareholders include Yahoo Inc. and Japan's Softbank Corp.

It said its gross merchandise value had grown 29 percent in the fourth quarter from the third to $375 million, bringing its total for the year to $982 million.

Online giant eBay's fourth-quarter additions in China brought its total to 17.9 million registered users, representing a 19 percent gain from the previous quarter, the company said in announcing its global results on Thursday in the United States."

EBay China to Waive Transaction Fees amid Stiff Competition

From Forbes:

"The Chinese unit of US online auction service eBay will scrap all sellers' transaction fees from today, amid market pressure from local competitors offering free services, including Yahoo-invested Alibaba.com, the Financial Times reported.

The move by unit eBay Eachnet, which will continue to charge users small fees to list goods for sale on its website, highlights the stiff competition the US company faces in China, the report said."


From China Tech News:
eBay Eachnet Launches Another Free Offer

"eBay Eachnet announced that starting January 19 it would not charge any fees from online buyers. However, it still requires that each buyer must pay for goods they bought through its Anfutong or Beibao payment tools. This is the second free measure that eBay Eachent has adopted since allowed sellers to open online shops without cost."

Related:
eBay China to Provide Free Services for Cyber Shop Owners

Asian Search Engines One Step Ahead?

China Net Investor: Asian internet companies have long been criticised for a lack of innovation and for copying successful business models from the US. In my opinion the launch of Yahoo Answers - a social networking/online community/question answering service - seems to be a remarkable event: This time western internet giants are learning from the East.

From Business Week:

Korea's NHN thumps Google at home, and it's teaching the big dogs a new trick

"(...) in its home market, NHN's Naver.com search engine trounced Google's offering. Google's 4-year-old Korean-language search service accounts for less than 2% of search page views and search-related ad revenues in Korea."

"Why is Naver so popular? One reason is that Naver can deliver more relevant search results than Google can, at least on its home turf. (...) "Google has a superb search engine," says Choi Jae Hyeon, NHN's search chief. "We have, however, built up knowhow and a database by extracting knowledge from users' brains."

"What he's talking about is a three-year-old initiative called "Knowledge-In." The program lets users ask and answer questions on anything from recipes for kimchi to the composition of rocket fuel. Readers judge the responses, and the millions of folks who have answered questions are ranked as "ordinary," "knowledgeable," "highly knowledgeable," "supernatural," or -- for 22 truly prolific answerers -- "gods." "Naver is great because you get all sorts of detailed information in very specific questions and answers," says Song Han Sil, a 25-year-old pianist in Seoul. "Many of my friends don't even know that Google offers Korean-language service." The database now has some 37 million questions and answers that can get returned with search results."


Related:
China's #1 portal Sina.com Officially Launches New Search Engine iAsk

"iAsk offers knowledge-based and community-based search in addition to the standard web-based search. While maintaining the power of traditional algorithm technology, Sina's iAsk offers an added bonus of users' interactivity with a unique Q&A platform. iAsk categorizes search subjects into areas of news, pictures, music, knowledge, and video and allows users to input key words and questions of their interests. iAsk then ranks sites partly by subject-specific popularity, clusters results into subject groups, and lists related link collections by experts."

From the China Tech Stories Blog: Baidu's Good Quarter

"Another new service is showing it's huge growth potential and is like a powerful magnet for many net surfers. The new service is called "Baidu Knows The Answer". It is effectively a similar show like "Wheel of Fortune" and "Jeopardy". When a user cannot find a good answer to a question, he or she simply post the question on the service. Any user can then post an answer to that question. The answers can then be rated by other users. We have seen a swarm of users coming in on almost every question with quick and mostly very high quality answers. (...) We think it is a huge hidden jewel in Baidu."

Huawei on Verge of First 'Major' US Win

From ARNet:

"Chinese manufacturer Huawei may be about to land its first major U.S. contract, according to investment firm UBS Warburg.

In a research note issued this week, UBS states that Huawei has made the short list at T-Mobile USA for the carrier's 3G HSDPA rollout in the second half of this year. Other vendors on the short list include incumbent GSM suppliers Ericsson, Nokia and Nortel, UBS states.

Should Huawei win, it would be the first Tier 1 operator win in the U.S. for the company, UBS states."

China's Networking Giant Huawei Doubles International Sales

From Light Reading:

"Huawei Technologies Co. Ltd. boosted its international sales by 110 percent to nearly $5 billion in 2005, according to fresh details from the Chinese vendor, which earlier this week announced total sales for the year of $8.2 billion.

According to a Huawei spokesman, the value of contracts won outside China in 2005 was $4.8 billion, or nearly 59 percent of total sales. That compares with $2.28 billion in 2004, or 41 percent of the year's total $5.58 billion sales.

2005 revenues were $5.6 billion, up 46 percent from $3.83 billion the year before, according to Huawei officials."

Microsoft to invest $100m in China

From Digital Media:

"Software giant Microsoft plans to invest more than $100m in China over the next three to five years, according to a report today from Shanghai Daily. The investment will reportedly go towards strengthening the company's research and development in China, as its competitors - namely Yahoo and Google - continue to expand in the country."

"The company's R&D focus in China, according to the paper, will be on mobile communications, internet and digital entertainment. The company also plans to boost its current China R&D staff of 800 to almost 4,000 by 2008."

Related:
Microsoft Opens adLab in China

China Net Population Hits 111M

From Digital Media:

"There were more than 111 million internet users in China at the end of 2005, according to the 17th Survey Report from the China Internet Network Information Center (CNNIC), the government agency responsible for domain registration and internet policy.

There were 17 million new Chinese internet users in 2005, eight million of whom have gotten online since CNNIC's last Survey Report in June. With the new users, 8.5 per cent of China’s population is now online."

Google Strong In China Search War

Press Release

Google Poses Strong Challenge to Leader Baidu in China

"A groundbreaking new study from Keynote Systems, (...), shows Google in a strong position to challenge Baidu in the Chinese search engine market despite the distinct brand recognition and market share advantages Baidu currently holds in that market."

"The Keynote study showed that Chinese consumers, once they are exposed to Google, have an overwhelmingly positive search experience on the site and generally prefer that site as compared to competitors in the market. Baidu is currently the preferred search engine brand of 48% of Internet users, according to the China Internet Network Information Center (CNNIC)."

"Google topped the Keynote Customer Experience Rankings, an aggregate ranking of the consumer appeal of leading Chinese search engines based on an analysis of the 250 metrics measured during the study. In fact, Google outperformed its competitors in 11 of the 13 business success drivers measured in the study, including those for general search, news search and image search. But Alibaba/Yahoo! and Baidu were close competitors with Google in more than half of the 13 business success driver categories studied. Baidu ranked highest with consumers in the music search category, while Alibaba/Yahoo! was first for help and instructions. "

Microsoft Opens adLab in China

From Strategiy.com:

"Microsoft Corp. has unveiled the Microsoft adCenter Incubation Lab (adLab) during its adCenter Demo Fest, an exposition of industry-leading research and innovation in the field of digital advertising technology from Microsoft researchers.

adLab, a joint effort between MSN's adCenter and Microsoft Research, is a state-of-the-art lab in Beijing with a mission to research and incubate advanced technologies for MSN's adCenter, designed to provide advertisers with rich targeting capabilities based on audience intelligence information and give consumers a more relevant online experience."

"The adLab will be headed jointly by Ying Li, Ph.D., of Microsoft adCenter in Redmond and Jian Wang, Ph.D., of Microsoft Research Asia in Beijing, and will consist of a team of dedicated scientists with specializations in the areas of data mining, information retrieval, statistical analysis, artificial intelligence, auction theory, visual computing and digital media."

Beta Version of Chinese MSN Search Available

From ShanghaiDaily:

"MSN'S Chinese Website will soon launch its own search engine, a Beijing-based newspaper reported today. The Beta version of the Chinese MSN search will be available at http://beta.search.msn.com.cn/.

The launch of the new search engine will be decided by feedback from the test run, Luo Chuan, director of Microsoft MSN's China business, told Beijing Business Today.

Currently Yahoo! is the search function provider of msn.com.cn. The future MSN search will collect money from the bid-for-placement on search queries. "We won't charge common users for using the service," Luo said."

China Net Investor: The word "competition" gets a new definition.

List of main competitors in China's search market:

Baidu.com - China's leading search engine
Google.com - The world's leading search engine
MSN.com - Bill Gates' empire
Sina.com (iAsk.com) - China's leading portal
Sohu.com (sogou.com) - China's #2 portal
Zhongsou.com - Fidelity, IDG and Legend Capital-backed company.
Alibaba/Yahoo! - China's Dotcom Guru Jack Ma together with web giant Yahoo!

Related:
Tencent Joins China's Search Engine Club
China's Sina Corp Officially Launches New Search Engine iAsk
Chinese Portal Sohu Launches Upgraded Search Engine
China's Search Leader Baidu Intends to Stay Independent
Google Strengthenes China Subsidiary Management
Alibaba.com Re-Launches Yahoo! China As Search Brand
Yahoo! China Has 8 Months to Top Baidu or It's "Game Over"

China Internet Network Information Center: China Online Search Market Survey Report (PDF file)

China Video Game Industry Grows 52% in 2005

From Gamasutra:

"According to a report issued by China's General Administration of Press and Publications, released at the annual online game industry meeting in Xiamen on the 11th, the Chinese online (MMO and casual) game market continues to expand. The total number of online game subscribers in the country totaled 26.3 million, while income came to 3.77 billion yuan ($470 million USD); the figures are a 30 percent increase over 2004's subscribers and a 52.6 percent increase over the 2004 total income."

"The GAPP report also theorizes that the future of the online games industry may lie in online casual games and mobile games, both of which saw increases in 2005. Casual games accounted for 30% of the 2005 total online game revenue, and the number of online mobile games increased to 18, a number expected to expand more rapidly once 3G service is introduced to the country."

Related:

China Online Gaming Report

China's Top 3 Online Games

PriceWaterhouseCoopers: China's Impact on the Semiconductor Industry

PWC's annual update to China's Impact on the Semiconductor Industry.
(PDF)

Source: PriceWaterhouseCoopers

China's Richest Prefer Baidu over Google

From InfoWorld:

"China's wealthiest entrepreneurs prefer to use Chinese Internet search engine Baidu.com instead of rival Google, according to the results of a recent survey conducted by Hurun Report, a Chinese magazine.

Baidu is the preferred Internet search engine among China's richest entrepreneurs, with Google coming in second place, Hurun Report said. It did not give the percentage figures for its results.

On a regional basis, Baidu was ranked first in seven of 10 cities and provinces surveyed by the magazine. Google finished first in three of these regions: Shanghai, Guangdong province, and Jiangsu province, according to the survey."

Do China's Internet Companies Have a Shot at Dethroning the Likes of Google or Yahoo?

From adotas:

"“There isn’t any question that Internet use is already huge in China, largely because the country itself is so populous,” offered Ezra Palmer, Managing Editor of eMarketer. “We estimate that there are more than 23 million broadband households in China—making it the second largest broadband market in the world, behind only the U.S. (...)"

"Palmer isn’t hedging his bets on where China’s market is headed. “It will soon be the largest Internet market in the world, at least as measured by users,” he offers confidently. "

"Isn’t it possible—and increasingly likely—that China could come to take the reigns of the internet marketplace? Does a Baidu or an Alibaba in the making, some entity we haven’t even yet heard of, have a shot at dethroning the likes of Google or Yahoo as masters of the internet universe all the way from the Eastern hemisphere?"

"Palmer, who was willing to address the matter as well, also sees only bigger and better things in the China market, even if that means the U.S. has to hand over the blue ribbon. “International borders are no longer the barrier that they once were,” Palmer said, “so there’s no reason to think that a successful online company in China wouldn’t look to crack the U.S. as well.” And from a global business perspective, that might be just fine."

Forecasts about China's Internet and New Media Market in 2006

Press Release

Evolution from man-machine interaction to interpersonal interaction will create new business models in search and e-business fields.
Analysys International thinks that in 2006 interpersonal interaction demands such as community networking will become users' core demand for Internet services. Interpersonal interaction will deepen the excavation of original contents, explore the information sources and strengthen contacts between users and will result in the creation of community of online Internetservice and new off-line service model. For instance, the mode of community combined with e-business, search engine, Internet music and Internet education will be widely tried and become the key element for various services to create new business models. (...)

Typical WEB2.0 enterprises will be acquired by traditional Internetbusiness.
Analysys International thinks that the features of WEB2.0 represent the developing trends of current user demands. In 2006, traditional Internet business companies will acquire typical enterprises with advantages in WEB2.0. Transplant and integration of advantageous services from WEB2.0 will stimulate traditional Internet service growth.

IPTV standard will bottleneck the market development.
Analysys International thinks that in 2006, IPTV standard will become thefocus of all players in the industry chain. Although the operators and other vendors are trying to improve the industry ecosystem, the IPTV standard will bottleneck the market from making breakthrough development on subscriber and market size. But investment to the links of the industry will become the hotspot of investments.

Shortened channels will boost development of e-commerce.
Analysys International thinks that B2C and C2C service providers will enhance their promotion through Internet in 2006. New types of Internet marketing will shorten the channels to reach target users and push the right products to users by tracking and analyzing customer demands. This method will improve the personalization of network and improve reaching rate and user experience and propel the development of e-commerce in China.

Introduction of different solutions such as DRM and new technologies will change the business models of mobile VAS and drive the acceleration of industry structure under 3G.
Analysys International thinks that under the background of 3G initiation, introduction of new technologies combined with existing services will become the new drive to business model innovation on the new platform and propel thec hanges of industry structure. Analysys International thinks that theintroduction of DRM will boost rapid amalgamation and development of related technology criterion and standards, and constant innovation of business modes.

SOURCE Analysys International

Chinese Revolution Turns Hi-Tech

Form BBC:

" Sixty years after the revolution engineered by Chairman Mao, China is in the midst of a different revolution - of a digital variety. (...)

The country is already the world's largest producer of mobile phones, PCs and cameras, which it can churn out in their millions - and all because of China's biggest resource: people.

It is worth taking a minute to look at the statistics, because they are truly amazing. China is the world's most populous country, with 1.3 billion people.

On size alone, it is fast becoming a technology superpower and it almost has no choice in the matter. For example, even though only 8% of its people have access to the internet, this equates to 100 million people online, second only to the US."

Jack Ma, CEO Alibaba.com (Alibaba, TaoBao, Yahoo China) talks about competing with Google and eBay in China:
"They could be very successful in the US, in the West, but in China? No, because we're more entrepreneurial than them, in China today. They were very entrepreneurial 25 years ago, but today they're not entrepreneurial at all. They're very corporate."

China Becomes Second Largest Internet Nation

From ITWeek:

"China has become the world's second most populous internet nation, with 20 million new users going online last year, according to research announced this week.
The total number of Chinese surfers reached almost 120 million last year, according to a report from US-based research and consulting firm eTForecasts.

The top internet nation, measured by total number of users, remains the US, with 197.8 million, followed by China, Japan, India, Germany, the UK, and South Korea."

"China's Amazon" Dangdang.com Hopes for Q3 IPO

From Forbes:

"China's Dangdang.com, an online retailer and e-commerce firm, is hoping to list in the US as early as the third quarter of this year, the South China Morning Post reported.

The Hong Kong newspaper said the firm is hoping the listing will boost its market capitalization to at least 500 mln usd, citing Dangdang's co-chief executive Li Guoqing."

Microsoft Faces Backlash after Site of Prominent China Blogger is Deleted

From Forbes:

"Microsoft is again facing a public relations backlash after a Chinese web blog hosted on its MSN Spaces service was allegedly shut down.

The MSN Spaces-hosted blog of Michael Anti, a Beijing-based researcher for the New York Times, was closed down after he had posted articles critical of a management purge at Beijing News."

"The Beijing News had printed a string of sensitive stories, including on police beatings of villagers, as well as routine scathing editorials on a host of problems including corruption."


China's #1 Portal Sina.com is also being criticized for censorship

From Danwei:

"Yesterday Danwei reported news that the Guangming Group had taken control of The Beijing News — Beijing's best newspaper — from its more liberal and truth-minded joint venture partner the Nanfang Group. The Guangming Group is controlled directly by the Ministry of Publicity (neé Ministry of Propaganda), and it seems that most editors and journalists in Beijing believe the newspaper will soon go the the dogs under Guangming's leadership.

An editor at The Beijing News named Wang Xiaoshan responded to the hostile takeover on his blog with a post in large highlighted characters:
There's no way to retreat, so we won't retreat. The butcher's knife is already raised... We're going to die so let's make it a beautiful death.

But Wang Xiaoshan's blog is hosted on Sina.com's blogging service; less than 24 hours after he published his battle cry, Sina's censors deleted it from his blog, together with all comments that readers had made to the post."

Tencent Dominates China's Fast Growing Instant Messaging Market

Press Release (Analysys International)

(...) China's IM users have developed rapidly in recent years. The annual growth rate of IM users was respectively 140%, 92%,70% and 51% from 2000 to 2004. China's IM subscribers reached 81.52 million in Q3 2005, increasing 38% compared with Q3 2004.

According to Analysys International's research, Tencent QQ currently dominates the market with a market share of 79.6%. QQ ranks number 1, thanks to its innovation of successful business model. MSN Messenger is more favored by working people for its friendly interface, simple functions and integration with the Windows operating system. It has a market share of 10.08%, ranking the second in China. Sina's UC emphasizes at providing a quality interactive entertainment platform for users, occupying 2.23% market share, ranks third.

China Develops High-Speed Chip for Mobile Phones

From electricnews.net:

"According to the Wall Street Journal, Chinese researchers have developed the country's first high-speed chip for 3G phones using wideband code division multiple access, or WCDMA technology. Named Noah3000, the chip transmits data up to three times faster than the rival CDMA2000 technology, according to reports. The chip's designers have obtained 16 domestic and international patents for the device."

Siemens Enters Router Arena with Acquisition of Harbour Networks Products

From TMCnet:

"Siemens, the world’s third largest mobile telecom network equipment supplier, has reportedly acquired core assets of Harbour Networks Co., a broadband IP network equipment provider in China, for $110 million in cash.

According to a news report, Siemens officially signed the purchase agreement with Harbour Networks on Dec. 23. As part of the deal, Siemens will acquire the Beijing-based company’s technologies and patents for high-end broadband products, as well as about 100 of Harbour Network’s engineers."

"Siemens made news in December when it announced that it will be collaborating with Chinese broadband operator Shanghai Telecom and Shanghai Media Group to offer IPTV to 5,000 households in the Shanghai borough of Pudong at the end of February."

Related:
Siemens Breaks Into Chinese IPTV

Predictions for the Chinese Internet in 2006

Interesting predictions by Bill Bishop, CEO, Red Mushroom, a Beijing-based online game studio (Co-founder and former EVP & GM, CBS MarketWatch)


1. Tencent becomes the largest Chinese Internet company by market capitalization.

2. At least one of Shanda, Netease, The9, Baidu or Sohu sees its stock trade below its IPO price in 2006.

3. Shanda decides it can use its cash better elsewhere and places out its 19.5% stake in Sina, possibly to a large Chinese telecom company. Sina is after all the second largest news provider in China after CCTV, and I believe the government would prefer to have some amount of ownership concentration in the hands of another “friendly” shareholder.

4. The Alibaba show hits some bumps. It is easier to grow revenue from $0-60M than it is to go from $60M to $250M, and at some point the CEO’s showmanship may piss off the wrong person in China.

5. Netease’s game business will slip, as the spread of free games hits their core titles and commercial operation of their 3D game is delayed at least into Q4.

6. Google China does not get much traction and ends the year with the same market share it has today.

7. The blog business becomes dominated by major portals like Sina, and the standalone blog companies still do not have compelling business models by year-end.

8. At least one major US media company makes inroads in China, but not a lot of money, licensing its video content to one of the portals and/or IPTV services.

9. Kongzhong, Linktone or Hurray sell out to Netease, Sina, Sohu, Shanda or Tencent.

10. The mobile game market in China continues to underwhelm, due to the carrier distribution bottleneck.

You can visit his blog here: Billsdue

Please let me know your own China Internet predictions for 2006. (By email or by "comments")

The Dragon Learns to Code

From the Indian Express:

"The Haidian centre is the first, and largest, of the over 200 training schools that Aptech has established in 57 different Chinese cities since entering the mainland in 2000. Known by its joint venture with the Jade Bird group, an affiliate of the prestigious Beijing University, the company has maintained the top slot in the IT training market in China for four consecutive years. According to the China Centre for Information Industry Development, Aptech Beida Jade Bird captured around 19 per cent of the country’s IT training market in 2005, up from 14.8 per cent in 2004."

"Laxman Hemnani, Aptech Beida’s Vice-General Manager, is jus-tifiably proud of what they have achieved since the company first came to China. “The best thing we did was decide to go for a joint venture,” he declares. Given that China is a “very specialised market”, he feels that Aptech would have been lost on its own. “Aptech might be a household name in India. But in China, it would have taken time to build awareness about us.” Beida (as Beijing university is known), however, is one of the most powerful brands in China. “It’s every student’s dream just to have their photo taken inside the campus,” says Hemnani."

"If industry forecasts are to be believed, there will be a demand for around 800,000 new software professionals in China in the next three to four years. This is a glaring gap when compared to the 62,000 computer engineering graduates coming out of Chinese universities every year. Not surprisingly, the IT education retail market in the country is forecast to grow between 17 and 19 per cent annually till 2010, according to market intelligence firm IDC. In 2004, Aptech Beida’s revenues increased by 70 per cent over the previous year, to touch $40 million. “This is definitely a big growth market for us,” says Hemnani contentedly." "

China Declares War on Internet Pornography

From cnet News.com:

" "The spread of Web sites that involve pornography has been bought under effective control," Zhao Shiqiang, vice head of the Ministry of Public Security's Internet security and supervision bureau, told a news conference.

Police had detained 221 people and shut down almost 600 domestic pornographic Web sites as of the end of November, Zhao said.

"Due to the specialized nature of Internet technology, there are still some places where pornography exists," he added. "Harmful information on overseas sites can still be transmitted internally, and a minority of people try to use the Web to carry out illegal activities."