Supergirl Fans Gathers at Baidu

We have heard that "Supergirls" are hot at post.baidu, but did not expect to see them this hot.

Supregirls are blanketed the top five stars on Baidu's bulletin board and they takes eight seats of the top twenty. Who cares Jackie Chen(ranked 88) or Zhiyi Zhang(ranked 167) these days?

The best part of post.baidu is "build what you want, talk what you think". Joining other fans to share your thought on your idol. Not bother by others, chat with friend and just enjoy your "own feelings". Maybe because this is a "self enjoyment" field, it has become a best place for the "sing what you want to sing" Supergirls.

We saw many long boards with short postings with fans just want to push up the rankings of their board to attract more friends in for their idols.

The "Queen" board of the Baidu's bulletin boards is unqestionably the "Yuchun Li" board. The kid is hot here. Baidu's Yuchun Li board is becoming the hottest place in China besides Hunan TV station, Supergirl Sound, Tianyu Music, and Taihe Maitian who had jointly held the contest. It is in this place where all the "corns"(Li's fans) gethers, communicate, and "guard" their idol. It is also here the fans are posting "DDDD" to push the rankings of their board up. We see a huge Broadway here where stars are rising on popular waves.

In this super hot "cornfield", the hottest spot is the board named "corns who thinking about Yuchun, talk to us what's in your heart". The board started on Aug. 29 when Yuchun had won Supergirl already. The founder has followed the common style of post.baidu by maintaining only one board. The place suddenly become the most popular place with many postings from "corns" who are expressing their feelings for their idol. Perhaps they are feeling the Supergirl will be further and further away from them, their postings often filled with deep love and sadness. "The only thing corn wants is a smile of Yuchun" is a very common theme of their postings. Many postings are attached with pictures, video clips, and ringtongs. The board has become a "Yuchun Biography". The board has seen 430,000 visits, over one thousand pages, and over 60,000 replies and it's still growing. Here we are seeing the power of the "corns".

No need to go any further, you can imaging the crowd and contents in other "Supregirl" boards. These are images of popular entertainments with popular idols. Post.baidu is perfect in timing to provide this interactive, self-entertaining ground for the people. Inside the popularity of this place is the hope of "self choice" deep inside our heart.

by Chunshui Yiren

Netease Started Campus Recruiting

Netease started it's 2006 campus recruiting effort.

The company is on a recruiting tour of 12 cities with visits to 15 top ranked colleges in China. The company is on a path of strong profit growth from it's online gaming services.

The company has been very successful in the two XY games that often attracts over one half of one million players at the same time. The company makes the majority of it's profit by charging players' online playing time.

Many players are addicted to online games in China. A mother once stood up in a crowded audiences and said she wanted to shoot William Ding, who is the founder and now the Chief Architect of Netease, because she could not find her son in a few days after he went to play online games with friends day and night.

The government is now trying to enforce a 3-hr limit on contineous online playing time. However, most observers think such limit will unlikely to dent the enthusasm of these players and will not be effective at all.

According to Netease, the company is looking to recruit about 100 college graduates in the fields of IT, marketing, strategic planning as well as art.

The online gaming has jumped 4 fold last year and the competition is heating up. To keep it up, Netease is looking for college tallents to aid it's development effort in online gaming services.

Huatong

Netease Testing Wireless Game

Netease started testing of a new wireless MMORPG online game called "Among the People".
It will be the first large scale online game ever released on mobile phones. Players can join the interactive online play and making connections with friends through a wireless handset.

Netease's two online games (the 2 XYs) are super popular in China. The company expected to report earnings on Nov 7. Due to the success of the two XY games, Netease should report quarterly earnings that will come in much higher than the average estimate.

Perfect Show of "Perfect World"

In ChinaJoy's "Golden Feather Award" ceremony for electronic games held yesterday, Perfect World scored three "perfect 10s" by wining top awards in three categories: Best original; Most expected; and Best 3D graphics.


Netease also had an excellent with "Double awards" for it's "Double XYs". In Total, Netease won six awards.

Baidu's Outlook

Baidu reported earnings after market close on Oct. 26.

The management was very upbeat on the conference call held later.

We are growing more confident about Baidu's future for several reasons.

1. One main negative thing in the past was the MP3 controversial in which Baidu has lost to Shanghai Push on one lawsuit. Baidu's management insist on keeping it as a free search service and claimed it neither store MP3 files nor providing download services and Baidu does not receive any payment from either the users or the third parties.

Many legal experts predicted also Baidu would lose a bigger case where several largest music labeling companies filed lawsuit together against Baidu. The reason was based on politcal concerns(Chinese courts are still very much subjected to political pressure). If Baidu wins, the whole western world will all cry foul on China(maybe rightfully) on IPR piracy that would make a not-quilty verdict impossible.

If Baidu shuts down MP3 service, the consequence will be severe. Baidu derives about 20% of revenue from MP3 service by showing advertisement on every page that leads to a third party download link.

In recent days, Baidu has been moving on both fronts. On the defensive, Baidu has been trying to negotiate with the parties involved and so far less fruitful but slightly warming up. Baidu has followed court instructions by placing an addtional interphase page with IPR warnings between Baidu pages and the third party downloading page in hope to limit potential damage claims if the case lost in the future.

On the offensive, Baidu has signed agreement with HURRAY and started a new song releasing service last week for a Chinese movie super star turned pop star. The deal struck hard on the labeling companies because Baidu's MP3 service has in fact are quite helpful for them. If a song ranked high on Baidu's MP3 search, the service providers often come and stuff "stacks of cash" to the song distributer's pocket. In certain sense, Baidu's MP3 has become de facto ranking service for songs.

Many smaller players have already in constant contact with Baidu on MP3 alliances. Many internet experts also predicted that it is an irreversible trend that digital music will be distributed digitally through internet. Baidu's huge audience is also too attractive to be ignored by music distributors.

Baidu just started a new service called "Grand Music Alliance" or mu-zone.baidu. The page looks just great. It shows a picture of an singer with an album list with trial listening links as well as links to fans' bulletin board and news. Each page looks just like the home page of the singers. It's a dramatically better site with user friendly experience than Yahoo's music site where graphic rich advertisements occupying half of the page.

What everybody would agree is that Baidu's MP3 search is the best in the world and many music distributors are not willing to be shut out of Baidu's MP3 search completely. What many of the these "greedy" (Steve Jobs called them) companies in mind is probably trying to get a bigger share and force Baidu into negotiations with them for paid services.

We do not forsee a result of complete shut off of Baidu's MP3 service. Baidu may choose to drag on the case in appeals until the mu-zone.baidu grand alliance getting bigger and stronger, then the other players will have no choice but to succumb. The internet users have demanded to access digital music digitally and no one will be able to refuse that. There are also more than enough singers in China are willing to join Baidu's music alliance soon. If they can also grab a few popular western singers to release a few new songs on Baidu, that would be the end story for music labeling companies. It is pretty much similar to Google Print situation.

2. Google's competition

The largest threat is of course coming from Google. Google's competition started a few years ago when they hit hard on Baidu around 2002 with it's Chinese search service. But Baidu came out as the winner through a hard fought battle with the legendary "lightning plan".

Since three months ago, Google finally started to push into the Chinese market. They have announced three channel partners in China for ad services. They hired Kai-Fu Lee away from Microsoft to be its CEO of China operations and later hired Johnny Chou as president for sales and marketing development. In September, Google succeded in joining the free but vast CERNET in which Google was excluded in the past. No one can underestimate the power of Google.

However, a few months past, we have not seen significant inroads made by Google. At least not yet. Baidu's traffic rating went up one notch to the number 4 in the world on Alexa's ratings. There are several complicated reasons behind that.

One is that Google is still hesitating to have a server farm set up in China in fear that a government filtering of contents could hurt Google's brand.

The result is that Google has no effective Chinese news service where Baidu has become the strongest player in China. As revealed by CNNIC survey, the majority of users access internet in China for news. And the majority of news accessed are entertainment news.

We have not yet seen Google's Chinese news service even it started Chinese search many years ago and we don't expect Google to chllenge Baidu's position any time soon. As long as we don't see any dent on Baidu's market shares in Chinese search in significant terms, Baidu's future remains very bright.

Baidu's strategy is to win by sharply focused on Chinese search. The management think only by doing that, Baidu can be unbeatable because Chinese is only 5% in Google's index. By that measure, Google needs twenty times more effort in updating it than Baidu's.

After Baidu's recent upgrade of it's data center, we have indeed seen significant difference in Baidu's search results from Google's. Baidu's search results are much more updated and faster(ave. 0.01 second vs 0.5 second). Baidu's results are mostly upto the moment while both Google's and Yahoo's can be one to two years old.

Another drawback for not having servers located in China is that the cross-pacific bottleneck has slowed down many sites in China by Google's ads. We have seen many complains on network slow down and the warm reception for Baidu Union, an Adsense-like service from many bulletin boards. The service started three months ago and so far only attracted some small sites. We have not seen significant presence of them in more popular sites. Baidu's management indicated in the conference call that they would put more effort in pushing the Baidu Union services.

Another attractive part of the Baidu Union is easier and faster to get paid than Google's Adsense. Baidu has signed ICBC and China Merchant Bank as payment service providers. The two banks owns more than 50% market share of online payment services in China.

We have also seen many reports mentioned that college students are moving from 100% Google to 50% Google and 50% Baidu. Previously, CNNIC reported that higher income internet users tend to use Google more. We think it is a slightly mis-interpretation. The real reason is probably more depending on the English level rather than income level since higher English level is closely associated with higher income level. On Chinese searchs, people definitely prefers Baidu in a large margin. Baidu's management also mentioned today that more Chinese are satisfied with Chinese only searches.

On the commercial market, we have not seen significant presence of Google's advertisers after a few months. Even search for hot keywords such as car or music, you still don't see any ads appears on Google's search page yet.

As more and more people are "google it" in other parts of the world, "Baidu Yixia" is planting deep roots in China. The trend will be harder and harder to reverse. Our analysis does not see how Google's taking over Baidu as the largest Chinese search service in short term and probably in many years as long as Baidu stays as focused as they are now.

As long as this situation not be changed in significant way, we predict a strong pick up in Baidu's revenue continuing the trend in last two quarters. Multi-nationals are eager to gain access to China's gigantic and fast growing consumer market and they are putting more money in advertisement and more and more of that are going into search engines. Baidu as the largest Chinese search engine will be the first beneficiary of this tidal wave. Since almost all of their products are already Chinese-branded, there is not much need to put those in English searchs.

Indeed, many of these companies are already Baidu's customers. We have seen dramatic increase in ads from eBay, Dell and other US companies on Baidu recently. Many companies such as Intel, Cisco, Dell, even IBM are deriving somewhere from 10% to 30% of their revenue from Chinese market. It is reasonable to expect that they will spend more and more on Baidu. We are also seeing many ads from automanufactures such as GM as well as consumer giants such as softdrink and coffee makers and P&G.

Baidu has also been able to come up with comparable and sometimes better product offerings from Google such as Adwords, Adsense, and desktop search. Baidu's post.baidu is performing much better than Google's groups. Zhidao.baidu or "Baidu knows" is also gaining grounds rapidly and could be a huge magnet for internet users.

In a fast growing economy and evolving search engine market, Baidu is up in the front. With many tallented and devoted employees from the number one and number two colleges in China with a similar Silicon Valley culture as Google's, we can expect to see Baidu to become one of the greatest Chinese company or maybe one of the greatest one in the world.

Baidu Reports Earnings on Wed

Baidu will report earnings after market closed (probably either around 5 pm, which is the morning time of working hours at 8:00 am Beijing time or right before the live conference calls at 8:00 pm. 11 am Beijing time)

Here is the link to Baidu's live conference call

Baidu is expected to report revenue growth of about 170% and earnings growth of over 400% year over year. ($11 million revenue, 7 to 8 cents earnings per share).

Following figures are all in thousands of dollars:

	Q1, 04	Q2, 04	Q3, 04	Q4, 04	Q1, 05	Q2, 05	Q3, est.
Total revenues	2,219	2,981	4,001	5,299	5,639	8,421	11,000
Net income	128	205	363	786	309	1,456	2,050

Many things Baidu has done right and well lately. (more things on Baidu's future outlook will be posted here soon)

Update: Baidu reported revenue of $11 million, income(exclude some expenses such as upgrade of it's data center, employee options compensation) of 7 cents. We were right on!

	Q1, 04	Q2, 04	Q3, 04	Q4, 04	Q1, 05	Q2, 05	Q3, 05
Total revenues	2,219	2,981	4,001	5,299	5,639	8,421	11,000
Net income	128	205	363	786	309	1,456	2,400

Hurry, HURRAY!

HURRY is a small wireless tech service company from China and it is listed on Nasdaq(HRAY). What's new about HURRAY is their annoucement on a music downloading deal with Baidu a couple days ago.

The company's financial preformance looks quite outstanding in the last two years. Revenue grew from $23.1 million to $53.4 million and net income grew from $4.5 million to $17.2 million in year 2004 over year 2003. The company is trading at only $200 million market cap and PE ratio of 11.

Sounds like dirty cheap, isn't it?

One big problem with the company is the technology they are serving is dying. The WAP service as a 2G technology has no future for 3G data intensive applications. In the latest Quarter, HURRAY showed just that. Though a 25% growth over year ago quarter, it only grew merely one half percentage point over previous quarter.

However, the company has all the technology at hands to serve the 3G wireless market which will finally kick in either at year end of early next year.

What is a big hidden jewel in HURRAY is the wireless music downloading business. HURRAY has already allianced with the largest mobile operator in China, China Mobile that takes care of online payment for the service.

In May, HURRAY released a single song exclusively through the wireless service which has garnered around $200,000 dollars. Three days ago, they signed alliance agreement with Baidu to release a new song from a movie super star turned pop star exclusively through Baidu and their own wireless downloading service.

Today, HURRAY again signed agreement with management company of Supergirl second runner-up Liangying Zhang (who is very hot in China) to market her next album exclusively through HURRAY's wireless service.

The latest arrangements are good indications that the company is remodeling itself from a 2G wireless player to a 3G multimedia wireless player. The 3G wireless service market has tremendous potential in China as long as it starts soon which is much less uncertain day by day.

The company is going to release 3rd quarter earnings on Nov 14. It worth a close watch and listen to what management has to say about the latest arrangement with Baidu and result of the first two-week's downloading performance which is attractiing huge crowd on Baidu.




Huatong

Netease to report earnings on Nov 7

NetEase.com Third Quarter 2005 Announcement Conference Call 7:00 pm Eastern Time on Monday November 7,2005 (Beijing/Hong Kong Time: at 8:00 am on November 8,2005

Link to the Webcast

Netease expected to report great earnings.

During the quarter, the two online games DHXY II and MHXY were doing SUPER good. As a measurement of success, they have reported broken neck speed of record settings for live online gatherings. First in 500 thousands, then 600 thouands, later 800 thousands, and as late as October 23 on MHXY with over 900,000 players joined online at the same time.

The registered users of MHXY is also surpassed 52 million.

Both games ranked top ten in the latest ChinaJoy voting results which will be announced in two days. MHXY won awards from three different categories. Regrettably, Netease's next big hit "Datang" missed the "top ten most expected games" award.

The tremendous popularity of the two games should be proved to be huge profit makers for Netease in the last quarter.

Looking forward, the online gaming industry is facing some challenge though. Notably the 3hr restriction on continous playing time could limit the online playing time which is directly connected to how online game's revenue is generated currently.

First Report on Yahoo/Alibaba Integration

First report on Ya/ba integration: Taobao fighting with eBay to see who "burns money" faster

21CN economic report by Zhonghui Lei from Beijing

Oct. 20, Alibaba announced increased investment of 1 billion yuan(about $120 million dollars)in Taobao and also annouced that Taobao will be free for listing for three years.

Dongyu Sun, general manager of Taobao said that in the next three years, users can still enjoy free store renting, product registration, and deal completion services. "Taobao hasn't make any money, and will continue to invest in three areas, these are customer service, secure trading, and brand building." Each of the three areas would take about one third of the investment.
　　
Far away in the US, eBay release a global annoucement---"free is not a viable commercial model. Taobao's announcement only indicates our strong growth in China's business." The annoucement came in a few hours after eBay's third quarter earning report.

Market analysts think, the announcement of eBay's increased investment of $100 million dollars in Eachnet and Alibaba's announcement of investment of $120 million dollars in Taobao indicate the China's C2C e-Commerce is entering a decisive battle. It could be time and resource consuming period for both.

"The investment is not coming from Yahoo"

Added investment in Taobao is the first large investment made by Yun Ma(founder and CEO of Alibaba) after the Ya/ba integration. It is also the third investments by Alibaba. Sun said that the total investment has amounted to 1.45 billion yuan($175 million). "the previously invested $55 million has not been used up yet".

A few days before the annoucement, Alibaba and Yahoo.China's executives held a strategic meeting in Zhuhai and the decision was made in the meeting.

According to sources, the Ya/ba integration is in the final conclusion. Oct. 21 is the last day and the details will be announced at the end of the month.

Sun denied that the money is part of the conditions from Yahoo and indicated that it is from Alibaba's fund. "Alibaba has enough profitability power to invest more money into Taobao. It is not coming from Yahoo's $1 billion cash investment in Alibaba".

Sun indicated that the integration with Yipai, which is a joint venture between Yahoo and Sina, will have detailed plan announced soon. However, one thing is certain that "the money for purchasing Sina's holding will come from this announced investment and not going to be a large sum".

Sun explained that the addtional investment is needed because "Taobao has been growing super fast since it's establishment in July, 2003. In the first three quarters, the total trading volume has already surpassed 5 billion yuan. Third quarter alone has reached 2.34 billion yuan. Membership also reached 10.04 million. Taobao hopes to create 1 million job opportunities in the next three years in the online personal trading market."

Advertisement leading the fight

Oct. 19, eBay released third quarter earnings. Revenue reached $1.106 billion and a 37% annual growth. Net income was $255 million or 40% growth over a year ago. In the report, it specially mentioned that they have acquired 2 million new users in China to make it total of 15.1 million.

eBay also cited iResearch's recent data that shows eBay/Each owns 65% of Chinese online auction market. However, for two quarters in a roll, eBay did not reveal the total trading volume in China.

Intrestingly, Taobao also announced that their updated market share is around 60%. Nobody knows which of these two data is more objective reflection of the market. It is unquestionable though that Taobao and Ebay/Each is fighting everywhere on the C2C market.

Related person at eBay/Each indicated that, as the C2C market evolves in China, the almost exclusive market share of Eachnet will fall inevitably. "however, the number of members, and the total deals are growing very fast".

In January, this year, eBay annouced addtional investment of $100 million in Eachnet; in May, it announced the reduction in transaction fees; in July, eBay announced the introduction of Paypal in China. eBay's CEO Whitman admitted that the series of moves are aimed at occupying the market early.
　　

Market analysis indicated that, after Taobao announced the free listing, the fighting between the two sides will first appear at the battle ground of brand establishment. eBay/Each's ads have already occupied many protals' website. Because many are exclusive deals, the several largest portals such as Sina, Netease, and Baidu are on eBay's side. Only Sohu has signed strategic alliance with Taobao. However, Taobao has also attracted thousands of personal or free communities into it's own camp.
　 　
"Secondly, it will raise the barrier of entry and slow down the potential competitors on gaining market shares". There was news that DangDang net intends to invest $50 million to create a new C2C website. Tencent is already established "Paipai net" on it's community oriented areas.

Breaking News: Baidu's First iTunes

Oct. 23, Baidu and HURRAY, a wireless value-added service provider jointly announced the web release of Hao Chen's solo "I'm on this side of the world". Internet and mobile are the only channels for the song. It will be first song ever solely released through the internet in China.

Hao Chen is a movie super star in China

After acquiring the releasing right of the solo from Hao Chen, HURRAY is working with Baidu to place a link for trial listening and download through Baidu's search engine.

It is the first attempt for Baidu to transform it's MP3 music search service after suffered a legal defeat.

Previously, in a law suit filed by EMI's subsidiary, Shanghai Push, Baidu was convicted for violation of IPR for providing illegal download of MP3 music. Baidu has denied the charges in stating that Baidu neither providing storage nor providing download services of MP3 music. Instead, Baidu's MP3 search only provides search functions.

In the news conference today, Baidu's CFO Shawn Wang also revealed that, Baidu has been in discussions with many top music distributors on the topic of MP3 music on the web.

Before this, HURRAY had tried releasing new songs through mobile network services. In May, HURRAY release Long Pang's "Two Butterflies". It brought 2 million yuan($245,000 dollars) revenue to HURRAY for that single song. They indicated that through both the web and the mobile network, new songs can be spreaded faster and to wider audiences. Through mobile and web paid services, it will also help digital music improve it's industry chain structure.

(Lei Jin from tech.sina)

more on the news -

Today, Hao Chen appeared at Baidu as a singer. Spokesman from Chen's manager, Chentian Music indicated that, China's music industry is undergoing media revolution. By reducing middle steps, Digital music can cut cost for sales and distribution. The Combination of Baidu's web search and HURRAY's mobile channel is the most efficient carrier of digital music.

Baidu's vice-president Dong Liang said at the news conferrence that, the collaboration between Baidu and HURRAY will establish a new model for legally downloading digital music. It also indicates our strong support for stopping music piracy. Baidu also wants the whole industry to know that, the fast and convenient way of music distribution that Baidu and HURRAY created will surpass the traditional distribution model and becoming the future landmark for music industry.

According to International Music Industrial Association, the first half of 2005 saw a tripling of sales of digital music. It reached $790 million dollars and a 6% share of all music sales. The reason is the increase of 3G mobile phones, broadband internet access and mobile music players. All these factors have led the dramatic increase of digital music sales.

With such attractive market prospect, HURRAY's vice-president Feng Wu indicated that the web and mobile have become the most efficient distribution channels for digital music. It is an irrversible trend. The innovative combination between Baidu's web search and HURRAY's mobile service will not only effectively limits the music piracy, but also will start a major revolution in digital music.

Industry analysts indicate that, as the crisis of music piracy precipitate in China, this new collaboration will establish an good example for joint effort of all sides of music industry including music companies, internet, operators and service providers. It will not only create a new model connecting production, distribution, and sales of digital music value chain, but also change the ways of music creation, IP management, and market distribution. It will help the market development of China's digital music industry.

(Ge Yu from Chinabyte)

On Baidu's MP3 web page, there is a new center button labeled "Baidu's Grand Music Alliance Formally Started". Following the link, it appears a description page on the singer Hao Chen and all her titles. However, no news announcement from Baidu on this alliance yet.


Separately, facing the huge legal pressure from music industry, Baidu has followed the court instructions by inserting an interphase between search links of MP3 files and download service providers with an warning on IPR.

Chinese links

Baidu's CEO Voted Number One

China's Top IT Businessman Of The Year For 2005

The year 2005 is an earth shattering year for China's IT industry.

It is a year that China has moved from a large information country to a strong information country. It is a year that IT companies are searching in multi-dimensional ways for competitive strength and profitability.　It is also a year people are choosing reasonable means on solid ground rather rushing and directionless moves. More importantly, it is a big year of tallent show.

After planing and working for over a month, involving sampling, screening, recommending candidates, and expert selections, the third annual "Business Times Top IT Businessman of The Year" selection was finally revealed.

Sponserd by Chinabusinesspost, Xinjing Daily, Internet Weekely, Sina, Sohu, Netease, Tom, Tencent, Hexun, Yahoo.China, eNet, Chinabyte, CCIDnet, 21CN, IT168, BlogChina, Qianlong, Zhongguangcun Online, China Economy, Zuoyuo, Taobao, China Education, Tixa, Discloser, China PR News participated in the selection activity.
Top ten IT businessman(two females among them) were selected. Baidu's Hongyan Li has been voted number one.
Hongyan(Robin)
Qulifications: Founded Baidu and led it's IPO on Nasdaq on Aug. 5. Baidu's IPO broke record for single day appreciation of all foreign stocks in the US market's 213-year history. Sharply focused on Chinese search, Li has ascended to the brightest star of China's IT industry.

Focus is what he differs from others. That have led him to the invention of ESP search technology and it's integration into Infoseek/go.com's search engine. His focus also led the solution of ranking based on web page quality and relevancy. That focus also helped him design Go.com's image search, bid ranking, and the leading MP3 search technology. His focus is also helping Baidu in wining in world's second largest market, China's internet market by beating Google by more than 10 percentage points in market shares.

The 37 year old Li does not have complicated resume. He graduated in 1991 from Peking University majoring in information management. Later he went to the US for graduate study and worked for several multi-national companies in the US. Many years effort finally paid off for today's Baidu.

Netease Journeys West to Dell

On Oct. 18, China's online gaming leader Netease and World's larget PC maker announced in Beijing a joint sales promotion. The activity will last three months.
The most popular domestic made online games "Journey to The West-Online II" and "Dreaming Journey to the West-Online" will be fully ported to Dell's Dimension desktops and Inspiron notebooks.

In the three-month period, users with purchase of low end Dimension5100, Inspiron6000 to high end Dimension9100 and Inspiron9300 will get a discount. At the same time, they will receive Netease's "double package" with maximum 1000 free online gaming hours on playing the two XY games.

Sohu Search's Bleak Future

Time is running out for Charles Zhang.

Less than two months ago, Charles Zhang claimed that "It takes only one year" for Sogou(Sohu's search engine) to surpass Baidu. He has put his money in where his mouth is by bought his own company's shares worth $4 million dollars.

He might be making a big wrong bet.

Two months passed, we have not seen any significant increase in Sougou's traffic or erosion in Baidu's traffic. With Sohu's shares sits near all time low, Zhang's only brilliant strategy is to hold a "Sogou Web Supergirl" contest. Having spent one million yuan to buy the right to hold the web part of the contest, he might hope to rejuvenate his falling stock. Instead, it may not do much at all to his company's long term business.

Sohu has claimed that in the last few days, the interests in the contest has been dramatically increased. Many have criticized Sohu for slow to release instructions of the contest on the web. With the Supergirls still super hot in China, this web contest looks like a disaster waiting to happen due to it's poor organization as well as too close to the Supergirl event.

Let's look at what happened in the US. A few months back, media was having a fanfare talking about how the much improved MSN search engine and Yahoo search engine were going to post major threats to Google. After a few months, what we saw was that Google had added more shares to it's already market commanding shares.

The conclusion is that, for a search engine, internet users demand nothing less than the best. Second best(in Sohu's case, Sogou may be the third or fourth best, though Charles strongly disagrees) is just NOT going to make it.

Unless Baidu, who has followed(or copied, here Robin Li would not agree since he had worked on search and has patent on search well before Googler started) almost exactly paths of Google(such as clean and simple front page, Adwords, Adsense, desktop search) with matched products and services which have comparable quality or even better in some cases.

While Charles Zhang seems does not get it. He is still using the old styled "Overture model" which was easily defeated by Google's Adwords model. And his Sogou isn't providing anything superior that would pull away customers from Baidu. What even worse, the name Sogou is causing confusions with the good brand of Sohu. Conveniently, many Chinese call it "skinny dog" instead of "search dog"(sound alike in Chinese).

The flamboyant(or confident) Charles rumored to have married a teenager who bearly passed legal age three weeks ago though he vaguely denied later. It was also rumored that he had spent millions to buy flowers from South America for his wedding. Not to invade into Charles's private life too much, but it certainly does not look like he is super- focusd on his company's business.

Besides the search engine Sogou, what else can save his sinking ship?

After researched on possible investing in Sohu, We decided to pass.

Huatong

Shanda to report

Shanda to report earnings on Nov. 9

Live Webcast

We expect Shanda to report a good quarter.

However, we do not see significant moves of SNDA in a short term for a couple of reasons:

1. Competitions getting stronger

Shanda's major earning power is in it's online games especially the MMORPGs. In the last quarter, similar games from the9.com and Netease continue to overshine Shanda's and the pipelines of competitive new releases will continue to erode Shanda's dominant market share position.

2. Taking over attempt continue to drag

Shanda's attempt to take over Sina.com will continue to drag on. First, we think it's an unwise decision to go hostile takeover for Sina because the trend of moving away from portals to search engines by internet users is too powerful to ignore. Secondly, the fighting over the control of Sina.com is going to interrupt Shanda's focus inevitably.

What's in Shanda' future?

Shanda still is the dorminant player in China's gaming market. Shanda also owns the most extensive sales network in China which has attracted many partnerships.

Shanda is also betting heavily on the so-called "Shanda box". They have demonstrated the EZ Station and EZ Pod in the just held International Communications Forum after formally annouced their joint product with Mitac, the EZ Mini a day earlier.

The major strategy to use the EZ Station and EZ Pod to occupy the most living rooms in China. It is pretty much similar to what Microsoft has been "TALKED" about in the last ten years of "interactive TV". So far, the receptions from the media are very timid and we see this strategy as very risk for Shanda.

First, we also do not see many specific functions in the EZ Station and EZ Pod that could make these products very attractive. Secondly, since these products carry very low profit margins and we have not seen clear strategy from Shanda how they are going to derive value-added services from these products. Whether these lines of product will be successful is a big question mark.

One thing could potentially propell Shanda up is the EZ Mini product. The product is revolutionary and so far very well received in China. It combines a handheld device with internet gaming. Shanda has indicated they might move the device into an open platform for gaming development. China's wireless market has been expanding very fast. With broadband 3G expanding soon to happen, value-added wireless gaming could have huge potential both in China and in the world. With first move advantage, Shanda could collect a very handsome payout from the services.

The product also looks like less threatened by Sony's Playstation line and Microsoft's xBox line. The EZ Mini likely to be sold at much lower price but with better choices of internet games that are more community oriented and cheaper to access.

Huatong

From eBay's to Baidu

eBay reported another excellent quarter today.

Inside the report, we take a look at eBay's Chinese business:

As a global e-commerce giant, eBay had outstanding performance in the fast growing Chinese market. Both total trade volume and revenue had rapid growth two quarters in a roll. Online market started to take off in China in recent years: The online auction market size grew 217.8% in 2004. Total finished deals reached 3.4 billion yuan in 2004 comparing with 1.07 billion in 2003. In the same year, number of individual traders doubled from year ago. If the trend continues, this year likely will grow even faster. iResearch reported that eBay/Each has taken a very solid lead with 65% of total market share in China.

eBay's chairman and CEO Meg Whitman was very pleased with the company's performance in China: "eBay achieved excellent result in the Chinese market. Both trading volume and income achieved rapid growth. Trading platforms are more dynamic and are providing buyers with wonderful deal prices and deal completion rate. eBay has acquired nearly 2 million new users and that increased the total numberof users in China to 15.1 million. It becoming the largest Chinese online trading community. One of the big seller on Ebay/Each told me recently that eBay is the only online trading market that allows a seller to develop long-term business. I am very satisfied with our progress in China and very pleased with the dynamic e-commerce environment eBay is creating for the new generation of internet users."

eBay's CFO Rajiv Dutta said that: "In China, the dramatic increase of landed products and high deal completion rate has boosted total trading volume and income. We have worked very hard to attract new users and increase online trading activities. Combining with our great effort to create the most reliable web site for Chinese users have enabled us to achieve this amazing result. The booming local business and the fast growing export business has solidified eBay's industry position. We are extremely happy about it".

eBay's results - good news for Baidu

Recently, eBay has becoming one of the largest customer of Baidu. eBay has put advertisement on virtually every Baidu's search result page to attract new users as well as lure old users back. The intense competition between eBay/Each and Alibaba/Yahoo's Taobao auction site has grown ever stronger. Taobao has announced free listing for next three years and challenged eBay to match.

That will be proved to be good news for Baidu since Alibaba is also spending heavily on Baidu to attract customers.

With more than 70,000 users signed up Baidu as home page and 100 million queries each day, there are going to be big tolls waiting Baidu to collect.

Booming Economy Bodes Well for Baidu

BEIJING, Oct. 20 (Xinhuanet) -- The Chinese economy grew a robust 9.4 percent in the first nine months, a spokesman for the National Bureau of Statistics announced here Thursday.

Preliminary estimates show that China's gross domestic product (GDP) totaled 10.63 trillion yuan (1.3 trillion US dollars), a year-on-year rise of 9.4 percent, or 0.1 percentage point decline from the growth of a year earlier, said Zheng Jingping, the spokesman.

Of this total, the primary industry registered a value-added of 1.35 trillion yuan (166.5 billion dollars), up 5 percent. The value-added of secondary industry totaled 6.04 trillion yuan (744.8 billion dollars), up 11.1 percent, and that of the tertiary industry rose 8.1 percent to 3.23 trillion yuan (398.3 billion dollars).

The economy showed a steady growth momentum with GDP growth rates standing at 9.4 percent, 9.5 percent and 9.4 percent for the first, second and third quarter, respectively, Zheng said.

Retail sales up 13.0% Jan-Sept.

China's retail sales of consumer goods in the first nine months hit 4,508.1 billion yuan (556.56 billion US dollars), up 13.0 percent year-on-year, or a growth of 12.1 percent in real terms, the National Bureau of Statistics (NBS)said here on Thursday

Figures from the NBS show that in September alone, the figure came to 549.5 billion yuan, up 12.7 percent.

The real growth was 2.4 percentage points higher than that of a year earlier, according to NBS.

The retail sales rose 14.0 percent to 3,030.9 billion yuan in urban areas, and 11.0 percent to 1,477.2 billion yuan in regions at and below county level, reflecting a 13.4 percent and 9.4 percent growth in real terms respectively, or 1.3 and 4.2 percentage points higher than the growth of a year earlier.

Of the sales by wholesale and retail business above designated size, communication equipments rose 20.1 percent, oil and oil products up 38.3 percent and automobiles up 13.1 percent, according to NBS.

Industrial production up 16.3% in first nine months

China's industrial production grewby 16.3 percent in the first nine months this year to 5,045 billion yuan (622.8 billion US dollars), the National Bureau of Statistics (NBS) said on Thursday.

In September alone, China's industrial production came to 627.5billion yuan, up 16.5 percent, said NBS spokesman Zheng Jingping at a press conference.

Of this total, the output rose 11.3 percent in state-owned or state-controlled enterprises, 11.9 percent in collective-owned enterprises, 17.9 percent in shareholding enterprises and 16.2 percent in foreign enterprises and those funded by Hong Kong, Macao and Taiwan, according to NBS figures.

During the nine months, the output in heavy industry and light industry rose 16.9 percent and 14.9 percent respectively. Output of coal, electricity and steel products rose 10.2 percent, 13.4 percent and 25.8 percent year on year.

The output of motor vehicles increased 10.0 percent, of which, that of sedans was up 17.7 percent.

The sales and production were well linked in the first nine months with the sales ratio in enterprises above designated size standing at 97.86 percent, the same level as that of a year earlier.

Fixed assets investment up 26.1% in first three quarters

China's total fixed assets investment was 5,706.1 billion yuan in the first nine months, up 26.1 percent year-on-year, Zheng Jingping, spokesman for the National Bureau of Statistics, said here Thursday.

The growth rate represented a 1.6 percentage points decline compared with the growth of a year earlier, said Zheng at a press conference.

Investment in fixed assets in urban areas was 4,874.1 billion yuan, up 27.7 percent, or 2.2 percentage points drop from a year earlier.

Of the total urban investments, real estate development rose 22.2 percent to 1,037.8 billion yuan. Its growth was 6.1 percentage points lower than that of the previous year.

Investment in coal and oil production and in railway transport maintained rapid growth in the same period, said Zheng.

And very little inflation:

CPI up 2% in first three quarters

China's consumer price index (CPI) rose by 2.0 percent year-on-year in the first three quarters of this year, a decline of 2.1 percentage points compared with a year earlier, the National Bureau of Statistics (NBS) said Thursday.

Prices maintained a moderately upward trend with 1.7 percent rise in cities and 2.5 percent rise in rural areas, said Zheng Jingping, spokesman for the NBS, at a press conference.

In terms of commodity categories, slowed increase in food prices, particularly in grain price was the main reason for the decline in the rise of CPI, said Zheng.

In the period, food prices rose 3.3 percent, or 7.6 percentage points slower than that of a year earlier. Grain prices rose 1.9 percent while that of housing climbed 5.6 percent and prices for recreation, education, culture goods and services rose 2.6 percent.

Retail sales prices rose 0.8 percent year-on-year in the first three quarters, said Zheng.

Producer's prices of manufactured goods increased 5.4 percent and purchasing prices of raw material, fuel and power were up 9.2 percent.

Google can still go(up)

Since Google's IPO a year ago, the stock price has gone up more than 200% at an astonishing price of $285 per share. Later, Baidu also gone public in the US and again had a great show. Although internet has created many great companies in China such as Sina, Sohu, Netease and Shanda who have performed well in stock market, many Chinese who are true believers in brick and mortar businesses traditionally still cannot believe how search engines such as Google and Baidu can move such tidal waves.

Thinking carefully about Chinese's concerns, mostly likely due to lack of understanding how Google can make any money. In fact, I was thinking about the same thing when I noticed something happened to Google in the America.

Recently, many firms sued Google in federal court in the US. They accused Google for having charged too high prices for advertisement on Keywords that is unbearable for businesses. They hope the court can intervene in the situation.

Just heard the news, I am also confused. Why don't they just stop using Google, or they can send their advertise to places with lower prices? However, I finally came to understanding that due to the dramatic change of people's life by the internet, especially in the US. Online consumption is already a huge trend which could replace direct store purchases. Thus, businesses have no other choice but come to buy keywords from search engines like Google. Since the limited number of related keywords, the prices of keywords are just keep going up that forced some firms to get help from the court. The reason that Chinese do not understand that is because interent is still a media tool instead of a consumption tool in China. The trend of purchasing keywords is just getting started in China. Many businesses still do not have such plan yet.

I recently talked to many about the prices of Baidu's keywords. The high end is about 5000 yuan(about $615) per year while the lowest is only around several hundred yuan per year. Evan that, the acceptance from businesses is still very low. While many of Google's highly priced keywords can cost hundreds of thousand dollars each year with some even surpass a million. Now, it's easy for us to understand why Google's stock can go up so quick to so high. In contrast, Baidu's price went up initially and has come down now. The reason is probably because investors first liked the business sector, but realized that Chinese businesses are still not adapted to the online consumptions through the search engines.

Now we take a look at Google's price. Though it has fallen from it's peak and still with many doubters out there, many investors still think the price has not reflected the true value yet. They think that Wallstreet still has not grasped well on Google's business model and it's hidden potential. First they pointed out the rapid growing overseas market. Googe owns even higher market share in search than that of the US. But the advertisement revenue has not matched up with the search services Google provided.

It's not saying that there is no risk for purchasing Google's stock here. Not many people expect Google to triple again in 12 months either. Many investors are taking a longer term view. They expect Google to move up moderately. They have high expectation for Google's US search business and may not have thought well on the competitions from Microsoft and others, and the possible resistance of online advertisements from consumers.

However, Google's many loyal followers still believe that, after falling from the peak of $317.78 per share, Google's price is severely undervalued. Some of these have billions at hand to dispense that could move Google's price up. Closed on Nasdaq at $285.10 has shranked the company's value down to $79.77 billion dollars.

Reema Shah from J.&W.Seligman & Co. in New York thinks Google's reasonable value should be around 320 to 350. They manage $20 billion assets and own 147,000 shares of Google at the end of June.

RobertStraus from IconAdvisersInc.thinks，Google worths about $337. Icon manages $4.5 billion assets and owns 28,200 shares of Google.

Jason Schrotberger from TurnerInvestmentPartnersInc.thinks Google's price is way too low. They manage $16 billion assets and own more than 500,000 shares of Google. Schrotberger thinks Google is more attractive than Yahoo and eBay.

According to ThomsonFinancial, many analysts expect Google's revenue and income to grow 100% over last year. Mnay US companies are moving marketing spending to online keywords links. Almost 99% of Google's revenue are coming from these advertisements. Google announced in April that, to attract some heavy ad spenders, they will provide many new ad choices. According to Majestic Research Corp., Google has increased clickthroughs on related ads from its search engine users. Google credited that on improved relativity of it's search results.

However, Google' core business of search and keywords link in the US may not reach the high expectations of some investors. The company derives 60% of it's revenue from the core business and keeps them all. If the search advertising has to grow form $4 billion to $12 billion this year, either the keywords customers have to pay more on clickthroughs or the search service customers have to click faster, or both.

At the same time, competition may increase the cost of clickthroughs. Microsoft's MSN is testing it's own ads network and hopes to challenge Google. Google's spokesman refused to comment on this report, only said that "we are focusing on our own products and services, not stock prices".

Google provides services in more than one hundred languages. It also claims major usages are from outside the US. According to Nielsen/NetRatings，in May of all the searchs, 73% in Germany, 62% in France, 55% in Britain are using Google. In contrast, only 48% searchs used Goolge in the US in June. Even Google's market shares are higher overseas, 61% of revenue still came from the US in the second quarter. In China, Google has announced that three partners will help Google to sell ads in China.

However, Google can easily make profits on many of it's popular services. Such as news and map services which Google has not attached advertisements yet. Nielsen/NetRatings indicated that，Google maps and Google Earth services has already attracted 13.3 million users. Google can supply ad links to customers of their map services.

Besides that, Google still has room to highlight more of it's ads on its web pages. It usually means increased clickthroughs and increased revenue for the company. Based on that thinking, Google has increased the ads display on some search result page to three links. Previously only two links were displayed.

Reema Shah from Seligman said："They still have room to grow".

What I want to say here, using Google as example, Baidu's upside is still very big.

Oct. 19, 2005 Haifeng Yang from Communication World

Chinese Link

Shanda goes for supergirl?

It is reported that Shanda is in discussion with Supergirl Bronze winner Liangying Zhang. Shanda intended to invite the Supergirl as a representative for one of Shanda' online game.
Right now, the Super girls are super hot in China. They are eclipsing all the movie stars. It is rumored that Liangying may represent the yet to be released but already popular Shanda's next major game "Dragon And the Underground City - Online".
Though only came is as second runner-up, Zhang is very popular for her beauty and lovely smile. Even NBA superstar Yao Ming, who was named the "world's tallest fan of Liangying", grabbed a "rebound" to present her a NBA shirt with his signature.

Since the deal is in final stage of negotiation of details, the signing of Zhang could boost Shanda's game sales in the coming holiday season

Shanda Goes All Out with EZ Station

EZ Station designed for family users by Shanda. It is a new type entertainment terminal based on PC. It is not only a powerful high speed PC, but also an easily operated entertainment center. It equiped with powerful computing power and software required for rich digital entertainment.

EZ Station includes high end processor, large capacity hard disk, DVD drive, and a remote control. As long as a user can handle the simple steps of using a remote control, "easy entertainement, relaxed life, and happy learning" can be achieved through the EZ Center.

It supports all audio and video output.

It suppports DVI, VGA, S0VIDEO, RCA, etc many kinds of output frequencies and the high definition output of S/PDIF optic fibers.

It supports connections of all kinds of digital equipments.

It equiped with 6 USB 2.0 adapter, one 1394 high speed adapter and two-way microphone input.

It supports high definiiton video display with perfect quality.

It has all the powerful PC functions with high speed CPU, powerful 3D graphic display, extra large storage and supports DVD read-write.

It equiped with patented multi-functional remote control and innovative design with simple operations. It also contains timed lock and can be used as a game handle.

The EZ Station has rich content applications:

TV pause and digital recording, interactive video, healthy gaming, Kara OK. . . internal EZ Center software provides overall entertainment applications. (may be limited to certain product types).

Graphs showing outside look of EZ Station

source: Shanda Interactive

Shanda Releases EZ Pod

EZ Pod is Shanda's consumer terminal. It is a PC upgrade includes EZ Center broadband entertainment software package. It can quickly upgrade a personal computer to a "family all-function entertainement center".
EZ Pod may contain following components(depends on accessary types) that increases a user's entertainment experiences:

1. A compatible EZ Center remote control which controls the EZ Center. It can be used as compliment to keyboard and mouse. Some of them may include integrated game handles.

2. A remote IR transmitter which can communicate the remote control with a PC to provide easy management of EZ Center.

3. An EZ Center CD which includes broadband interactive entertainment software and all the necessary components.

4. A booklet of EZ Guide with informaiton of EZ series product and contents. It is a entertainment bible in a broadband family life.

Graphic description of EZ Pod

source: Shanda

Hot Mini, Huge Profit fro Shanda?

The Mini is hot, but can it make money for Shanda?


On October 17, Shanda surprised everyone by releasing the EZMini ahead of releasing the long expected "Shanda box". The first responses from the media and game lovers are :"The Mini is hot!"





In a splashing news conference, Shenda's President Jun Tang (former Microsoft's China general manager) and Mitec's CEO, Intel's vice president and asian genaeral manager jointly released the EZMini product line.


Heralded as a mojor break in a field long dominated by Nintendo and Sony, the EZMini is claimed to be first handheld internet entertainment system in the world.

Shanda' CEO said that the company had this device in mind in the last five years but could not produce it due to the limitation of technologies. Until recently, Shanda hooked up with Mitec through Intel, the EZMini quickly become reality.

Physically, the EZMini has an intel Xscale engine running at 416 Mhz and 64 Mb memory. Externally, it supports SD and MMC.

The EZMini also have the wirless Bluetooth and WLan connections. It also support mini-USB for high speed file transfer.

How can the Mini make money for Shanda?

According to Shanda sources, Shanda will share a profit, though very small with Mitec on hardware sales.

However, what could make the Mini a big money maker are the great functions and contents coming with this Mini and the future Minis with more features of high speed wireless internet functions.

The Mini does not only have the powerful functions of a handheld computer, but also the rich contents of a handheld game machine. It's easy to operate with powerful functions such as music, gaming, movie, as well as electronic books.

EZMini is the first handheld terminal supports online gaming. Many of Shanda's online games can be played on Mini or in the process of porting to Mini.

Without using a PC, EZMini can be used to download music, quickly connect with ease to freely surf the internet through internal WiFi and Bluetooth modules.

EZ mini can also be used for showing video, playing video games, showing pictures, as well as displaying electronic books. It brings users an overall entertainment experiences.

EZ mini supports MP3 and WMA music files, and will supports other compressed music files in the future to make it an open platform.

EZ mini supports higher speed streaming music files with clearer and better sound effects. It also carries a microphone to make Mini shared by small group of friends.

Shanda intends to make profit on the online gaming and music download and other services. With it's open platform, Shanda has signed up more than 70 service providers.

At the press conference, Shanda also indicated that they will soon expand the Mini's market to other parts of Asia and later worldwide.

sources: PCPOP.com

Searching for Baidu Star(2)

October 16, the first "Baidu Star" program design competition finished in Beijing. Tianchen Lu from Tsinghua University won out from the 57 finalists and awarded 10,000 yuan. It is the largest ever competition in program design.
Tsinghua is the top university in China. And the winner, Tianchen Lu is a "genius" freshman who has won gold metal of International Olympic Math a year ago as a high schooler.

A "star" signing his name on the "Star Board"

The race took a month and attracted 4000 students from 310 colleges nationwide. There were also three high schoolers and one foreign student. After two rounds of selections, 57 participants from 13 cities including one high schooler and the foreign student entered the final competition.

Participants visiting Baidu's silver tech office

This is also the largest scale programming competition targeted at college students. Besides the large number of participants, and schools, many participants and those unable to join also had big discussions on it's topics and best designs on the web. Many colleges had heated discussions of "Baidu Star" in their tech forums.

Top ten winners sharing a photo with Baidu's staff members

"The competition was unusually intense", said Baidu's chief architect Liming Zhou. "the finalists represented the highest level of programming design in China's colleges".

Baidu's vice-president in charge of technology, Jianguo Liu told the reporter, "Baidu has been based on technology, and is paying great attention to technology and the discovery and cultivation of technology tallents. We hope to raise more people's great interests in system design and programming achievement through "Baidu Star". We will have similar competition every year in the future and hope to make it a high level competition and communication platform for high level IT tallents. And to fully expand Chinese software tallents' potential and to promote the growth of China's internet industry".

Baidu's vice-president Jianguo Liu gaving a talk to the finalists

At the same time, as the prelude to Baidu's campus recruiting activities, Baidu hopes to discover the best computer tallents through the competition to enrich it's "Baidu tallent pool". General manager of Baidu's HR, Linming Lu said that, selection of tallents through large competition is much simpler than traditional recruiting. Top tallents can come out easier. Through selection, these outstanding tech genius from the colleges will be precious tallents for search engine business. Baidu will continue to follow up on all the finalists.

Baidu's CTO, Shanshan Chui gaving a talk to the participants

Before this competition, Baidu's selection and promotion of tech tallents has been very unconventional. Last October, Baidu held "Apple" award for all Chinese around the world on creative ideas. That race gave every tallent in IT or non-IT fields a chance to provide ideas for better Baidu services. At the same time, it provides job opportunities at Baidu for those who understands search engine well and also with creative ideas.

source: Tencent and Tom.com Tech Reports

Update on Baidu Watch

10/16/05 Baidu is benefiting from the successful launch and return of the second space travel of Chinese astronauts. We have seen a huge surge in Baidu's traffic during last few days that firmly placed Baidu as the fourth busiest website in the world.

10/16/05 A net user did an interesting comparison between Baidu and Google. He searched the hottest word at the moment in China, "astronauts". What he found is that:

The top four results from Baidu are all from today's news and related to the recent space trip.

The number one result from Google was about the astronaut who made the first trip two years ago. The news is in fact two years old.

The second one was introduction to the current two astronauts, one day old.

The third one was about the space food for the current trip, but one year old.

The fourth one was about space training system, one day old.

No items found from Google dated today.

BTW, Yahoo's Yisou resulted first item that was from a report before the first trip and infact more than two years old.

CNNIC's survey has found the number one surfing destination of Chinese net users is NEWS!

Two thumbs up, Baidu!

Q: How dose Baidu make money?
A: "Adwords" and "Adsense". After Baidu started service similar to "Overture" two years ago, Baidu also started a service similar to "Adsense" in August. There are already quite many of those ads are poping up in many Chinese web pages.

Additional Data:
Baidu serves over 100 million search queries every day.
There are over 70,000 Chinese net users are signing up Baidu as home page.

Baidu Breaks Down "Information Cocoon"

Recently, Baidu successfully brought Yunnan Provincial Government's website online with its Wangshitong(WST) series software tools. "China Yunnan" formally started site search, vertical search, indexing as well as automatic classification and content publication.

"China Yunnan"(www.yn.gov.cn) is the electronic governing site of Yunnan Provincial Government. It is also the first phase of the construction of electronic governing business of Yunnan Provincial Government. Currently, "China Yunnan" has gone through formal testing and certification. It has formed a united, complete, and secure electronic governing network.　

Government is the biggest information owner and the biggest IT user in China. Using informaiton technologies more efficiently through an effective, flexible electronic governing business system, can help move governing towards a goal of quicker, simpler, cleaner, and higher efficiency. Electronic governing can help government reach the four goals: united information, business automation, openess in governing, and scientific management. Through one-stop management and service, it will elevate the functions of government, increase efficiency and better serve the people.

Baidu's WST enterprise softwares solves the "information island" syndrome of government. The information isolation is a major problem facing the electronic governing business. Each government department has it's own information system. Besides simple links, they do not share information and data between each other. Baidu's ability of vertical search sovles the problem. Through vertical search, it is easy to find information from lower level departments as well as related website information. For example, when a user search "China Yunnan" website, not only information within the website can be found, but also the information from all the departments as well as the sixteen county governments can be found. (don't know if we can do this in California or other parts of the US?)

The successful implimentation with Yunnan Provincial Government certainly will help the progress of the construction of Yunnan's Governmental web portal. It will make the web portal more authoritative and reliable and be more useful for the people.　

Baidu is world's largest Chinese search provider and expert of Chinese information management. Taking this advantage, Baidu is helping both businesses and governments with it's WST enterprise softwares to realize large scale instant information access and language management. It will help government to efficiently access and use information and fundamentally change the user experiences. It will also increase governing efficiency, move away from the "image engineering" to "efficiency engineering". So far, besides Yunnan, Jilin, Zhejiang, Anhui provinces and Beijing, Tianjin, Hangzhou, and Qingdao city governments with nearly one hundred functional departments have implimented Baidu's WST series.

source: Sina Tech

Shanda to release EZ Station tommorrow

Shanda's plan to release "Shanda Box" by year end has moved way ahead of time. According to Netease's business report, Shanda will release the box tommorrow (Oct. 18 Beijing time) at the International Communication Forum to be held in Beijing.

According to sources from Shanda, Shanda box has formally named "broadband entertainment computer" EZ Station. Decision also made on final description: "Based on Intel architechture, with 3C integration, platform between television and broadband, 'broadband entertainment computer' EZ Station, the widely expected Shanda Box". However, the Shanda source did not reveal the price on the Shanda box. (rumored to be around 3000 yuan or $370 dollars)

Models are showing the Shanda Mini

According to sources, Shanda will also release two other products at the same time: One is the EZPod, which can upgrade a PC into a multi-function platform for interactive entertainment. The second one is EZMini which is a handheld device with multiple functions of entertainment.

The three products are all based on Shanda's common broadband entertainment web service platform, certification, payment, and sales systems. The release of these three product lines is pushing the giant Shanda based on the integration of TV, PC, and wireless platforms up on the center stage.

Jiangbo Yang from Netease Tech Report

Searching for Baidu Star

Baidu fighting for top talents, searching Baidu Star nationwide

The final competition of Baidu Star. The students are concerntrating
on program designs

October 15, the widely watched "Baidu Star Programming Competition" enters it's final race. Fifty-seven programmers selected from 27 top colleges nationwide are gethering in Beijing. They are dashing for the champion of programming design and an automatic berth to a job at Baidu.

At 9 am, the competition has started and will last 3 hours. Formal result will be announced on the 16th.

Wenbin Tang is the only high schooler selected to the final.
One foreign student has also entered the final.

Baidu's general manager of HR, Linming Lu said that, Baidu is using this competition to enrich the "Baidu talent pool". Through the competition, Baidu can get early contacts with the targeted student base. Baidu's staff members has been very patient in answering questions left by the many missed-outs. Baidu will also keep close contact with the top 300 who have entered the online finals. "In the future campus recruiting activities, Baidu will always reach out to them."

Baidu staff share a moment with final participants at Summer Palace in Beijing

Ying Li from Beijing Technology University said after the competition that herself enjoys algorithm and programming very much. It's a lifetime experience to have competed with so many nationwide super tallents in this competition. She said that she is in third year of her graduate study and will face the challenge of selecting a job. Baidu has been very focused on technology development and has been up on the front edge of the internet. It is a very desired place for many of her shoolmates and herself.

Photos from tech.tom.com

Baidu Riding on Shanda Train

Baidu is riding Shanda fast train aiming at virtual money while power players are marking territories

There are signs that Baidu is speeding up the expansion of Baidu Money. According to Baidu's marketing people, Baidu has signed new agreement with Shanda in mid September. Shanda will provide retail service for Baidu Money in it's 180,000 POPs nationwide.

Internet industrial analyst Bofan Wu said that, "The strong push of Baidu Money indicated that Baidu is starting to gradually expand it's paid search categories. At the same time, the virtual money market is seeing another strong competitor."

Playing the cards of virtual money

　 　Currently, the online market has several payment options. The main payment method is "pay on receiving" such as bank or post wiring and virtual card serivices. For online games or online video services, it is not practical to use pay on receiving. The time cost and the tedious paper work are also making it near impossible and reduces it's value of instant availability.

Similar to the development of the currency market of our societies, if it follows the same trail of evolvement, the online market perhaps will have similar stages from gold to dollars to provide customers quick and convenient way to settle for all the goods consumptions and service enjoyment. Under this big enviroment of prospects, the businesses aiming at the virtual money market are having an intense competition comparable to the competition of the real currency market.

Right now, Shanda, The "9", Tencent, as well as portals such as Sina, Sohu, and Netease all have their own online currencies. It has quietly becoming chased targets from online players. The smokes from the battle ground are overshadowing the virtual currency market.

Baidu's general manager of business development, Xuyang Ren explained that, the current virtual currency market is almost like the ancient Chinese money stores.　Money from each store was limited for exchanging through the same store. The one who provides more services would win larger group of users.

For the same reason, all the internet companies are pushing hard on expanding the virtual payment tool. Mr. Xu, who is in the business of selling online gaming equipments, told this reporter that: before there is detailed regulatory policy, many web companies are marking their territories by pushing out variety of virtual currencies. For players of the web world, they are not only accepting but even addicted to these fast and convenient virtual money. There is clear risk though. Even though the online gaming providers are prohibiting of exchanging gaming points with the virtual money or gaming equipments, such deals are rampant privately. The vacuum of policies are causing chaos between the exchange of gaming points and virtual currency. If the companies do not figure out ways of orderly management and strict controls, there will be risk of potential policy regulations.

Order will take over chaos

According to sources, to push for expanding the Baidu Money, Baidu are collaborating with many channel resalers of virtual currencies. From begining, Baidu is taking a strategy of joining hands with the stronger players instead of challenging them. Besides the deal with Shanda's huge distribution channels, Baidu has also established alliances with online bankers such as Industrial and Commercial Bank of China, China Merchant Bank, China Agriculture Bank, and China Construction Bank for e-commerce collaborations. The Chinapay, which supports 20 domestic online banks, is also providing payment service to Baidu money. At the same time, Baidu has also signed agreements with China Telecom, and China Netcom. Besides these, from the third party payment platforms, Baidu has established relationships with Chinese firm Alibaba's Alipay and the popular American Paypal. On the sales front of virtual card and real card, Baidu has strategic partnership with the large card retailers of Cncard and Junnet.

Baidu walks through the "money trail". Through the sales in Shanda channels, they can reach the base of several million users. From this point of view, it's a huge benefit for Baidu as a starter.

However, Shanda won't settle in as a supporting role. It was rumored that in the agreement, Shanda earns the potential "to use Shanda currency Dianbi(or point money) to pay for Baidu's paid services". Besides the agreement with Baidu, it's not new for Shanda to bundle other companies' payment services. The "Yan Huang" and "Jiu Tian Music" services also can be paid with Shanda Dianbi. It's easy to see that, although owns the largest user base of virtual currency, Shanda dose not expect to gain many more users from starter Baidu. What Shanda is looking for is the "universal" exchange of Shanda's Dianbi.

In not so distant future, from video games to downloading of electronic books, from maps and weather services to online purchase of goods, web service provider will provide more and wider online product lines and services. How to break barriers between the online virtual currency issuers, and to provide virtual currency with more services to win larger groups of users will becoming a very big and practical challenge for service providers or even the whole web industry.

One reputed industry analyst pointed out, to solve the problem, it requires coordinated effort of all the participants. It is not exaggerating to say the market is in the "marking territory" stage. If the situation not be changed, to break the barriers among all the providers will be hard. Baidu and Shanda both have their own perposes. However, as leaders of search engine and online gaming respectively, they can provide a model for mutual exchanges between two providers in two different fields on the internet. Only through this kind of collaboration, it will be possible for a common exchange between all the virtual currencies. "The final result will not be a sole winner, but an elimination of all the barriers. That will make virtual currency a fast and convenient tool that fits the web world's life. It will push the competition of virtual currency to the end. The competition for quality of products and services can redominate the landscape again", Xiong Kang, who has many years of experience in web management, told this reporter. "To end the chaos of competition powers in the virtual market, the establishment of a united common currency is inevitable".

Lu Peng from China Business 10-15-05

Baidu's Weather Service

10-12-05: World's largest Chinese search enginge Baidu(ｗｗｗ．ｂａｉｄｕ．ｃｏｍ）Joined with China Central Meteorology Station(China's largest meteorology service) ，formally started to provide weather information services.

Came back from week long National Day holidays, white collar workers started to "Baidu Yixia". When entering "weather in Fuzhou", or "Xiamen weather" to find out "working weather", the search results poped out quickly and clearly such as "Fuzhou, cloudy, high 28C, low 21C, low winds".

According to search experts, weather service is a good strategy for Baidu to bring search into people's daily life. The main goal is to make Baidu a "simple and reliable" living assistant.

Regarding the weather service online, Baidu's chief architect Jun Yu said that, "It is similar to map.Baidu service, we are trying to accommodate our users in everyway. We design our products according to user's language instead of forcing users to learn the boring grammers.

For example, Yu said, our A to B measurement on our map service has won praises. Some critics say it is only a trick to appease users. While I would say, we will find many more "tricks" to please our users. It's also our future since we regard every net user as our god.

Other person from Baidu also revealed that, web search page as the main product of Baidu, will have more and more functions that does not require users to learn and remember similar to the weather queries.

Zi Yang from Southeast Express