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Google China Chief Lee Kaifu Resigned

In a sudden move, Google China President Lee Kaifu said he would leave the company later this month.

But, industry insiders have been talking about that Lee Kaifu is only the face person for Google China for a long time. The real person in charge is John Liu, the head of sales, Google hired from SK Telecom in 2008.

Lee used to the only one left among the first batch of executives Google hired in China, now, every one of them has gone. This is in fact good for Google, as they are not the right kind anyway - too many of them come from multinational companies, and they are not familiar with local culture.

John Liu understands Chinese users and Chinese business environment better, if he is in charge and if he is also in charge of Google's R&D direction in China, Google can have a better chance of coming up with popular applications in China - and catch up with Baidu.

Lee's ideas are similar to Google headquarters’, but they seemed too sophisticate to the ordinary Chinese internet users - who are just young people looking for fun, and friend, online. That's why Baidu's MP3 and now Post Bar are magnet to them.

Foreign entrepreneurs in the China Internet

For people interested in founding their own ventures in the China, this week's article in Global Times might be an inspiration to them. Many foreigners worked in the country’s first Internet ventures. And many have arrived since. We look at several stories of westerners who founded their own companies in China – people who had only a smattering of Mandarin at the start and ended up running companies where everyone else is Chinese.

Dutchman Marc van der Chijs found China's leading video sharing site, Tudou, with his Chinese partner Gary Wang, a colleague of his wife, before setting up the Asian division of a Dutch online game company, Spil Game Asia. American T.R. Harrington found his own search engine marketing firm, Darwin marketing, after struggling for a few years. Read complete article in Global Times.

How eBay lost the China market - an insider account

This week's article at Global Times is about eBay. It is the Editor's Choice.

Many believe Taobao beat global online auction king eBay in China by being free, but not EachNet founder Bo Shao (the person in the picture) who sold the company to eBay in July 2003. A key catalyst was “migration”, the decision to terminate EachNet’s homegrown technology platform and move all EachNet users to the eBay US platform, said Shao.

On the day of the migration, traffic to eBay China dropped by half. Despite the serious customer losses, Meg Whitman, then CEO of eBay, only learned about it a month after it occurred, on a visit to Shanghai. Whitman was shocked and very upset. Apparently, even the head of eBay International at the time, who was one of the most ardent proponents of migration, did not tell Whitman about it. Read the article in Global Times.

Facebook joins forces with advertisers

Major advertisers finally embrace social networking sites. More than 80 per cent of the largest US advertisers are using Facebook to promote themselves, suggesting that corporate America has embraced the social networking site as a mainstream promotional platform. This marks a striking shift. Companies were initially hesitant to advertise on social networks because users appeared resistant to advertising and there were fears that corporate logos might appear alongside offensive content. Read article in Financial Times.

Yesterday's Xiaonei => Today's Renren

China's leading social network site, Xiaonei, changed its name to Renren, which means "everyone" in Chinese on August 4. (Read announcement from official site.) It is quite strange that an already famous brand would change its name, as this might alienate exisiting and potential users.

But, Xiaonei, which means "inside the school", might not be situable anymore, as the facebook-like online community is no longer just an alumni site for university students. Today its members include many office workers. In the future, people from all sorts of life might be its members, too. At least, that is the ambition of the site's CEO, Joe Chen, who wants to be the king of China's Web 2.0. Chen, through his company Oak Pacific, also controls community sites, Mop.com, Kaixin.com and several web game companies.

Industry insider said eventual Chen is going to merge his social networks with online games.

“In China, online games are huge. Social games and web games can be an important way to generate revenue on our site. A small percentage of paying users is enough,” said Chen in an early interview.

Alibaba: Opening global markets for small businesses

This week's article in Global Times is about Alibaba. Of all the China Internet companies, Alibaba is the most original. While others replicated successful western models, there was no booming western company doing what Alibaba does. Jack Ma (the person in the picture), an ex-English teacher, become one of the most successful entrepreneurs in the country by having the simple idea of setting up an electronic message board for small businessmen in China and entrepreneurs around the world to exchange trade information. Read more in Global Times

Xiaonei and 51.com - merging social network with games

Global Times, a newspaper in China, is running a series about the book- one article a week. It started in May 2009 and has been going on for the last 2 months. .

This week's article is about Xiaonei and 51.com - the Chinese answers to Facebook and Myspace. The two realized that merging social networking sites with online games could be a formula for success in China. Read Global Times' article.

The person in the picture is Joe Chen - China's king of Web 2.0. He owns Xiaonei and a bunch of other online communty / social networking sites

Youtube on track to turn profitable

Google said Youtube is on track to turn profitable - finally. The turnround is being driven by banner ads on the YouTube home page and “pre-rolls”. Read Financial Times article for details.

Its Chinese counterparts, Youku and Tudou, have yet to break even. But, at least, they seems to be on the right track. The majority of their revenue have been banner ads and “pre-rolls” ads when they formally introduced advertising program last year.

Youku and Tudou: leading with profession content

This is another of our articles at Global Times. It was the Editor's Choice on the publishing date.

While US-based Youtube is derived from homemade videos, Chinese video-sharing sites, such as Youku and Tudou decided to focus on professional content such as TV shows and movies. They were able to do so because the TV and film industry in China is highly fragmented. With close to 300 TV stations and over 1,000 production houses, finding partners is not difficult. Read more.

Wireless Value Added Services: Uncertain Future

Alongside the growth of China’s Internet market is the development of its wireless data sector. More than 640 million people have mobile phones in China and the mobile operators open their platforms for third parties to provide wireless value added services (WVAS) such as ring tone downloads and games.

Initially, they wanted to encourage third-party participation and terms were very generous. New companies such as Tom Online, Kongzhong, Hurray and Linktone flourished. But, starting in 2004, the mobile operators tightened controls and took part of the wireless value added services in-house. The fate of third-party players changed overnight. Many have been running losses since mid 2006. With 3G’s arrival in 2009, could it be another boom-bust cycle? Read the article in Global Times.

Other articles at Global Times

These are the other articles published previously at Global Times:

• Ctrip: redefine the formula of success in online travel Editor's Choice|Read
• Shanda makes comeback with free games|Read
• Shanda: The art of getting paid Editor's Choice|Read
• Turning instant messaging into a gold mine|Read
• Google's China odyssey Editor's Choice|Read
• Building China's largest search engine Editor's Choice|Read

The person in the picture below is Robin Li, founder and CEO of Baidu, the Chinese Google.

About the Book: Red Wired

At one point in 2008 the number of internet users in China surpassed those in America at 298 million, the most users in any one country in the world.

We have been watching, with great interest, the transformation of China’s internet for over a decade, and were curious about exactly what was taking place, and how it was happening.

This book is our “report on a work in progress” which we hope you, the reader, will find as fascinating as we do. China never fails to impress because of its scale and influence. It is easy to get carried away and forget that the character of the Chinese internet, and the experience for China’s internet users, is likely to remain substantially different from the experiences of those in the West.

The main theme of the book is innovation in China Internet sector.

- Every major company in the internet world has entered China – Google, Yahoo, eBay, Expedia, etc. But while they are the creator of the original models, it is their local competitors who innovated on top of the plain vanilla forms to get the major share of the limelight in China .

- The book tries to explain why particular internet business models did not work in their original forms in China . What innovations did the particular Chinese players make? And what is the outcome and lesson learned?

This book aims at helping the readers to gain a firsthand understanding of how the Chinese combined successful components from their Western counterparts with innovation, to accommodate the unique characteristics of the Chinese market.

About this site

We setup this site for our book, Red Wired: China's Internet Revolution. It will cover everything about the book, such as its progress, news articles about it in various publication, as well as some additonal materials of the book.

We will also cover the development of China Internet sector in this site. So, if you want to follow the dynamicof China Internet, stay tone.