Selling in China

Knowledge@Wharton has a special report: “China’s 1.3 billion consumers are at a crossroads. They are embracing new economic ideas and habits, and devouring goods that have long been unavailable, unaffordable or forbidden. At the same time, they are part of a culture and an economic system that remain quite different from those of developed countries. In this special report, experts from Wharton and Boston Consulting Group offer insights on how Chinese consumers are evolving as the market develops; what companies need to know about navigating China’s convoluted sales and distribution systems; and the advantages emerging Chinese companies have over Western competitors, even as these firms face their own difficulties in entering the global marketplace. Also, Deepak Advani, chief marketing officer of Lenovo, and Hal Sirkin, senior vice president of BCG and leader of the firm’s Global Operations Practice, discuss the advantages of tailoring products and messages to local markets in China.”

Online Bartering

The New York Times writes:

Online bartering, an idea with many proponents but few successes, is emerging as an e-commerce model, bolstered by a spate of new Web sites run by veterans of the e-commerce industry. And although these sites wont soon challenge or eBay, they are carving out a significant niche in what could be a highly profitable business.

As promising as these businesses are, they represent no threat to big online companies like Netflix and Amazon, analysts said. The mainstream audience, in my view, is not interested in barter, given how simple renting and purchasing have become, said Safa Rashtchy, an Internet analyst with the investment firm Piper Jaffray. Barter will be a small fraction of e-commerce activity.

Information Factories

Wired has an article by George Gilder on the “petabyte age.”

In the PC era, the winners were companies that dominated the microcosm of the silicon chip. The new age of petacomputing will be ruled by the masters of the remote data center those who optimally manage processing power, electricity, bandwidth, storage, and location. They will leverage the Net to provide not only search, but also the panoply of applications formerly housed on the desktop. For the moment, at least, the dawning era favors scale in hardware rather than software applications, and centralized operations management rather than operating systems at the network’s edge.

This change is as momentous as the industrial-age shift from craft production to mass manufacture, from individual workers in separate shops turning out finished products step by step to massive factories that break up production into thousands of parts and perform them simultaneously. No single computer could update millions of auctions in real time, as eBay does, and no one machine could track thousands of stock portfolios made up of offerings on all the world’s exchanges, as Yahoo does. And those are, at most, terascale tasks. Page and Brin understood that with clever software, scores of thousands of cheap computers working in parallel could perform petascale tasks like searching everything Yahoo, eBay,, and anyone else could shovel onto the Net. Google appears to have attained one of the holy grails of computer science: a scalable massively parallel architecture that can readily accommodate diverse software.

SMS Search

Via Yahoo News:

Google and Yahoo have touted SMS-based searches as an alternative to paid voice-directory services from phone companies.

With SMS-based searches, users send the service a text message with their location and what they’re looking for.

The service then sends back a list of results, often with phone numbers the users can click to call directly.

SMS searches appeal to young cell phone users, says Charles Golvin, an analyst at Forrester Research. Via SMS, Google sends mobile users everything from driving directions to weather forecasts.

In most cases, carriers get a cut, charging a few cents for every SMS sent and received.

Citizen Media

Fast Company writes: “Citizen media is about the aggregating, licensing and management of content created by everyday people for advertisers, marketers and product developers as well as the brokering of citizen media makers for live events. It’s about the shift from a diffuse cacophony of voices to a viable business opportunity. A look around the Internet’s homerooms confirms that citizen media has plunged into adolescence with business plans, VC money, and Hollywood waiting to cash in when they become of earning age. Of course, we’ve seen this pep rally before and know that today’s valedictorian can be tomorrow’s yearbook memory. But before the zits and angst set in, we present how citizen media really is like high school.”

TECH TALK: The Rise of YouTube: Comments (Part 3)

Don Dodge wrote that Google should have tried harder with its own product:

Frankly, I am a little surprised that Google didn’t put the time and effort into making Google Video a winner. Microsoft has come from behind many times and built a winning product starting from nothing.

Remember Netscape, Nintendo, iPod? Netscape invented the browser and dominated the market. Microsoft slowly built Internet Explorer into a leading browser. Nintendo was the leader in game boxes. Microsoft came out with the xBox and sustained losses for several years but ultimately built a very successful business. Microsoft is doing it again with Zune. iPod is the clear leader today, but Zune will change the market.

There are lots of ways to build a successful company. However, there are no guarantees with any approach. Google showed a lot of guts making this deal. Lets wait a year or two before declaring winners and losers.

Russell Shaw speculated on the YouTube-AdSense tie-in:

Ideally, this would work by means of advertisers buying AdSense adverts tied to keywords that could be a YouTube clip’s title, or even the tags within the specific content.

Say I own a travel agency specializing in trips to Italy. So I might be interested in purchasing AdSense ads on a page with Italy-themed title and tags. A page that I show you at the top of this post.

Wouldn’t have to be text-based ads either. Google could actually render the advert as a separate YouTube video-effectively using You Tube’s video play capabilities to monetize itself.

Richard MacManus summarised it thus: YouTube is in many ways the MTV of the current generation. What’s more, it has a user experience better than any other online video site OR tv channel. He quoted a recent analysis from Compete on the YouTube experience: More people visit YouTube, they come back to the site more often, and spend more time on the site each time they visit. That is a certifiable triple whammy and a knockout punch rolled into one.”

Tomi Ahonen presented an interesting angle around YouTube’s user distribution (sourced from Financial Times):

The more fascinating were the two community sites, YouTube and MySpace. MySpace has a bit more users, at about 85 to 75 million judging from the graphs. But Myspace traffic is about 92% from North America, and almost all of the remainder from Europe. YouTube is much more evenly split, with its largets usage from Asia about 38%, then Europe 32%, then North America 28% and the rest of the world splits the rest.

These are early days, obviously with the community sites (social networking sites). But MySpace is clearly an American phenomenon – which helps explain why Facebook, Cyworld, Mixi etc are able to capture local markets. It is perhaps more a culturally “limiting” space, we want people of our own language, who share in our lives and experiences. At more “content” oriented sites – such as YouTube (and perhaps this will hold true of other content in addition to video, such as Flickr for images etc?) – the site can more easily cross borders and attract a global following.

Phil Windley had a different angle:

Only a few of the faculty members [at BYU] questioned about YouTube knew what it was. For them, the phenomenon of user-generated video was something abstract. This highlights a knowledge gap between the twenty-somethings that attend the university and the 30-60 year-olds who teach there.

If community-based sites are the bread and butter of Web 2.0, then it’s mostly the people who grew up with the ‘Net who are participating. Most older folks have their communities and they’re not online. What’s that mean for business models as the ARPA crowd gets steadily bigger with the influx of baby-boomers? Are we going to settle for part of the population, or will someone break the age-barrier with online communities?

Tomorrow: Comments (continued)

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