Baidu isn't worth the love…
Ever since Google threatened to pull out of the China market back in January, Baidu’s stock price has risen by a lot. As I’m writing this post now, it’s trading over $600 a share. There are even some idiots in the media getting excited over its share price being more than Google’s (and totally forgetting that it’s the market capitalization that determines which is a more valuable company, not the price of a single share).
Give me a break here… When all the fuss over Google’s “exit” from China subsides, Baidu’s share price will go back to normal, too. The current hype over Baidu is non-sense and that really ought to be clear to you.
1. Nothing really changed with Google “leaving.” People can still do their internet search on Google.com. — People in China have been able to access Google.com even after Google officially entered the market and created Google.cn 4 years ago. And even though you still can’t conduct uncensored search (now the GFW is doing the censoring on the Google HK site), it’s not as if Google’s loyal users in China would have to run to Baidu’s site.
The real game changer, of course, is if the Chinese government decided to block access to all of Google’s sites, which it certainly can. If that happens, that’s when Baidu can really grab some of Goog’e's market share in China. But even then Baidu may not have that much to gain…
2. Baidu’s growth potential is fairly limited. — Baidu is already the clear leader in China. No doubt. But it also doesn’t have much of a global business. That means its China business is all it’s got! But outside of China Google is the clear leader (except in certain markets like South Korea, but Baidu would stand no chance in those markets, too). What can Baidu do then? It’s expanded into e-commerce but Taobao is the clear leader in that space. BSP? Sina is the learder. SNS? QQ got that market already. Social games? Again, that’s QQ’s specialty. Yeah… if stock prices are a reflection of people’s expectations on future performance, then people’s expectations on Baidu are definitely misguided by the not-so-real opportunity created by Google’s “exit” from China.
And please, people… Do not see Baidu vs. Google and automatically think China vs. US. Baidu, as you should know, got off the ground in 2000 with American funding. And it is now listed in NASDAQ which means its drawing more capital from non-Chinese investors. So in that regard, Baidu is hardly a Chinese owned company.
Social media is not ready to be a trusted source of news…
I get a lot of information everyday from Twitter and Facebook – stuff people have shared online… For the most part I find that to be very convenient and useful. And while most of the time people share links to blogs or online newspaper articles, sometimes it’s just hearsay. That means I’d need to verify the information I just get before I take it in as facts.
Case in point… there’s a lot of talk about Google’s pending withdrawal from the China market and all kinds of rumors are flying around online. Often people say things without citing their sources. Other times, people say things without making clear if it’s an opinion or a fact. In short, it exposes a problem with reading stuff on social media — it’s not always validated. (Maybe the next question is, do they have to be?)
This is not to say I think everything I see on New York Times or CNN.com is always true and I never question their reporting. But there’s a stronger sense of trust and accountability with established news resources (excluding Chinese media, of course). With them, you know someone can get fired and have their reputation ruined for writing something unsubstantiated and posing it as a fact.
As I’m waiting (as everyone else is) to hear an official statement from Google on its China plans, I’m sitting here and wondering if there is in fact a danger with social media as it is great at spreading information which sometimes can be false and misleading. In the extreme cases, it could indeed lead to less than desirable results, say, social unrest…
Don’t get me wrong. I love the free flow of information. I think it’s vital for a society to have that. But it is also scary how people as a collective can be ignorant in dissecting what they see and read or waste too much of their time and energy on silly things (just look at the online celebrities in China and how disturbing they can be and yet they manage to become wildly popular public figures).
I guess for now it’s a double-edged sword that I’m happy to have. It certainly is something that brings us more good than bad.
Apple vs. Google and my thoughts
There was a very good article in the New York Times about the battle between Apple and Google as the two companies compete in the mobile platform business. It is fierce and it’s said that things are getting personal. Oh, such drama!!!
As everyone knows… Apple is setting industry standards ever since it introduced the iPhone back in 2007. iPhone is enormously popular as people use it to go online and download apps. Before iPhone came into existence, there was not a ecosystem of mobile app developers. Now it’s a big business. Google on the other hand is pushing hard into the market with its Android OS which is licensed to various manufacturing partners, like HTC and Motorola.
Apple’s iPhone (and the upcoming iPad) is all about control! Apple makes the software and hardware and operates iTunes to sell media and apps all by himself. Google on the other hand is all about openness as different companies can take Android and put it on different phones and even tablet computers.
Both companies’ philosophies and strategies go all the way to what they are at the core. Apple is a software company that is quickly moving into the media distribution business. Google is in the advertising business. Apple wants to keep people buying its software and hardware and wants people to consume media through them. Google wants to make sure people continue to use its search engine and a long list of Internet services so it can continue to serve up ads.
Make perfect sense, right?
Except that the two companies wanna achieve their business goals with very very different philosophies on mobile computing. For Apple to succeed, it needs to encourage people to keep downloading songs, videos and apps to their hardware, whether it’s the iPhone, iPad or whatever future products there may be.
Google want to make sure Apple doesn’t further dominate the smartphone business and possibly prevent people from using Google’s services in the cloud.
So there, two very very different visions of the mobile computing future.
I have an iPhone and I love it. Despite its price I think it’s been a good purchase – very much worth the money I paid! But still… if I had to pick side and say which company’s vision I’d agree with more. I’d go with Google’s. As an Internet entrepreneur myself, if I needed to develop a mobile product or service… I’d make a site fitted for a smartphone’s screen and would not wanna bother with making different native apps for different platforms (iPhone OS, Android, Windows Mobile 7 and older, Nokia’s S60 or even Palm’s WebOS).
In fact, someone I know is looking into making a mobile version of his web application. I suggested to him to consider making a mobile site instead of building the apps. He’d only need to do it once and it’d cost a lot less because the site is already there. He’d only need a separate UI for the phones.
Anyway… it’s still early to see what will happen. Apple’s strategies could still evolve if Android eventually eats into its market share. In the meantimes, here are some things to closely monitor:
1, the continuing evolution of the hardware — My main complaint about the mobile web is that the screen is small and inputting data is still not easy enough. But more tablet computers and MIDs are coming out and soon maybe there’s something that could give us a user experience on a mobile device that could rival the one we’re used to on the desktop.
2, the continuing evolution of the Internet browser on these mobile devices — Not only Flash is not supported on neither Android or iPhone OS, when you use your phone to browse the web today, there are still many limitations. These limitations give native apps the advantage as a native app can potentially deliver a better user experience and more functionality. However, if I could run complicated and powerful web apps on my mobile browser, then obviously the need to download native apps is diminished. To this point, you have to wonder if Apple has incentives to continue making the Safari browser better and better.
3, the success of app stores other than iTunes — They are many other mobile app stores out there. It seems everyone runs one these days… Apple, Google, Microsoft, Palm, Samsung, Nokia, etc. etc. Even China Mobile, for crying out load. So far no one can match Apple’s success in selling apps. If other companies can have better success in selling apps, more developers’ resources will be put into making apps. In that sense, it will validate Apple’s vision for a world full of native mobile apps. On the other hand, if no one other than Apple can sell enough apps, then people will have incentives to stand behind Google’s vision. We’ll see…
Soon people will access the web more on their mobile devices. One way or another, this is going to be interesting — expect to see a lot more innovations!
The power for us to connect
I’ve always known that the Internet has the power to bring people together. It’s changed social dynamics and inter-personal communication. Recent events proved that point and more to me once again. It’s a very powerful reminder to live in a very inter-connected world.
Back in December a “friend” on Facebook proposed to me to give his EMBA class a lecture on social media marketing. I actually never met him in real life and couldn’t even remember if I had added him first or he added me. In any case, I accepted the offer and conducted the lecture in Shanghai a week ago. I had spent some time putting together the material and I was pleased with how the lecture went. Afterwards I shared the presentation on SlideShare.net, which if you don’t know is a web service that allows people to share presentation documents online on all kinds of topics.
Then today on my way to a Twitter user meet-up (or a tweet-up) I got an e-mail (on my iPhone) from a professor in the US saying that he saw my presentation online and would like my permission to use it in his class. I quickly wrote back and said yes. Of course I would. I believe in the spirit of sharing, not to mention it’d be for a class. Plus, if anyone really wanted to use the content, it’s not that hard to re-create it from scratch – the original file really isn’t necessary.
First I got the opportunity to give that lecture from an online contact. Then the presentation will be seen by a class all the way across the world in a university in Wisconsin, because the professor saw it online. I find this pretty amazing.
The Internet is quickly changing the world and changing the way we live our lives. I’m really glad to be part of this change!
What the iPad can do…
At last Apple announced its much anticipated tablet computer, the iPad… And let me start this post by saying I think it’s quite a disappointment… It is for the most part a large size iPhone. Nothing revolutionary…
But it is still a nice device at a decent price and it carries the Apple logo. I wouldn’t bet against how well it will sell and lead to more choices of tablet computers in the market.
However, let’s not focus on its limitations. What’s significant about the iPad is that it will be the beginning of a big change in how we consume the various formats of media. (Actually Amazon’s Kindle has already started the process by getting more and more people to read books on an e-reader.) Think about how much space in our homes that we have devoted to shelving and storing books, CD’s, video types or DVD cases right now. That’s about to change. And think about all the tress that can be saved when newspapers and magazines no longer exist.
Even more interesting to me is that I think there will be a convergence of the different media formats. I think what this will do is, instead of saving the print media, actually killing them. I don’t mean the companies that produce printed content today will all die. But rather… it means they will be forced to produce the same content but in a mix of formats and deliver it in a different manner.
Think about it… On the iPad when you read the New York Times via their iPad app, you will read articles (text) but you will also see video content as well. Not to mention all the “social” features that can be built into such an app. Sooner or later, the New York Times won’t be your good ol’ print media company. No one will be.
A device like the iPad allows us to demand media content to be interactive, social and mobile. It will not be like what it used to be!
I’m excited about it. I already read news on the Internet and don’t watch TV much. I think the media industry will continue to be re-shaped by the emergence of new technologies. It means a lot of opportunities will come of this evolution!
We should stop expecting things to be free
The New York Times announced yesterday that it would start a “metered” system that would charge readers of its NYTimes.com website a fee to read articles after a set number of articles have been read. You can read the press release here. Given the state of the newspaper industry and the status of the New York Times being one of the more respected newspapers in the US, this has generated a lot of buzz online. You can read about some of the reader feedback here.
As someone who reads stuff on NYTimes.com everyday for the last 12 years or so, this obviously affects me directly as I would like to continue reading this fine newspaper. My response to their decision to charge for content that is currently free is this:
I will gladly pay for a subscription, provided that 1) it is at a reasonable price and 2) it means less advertising on the site.
I want to emphasize the “gladly” part of my previous statement — yes, I’d gladly pay money to continue reading the Times online. To be perfectly honest, I don’t agree with people who think it needs to remain free. The New York Times is obviously a business and is out to make money. If the advertising revenues can’t support its operation completely, it’s gotta do what it’s gotta do. But why should anyone jump up and down and scream, “No this is evil. It needs to stay free!”
Take something else people often get for free — music. I know when I wanna get a song, I go to Baidu MP3 and find the song online to download for free. Quite frankly, I would be willing to pay for that, too, even though in reality I don’t right now. Here’s the problem… The music industry can’t make enough money from CD sales but that doesn’t mean that music is not something people will pay to enjoy. It simply means the business model should change and they need to provide either different products or a different experience/method for us to consume its products.
When something is reasonably priced and provides you the value you expect it to deliver, people ought to pay. And in fact that’s what we do with most of the things we want or need. Just think of the lunch you had today. You paid, didn’t you?
So why is there a sense of entitlement with this particular case?
I guess for one thing people have been spoiled. In the case of the NYTimes.com, it is free right now so of course some people have a hard time changing their mindset. And it’s not just online news. A lot of content/tools/services we get today online is free. Google certainly doesn’t charge us to search. Heck, Gmail (or Yahoo! Mail or Hotmail, etc etc) is free, too. There is indeed a culture of us enjoying all these great things at no direct cost to us. However, people need to start understanding more the business aspect of the things that we get for free today.
More importantly for the NYTimes.com, though, is that they need to make sure after they start charging, their loyal readers, such as me, feel it’s worthwhile. If they can do that, then it’s only reasonable we accept the costs.
Google vs. China and my thoughts on this matter…
I’m closely following the Google vs. China drama as it’s unfolding in front of our eyes. I’m still trying to digest what all of this will mean to me going forward. Here are a few things I’d like to say about this matter so far:
————————————
People are too quick to judge…
Many factors probably drove Google to make the decision to stop uncensoring their Google.cn website even if it means closing down their Chinese operation. It’s a fair question to ask if Google would as easily make this choice if they were a clear no. 1 in the China market in search. I guess we’ll never know.
And from a business stand point, is this a bad decision to leave a huge market that’s full of opportunities and potential? I’d think so! Even if Google itself called its China revenue “immaterial,” I’d say a lot of companies come to China not for how much it can earn now but for what future growth China can bring. Google executives have no choice to play it down to avoid a huge drop in Google’s share price and to avoid potential shareholder lawsuits. But for sure Google is giving up a lot by leaving.
Anyway, what I know is this… There haven’t been enough facts out in the open. Most of us are on the outside and few people have all the details regarding the hacker attack and what Google has had to deal with in the last 4 years operating in China. That’s why I find it irritating that some people are quick to attack Google’s position that it decided to pull out of China in large part because it didn’t want to censor its search results anymore.
Stop talking like you know what’s going on. You don’t. And let’s wait a little bit before you make up your mind about this one way or another.
Everyone is a loser in this…
Clearly China’s reputation is taking a hit around the world. China’s censorship isn’t new but Google forced the issue into the spotlight. If it can, the Chinese government should hire a large PR firm to generate some good will fast.
And for Google, even with all the people it’s winning over, it is giving up a huge market with huge upside, as I’ve mentioned. It has to be considered a loser, too.
As for Baidu… well, it is probably enjoying the fact that its sales people can start calling Google customers and successfully ask them to switch to Baidu’s ad platform. But overall, a lack of competition is not good for anyone. Baidu may find itself lacking motivation to innovate and actually lose more relevance in the market. After all, this is a company known for its tainted search results.
The biggest losers of all this though are the Chinese Internet users – especially those without the resources or know-how to “climb over” the Great Firewall. They will probably lose not only Google.cn but also Google.com; not to mention all the other Google products and services, like Gmail.
I’m really concerned about the general direction Internet in China is heading…
People have started joking about that Internet in China is fast becoming a national Intranet… It’s becoming harder for people to run Internet-based businesses and the government is placing more limits on what content is allowed. There seems to be all kinds of licenses one would need to get just to get a web site/product/service up online. It’s all very frustrating.
Google said it would have to re-evaluate the feasibility of its China operation. I have to wonder about the same for my own Internet ventures…
————————————
I wonder what will eventually happen. Will either side actually backdown? Will some kind of compromise be reached and both sides can keep face? If not, how fast will Google pull out and how fast will we lose access to all things Google in China?
I guess I will continue to monitor closely.
Hello world!
Hi everyone…
Thanks for stopping by. This is my new blog. I’d like a new place where I can comment on the more serious things in life and keep these entries away from my personal stuff. So here you go, The Hsieh Report. Hope you enjoy my writings.
Cheers,
Allen