Jack Ma’s Real Intention: Yahoo! or Alibaba?

Soon after Jack Ma gave his keynote at the China 2.0 conference at Stanford University, the U.S. media was flooded with news that “Jack Ma is interested in buying Yahoo.” At a time when Yahoo!, one of the world’s first Internet pioneers, is struggling, a Chinese suitor sounds particularly alarming.

I was at the conference. Ma started his speech by assuring the audience that his appearance in the States has nothing to do with “getting to Yahoo.” But no one seemed to believe him. Most questions directed to him were in the vein of: “Do you plan to buy Yahoo?” “Have you approached Yahoo for a deal?” “How are you going to buy Yahoo and when?”

Jack Ma’s answer to these questions was, not surprisingly, politically correct: “I am very interested.”

People who speculate that Jack Ma’s aim is to acquire Yahoo! may have missed the point. His real intention may very well be to expand his Alibaba Group to the U. S. market. “I want to learn one thing here,” he said, “how we can help U.S. SMEs (small and medium enterprises). What value we can create between us, Amazon and eBay.”

That has always been Jack Ma’s ambition. People who have followed his story may know his famous line: “eBay may be a shark in the ocean, but I am a crocodile in the Yangtze River.” Now, the crocodile is testing the water in the ocean. Will the crocodile turn into a shark?

Read the full story by me on Forbes: Beware of Crocodile Entering the Ocean.

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Remembering Steve Jobs

Last night, after learning the shocking news of Steve Jobs’ passing, I went to Apple campus to pay tribute to him. Here are a couple of photos I took with my iPhone:

Some people set up a little memorial for him on campus. They brought flowers and cards, lit candles, and stood in silence. It was a somber scene.

In remembering him, I am glad that I have all Steve Jobs’ creation: Macintosh, iPod, iPhone, iPad, and MacBook Air. He has certainly changed my life, and definitely changed the world.

Thank you, Steve. Rest in peace.

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Google’s Uphill Battle in China

While Google is considered too powerful in the United States – with “an online package of news, entertainment, blogs, and services drawn from all the world’s up-to-the-minute knowledge,” it is not in China.

According to iResearch, Google’s market share in China was only under 15%, down from about 25% earlier last year. Baidu, the Chinese search engine, has more than 69% of market share in China’s search-engine market. No double Baidu has an upper hand against Google in China because it has a deep understanding of Chinese users and their complex languages.

Most multinational companies found the China market is hard to crack. It took long time for multinationals to learn how to do business in China. The worst defeat was eBay – it shut down its China site last December and took a back seat in Tom Online, a Beijing based Internet portal that provides wireless value-added services with no experience in online auction business. Yahoo! had been in China for seven years. It finally threw itself to Alibaba, a local e-commerce company.

However, Google is not giving up. Recently, Google is joining China Mobile to launch a mobile-search-engine business. With more than 400 million cell phone users, China is the world’s largest cellphone market. Many industry observers are betting on the fact that Google is being favored among the business professionals – “in terms of future business development, Google does have a good base in China to grow on.”

The mobile search is critical for a country that has more than 400 million mobile phone users. But I don’t see why Baidu is not doing the same. In addition, how Alibaba comes to play a role in the search engine race is not clear. Google is definitely facing an uphill battle in China.

Innovation and Leadership

Themed around “Innovation & Leadership,” the HYSTA annual conference, a signature event of the Silicon Valley premier Chinese entrepreneurial association, drew over 1,000 people at Hyatt Regency Hotel in Santa Clara on Saturday.

The conference brought together some impressive speakers and panelists, including the visionary venture capitalist John Doerr, to discuss the topic of leadership. Despite my hectic schedule, I managed to attend part of the conference. It turned out to be well worth the time. It’s very interesting to hear people talk about the growing pain of developing business leaders as China moves toward the global economy.

One of the challenges is that, although Chinese are very entrepreneurial, many of them focus on short-term gain and lack long term vision and perseverance. There is a real dearth of leaders who can lead organizations systematically to scale. One panelist pointed out, traditionally, Chinese culture rewards mediocre players rather than outstanding souls.

On the other hand, some people tried to transport the leadership skills learned in the United States to China. That doesn’t necessarily work either, because the leadership skills required in this environment are very different from the leadership skills required there. While there is no easy fix to these challenges, here are some take-aways from the panel that can shed some light:

  1. Although some leadership traits are born, leadership ability can be trained;
  2. Great leaders are the ones who want to make others successful;
  3. In order to become a leader, one needs to have self-knowledge;
  4. In today’s world, it’s important to know what’s happening around the world and be well-informed;
  5. It’s not what you say or do, but how you make other people feel that matters

The evening keynote by Mark Thompson, who is a friend of mine, was very inspiring. Mark interviewed over 200 the most successful people in the nation for his book Success Build to Last. He defines success for leaders as making meaningful impact that really matters.

While Chinese are working on their leadership challenges, Americans are wondering when China will take over the United States to become a global leader – that was the exact question from the audience. No one can answer this question easily. But I believe strongly that Americans and Chinese have different strengths that can be learned from both sides. They don’t have to be in competition; they can complement and balance each other to achieve a better world.

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Chinese YouTube – Yoqoo

A new Internet video sharing site Yoqoo (??) was launched in Beijing last month. Similar to YouTube in the US, it allows users to generate short video clips and share online with their friends and families.

The founder is my friend – the former COO of Sohu Victor Koo! According to Victor, Yoqoo lets people to watch funny clips to relax themselves before they start their day at work or when they leave their offices in the evening. “That will be a new lifestyle,” Victor said.

Video sites that offer clip sharing are getting increasingly popular in the United States. For instance, YouTube has quickly become one of the most-viewed website, with users uploading 50,000 video clips per day. The video offerings of Google and Yahoo! have also generated a lot of traction.

What’s different about Yoqoo is it taps into the opportunity of the convergence of broadband Internet, 3G (third generation) mobile technology and traditional TV networks. With the country’s 400 million mobile phone users and 3G technology, Yoqoo will allow users to download video clips to their handsets.

As to business model, Yoqoo is targeting advertisements from TV companies and even film makers. It also expects some studios to post trailers at the site as part of their marketing strategy.

However, the question remains who would watch video clips and how to navigate the ocean of information overload. In my opinion, an aggregator site that can help users sort out useful and quality information will be critical.

It seems to me in the past when we talked about Internet, it was about text and pictures. Now it’s about audio and videos. User-generated content is the trend. As Yoqoo’s logo says: “?????” – the world is watching!

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Venture Capital Trends in China

China Venture Capital Forum organized by Zero2IPO made its Silicon Valley debut on April 24th – 25th at Crown Plaza Hotel in Palo Alto. More than 500 people attended the conference. Among them were venture capitalists, entrepreneurs, lawyers, and others who see the China market as the next big thing not to be missed.

With $4 billion raised and $1 billion invested last year, China’s venture capital industry has experienced exponential growth. The conference provided a platform for people to network as well as to discuss topics such as the capital market, regulation issues, opportunities, and strategies for deployment, etc.

A new message that highlights the conference is that China is moving away from its “world factory” image to “wealth-pursuing consumers” in world economy. Here are some key take-aways regarding opportunities:

  1. Internet is powered by mobile phones and remains the most promising area
  2. New wireless applications are evolving because of 3G rollout
  3. e-Commerce is picking up with great momentum
  4. Under-invested clean-tech creates new opportunities
  5. Multi-media advertising for consumer brands is yet to come

One of the top issues discussed is whether the market is over-heated. We have heard that there is too much money chasing too few deals. However, according to Andy Yan of Softbank Asia Investment Fund, the overall capital supply and demand environment is still in favor of investors, although some “hot” deals are getting increased valuations. Hearst Lin, partner of DCM, made it very clear that there is no bubble in China.

Another issue is intellectual property. Surprising to many people in the audience (but not surprising to me), the panelists don’t consider IP as a big problem. The reason is most technology companies in China are in application rather than invention. In China, it’s not always the technology play, but more the execution play. The most successful barriers for comepitition are not technology barriers but business barriers.

It’s a very interesting time for China. As someone described it in Chinese: ????? – “the real heroes arise in chaotic time.” Gavin Ni, the founder of Zero2IPO, used a picture of the tip of an iceberg to end his presentation for VC industry trends. He didn’t give any explanation except saying “a picture is worth thousands of words.” It could mean the mass of the market is still yet to emerge, or it could mean there is danger for The Titanic. It’s up to individuals to interpret.

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Valley’s Song – Google in Chinese

Google adopted a new Chinese name “??”?pronouncing “gu3 ge1” in pinyin. Literally, it means “valley’s song.” It’s very poetic and cheerful. The first thing that came to my mind was “a song from Silicon Valley,” or “a song flying from the valley to the sky.” Whatever it could be meaning, it’s really cool!

Whoever came up this name did a good job. I was very troubled by Google’s old Chinese name “??”, which is pronounced “gu4 gou4”. Although it sounds like google, literally it could mean “wandering and enough,” or “taking care but enough.” It really doesn’t mean anything, but whatever it could be meaning, it was really terrible.

Chinese believe names have potential influence on the fortune of business and its people. If you have a name that means “wandering and enough,” you probably don’t know what you are doing. If you have a name that flies and symbolizes triumph, you will probably fly and triumph.

Update: Some people do not like Google’s new Chinese name “??”?However, the alternatives they came up are much worse, such as “??”, which is pronounced “gou3 gou3”. It means “doggie doggie” in Chinese. Apparently, it’s a rediculous joke. No one on earth can see Google use a name like that. ?? is still by far the best name.

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Silicon Valley’s VC China Race

In 2005, China-based domestic and foreign venture capital firms raised new funds of $4 billion, setting a new record for VC fundraising in China. In the past couple of years, Silicon Valley’s top-tier VCs are rushing into China like never before.

Realizing the importance of being close to the market, many VC firms are setting up China offices with impressive local partners. Doll Capital, joined by former Sina CEO Hurst Lin as a general partner, held a grand opening banquet early this year in Beijing to formally announce its entrance in China. Sequoia Capital has also set up a China office with a fund of $168 million, led by Fan Zhang, the former head of DFJ’s China team. Other firms including Bessemer and BlueRun have all officially set up China offices either in Beijing or Shanghai.

Some firms are adopting different strategies in entering the China market. For example, instead of having China offices, Accel and DFJ are partnering with seasoned China-focused VC firms such as IDG and TGF. Mayfield is supporting the new China-based fund GSR Ventures (???), and NEA has collaborated with Northern Light (???), a fund started by Valley-bred successful Chinese entrepreneurs Feng Deng et al.

Even Kleiner Perkins, which has been cautious and conservative in investing in China, has added three partners with China business backgrounds (see my previous post), including a new partner Ying Lee who is the former Deputy General Manager of UTStarcom’s IPTV’s business unit. At his recent trip to China, John Doerr expressed serious investment interest in some deals.

It seems very crowded with VCs pouring into China. The opportunities, however, are growing even more rapidly than that, according to Zero2IPO, a Beijing-based venture research and consulting firm. The successful IPOs of Baidu and Focus Media have certainly set the expectation. Although there are still many pitfalls, the good news is that Chinese entrepreneurs are maturing and they are very savvy in terms of business model innovation. In comparison, the Silicon Valley entrepreneurs tend to more focus on technical innovation.

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The Next Net

Nowadays, Web 2.0 is a buzzword. Silicon Valley is steaming up again with excitement and a new breed of start-ups. While people are still trying to define what Web 2.0 means exactly, the word is often associated with Technorati, del.icio.us, and Flickr.

Yet, the Web is evolving quickly beyond the early pioneers into The Next Net phenomenon. The featured article by the latest Business 2.0 “The Next Net 25” defines Web 2.0 in the following five categories:

  1. Social Media that allows everyone to create content on the Web including articles, music, and video
  2. Mashups and Filters that mix, match and filter the information on the Web
  3. Internet Phones that make phone calls affordable anywhere around the world
  4. The Webtop Applications that make use of ubiquitous broadband connection
  5. Web-based Software Platforms and Tools that make The Next Net possible

Most of these things are already happening around us. For example, I am a heavy user of Gather – the social networking and blogging site that mirrors MySpace for teenagers. The Job search sites Indeed and SimplyHired look really cool to me. I have used Skype to call my family in China for free since long ago. Having seen the demo of Zimbra, I am very much convinced we are coming to an age that the webtop makes more sense than the desktop.

However, the biggest question is still the business model. Most of these sites are not making money at this time, hoping to flip to the big guys such as Google, Yahoo!, Microsoft, Amazon, and eBay. But, was that what people were hoping for only “a bubble ago?”

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Women’s Leadership Forum

In TiE Women’s Leadership Forum, Rayona Sharpnak, founder and president of Institute for Women’s Leadership, brought together three panelists from industry to share with a roomful of women their successful stories as female leaders, and discuss the topics that are mostly of concern by women in their career.

“Follow your passion” emerged as a theme of discussion. Amal Johnson, CEO of MarketTools, told us she was never qualified for any job she was looking for. What she has is her love of learning, and that has got her to where she is today. “Set your own metrics for success – it’s your life, and enjoy each chapter of your life.” was the advice Amal gave to the audience.

Meeta Mhatre, CIO for Siemens Medical Solutions, emphasized the importance of interpersonal skills, which was not taught in school, especially from a traditional Indian background.

Stacy Sullivan, Director of Human Resources at , gave a perspective on emerging core competences in corporate America from a hiring point of view: 1) team players who can promote the team’s success, 2) people with potentials rather than experience, and 3) well-rounded individuals who also excel outside their work areas.

It’s very inspiring for me to hear these women talk about their experiences and reflections. Many of them I can relate with my own. I found the ending remark by Rayona particularly encouraging, which I will use to end this post:

Success is moving from failure to failure without losing enthusiasm.”

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