The many faces of Jack Ma.

Apparently retirement isn’t doing much to keep former Alibaba CEO Jack Ma out of the limelight, or out of the center of controversy. In a recent interview with China Entrepreneur, Ma was asked why banks are afraid of Alibaba, and this is how he responded:

Why are banks afraid? Because we’re doing it right. If [we] weren’t doing it right, what would they have to worry about? If you’re doing things wrong, you can do whatever you want, the bigger the better; either way it’s no threat to me. Am I worried about about what [Jingdong CEO] Liu Qiangdong is doing today? I’ve never even met that guy, he can do whatever he wants for all I care. If the banks start to target you, it’s because you’re doing something right. Ma Yuhua’s thinking on web finance is very true; it’s better to embrace than to resist, because you can’t resist the future. [Resisting e-payment] is like the cart drivers of old Shanghai smashing the taxi cabs when they began to appear. Did that work?

In other words, Ma is saying that Liu Qiangdong’s Jingdong (the artist formerly known as 360Buy) isn’t a threat to Alibaba at all. And while he didn’t put things very nicely, it’s hard to deny that what Jack Ma is saying is true. Alibaba services like Taobao and Tmall dominate the ecommerce market on the web, on mobile, and Jingdong is even further behind many of Alibaba’s other offerings, like payment service Alipay or music service Xiami.

(China Entrepreneur via TechWeb)

Image via Reuters

Like I said last week, it never seems to be good news for Huawei and ZTE, does it? The companies already stand accused in the EU of taking unfair subsidies from the Chinese government, and now the EU has opened second line of investigation in the form of an anti-dumping probe into the two Chinese companies.

Chinese Commerce Minister Gao Hucheng has already responded to the news, giving an interview to state wire service Xinhua in which he says the move would inevitably harm the interests of both sides and making finding a solution more difficult.

Elements on both sides are hoping to deescalate the situation with continued talks, but that looks increasingly unlikely, and the Telegraph quotes EU trade commissioner Karel De Gucht as saying: “We have already had three rounds of negotiations, but without any satisfactory outcome. It is better for the whole world economy to come to an amicable solution, but you need two to tango.”

But if a trade war is on the way, European companies may find they don’t like the way China does the tango. Late last year after ongoing negotiations seemed not to be shifting public opinion, China responded to American concerns about Huawei and ZTE and the potential security risk they pose by blasting American company Cisco in a full-on attack on the company in Chinese state media. It’s the trade equivalent of an eye for an eye: ‘if you smear our companies for security flaws, we’ll smear yours for the same thing.’

So if the EU really does levy trade duties on the Chinese telecoms and launch a full investigation into whether they’re violating anti-dumping regulations, is China likely to respond in kind? Very possibly. Several Chinese commenters on the Xinhua article have already pointed this out. “If you tax others, do you think they’re not also going to tax you in return?” wrote one. “No one takes a beating without trying to hit back,” wrote another. And there are several European telecommunications companies with interests in China that might be vulnerable to new trade duties or whatever other form of retribution China plans to bring to bear. Ericsson, Alcatel, and Siemens all have operations in China that could now be at risk.

The EU seems poised to fire the first shot, but whether or not the battle over Huawei escalates into a trade war will depend on where things go from there. At this point, China’s government is unlikely to ignore attempts to restrict or penalize Huawei and ZTE, but when it responds and comes to the aid of the companies it further reinforces the idea that they have closer ties to the government than they let on in public. Even so, China is unlikely to stop defending its largest and (in the case of Huawei) most internationally successful tech companies. And so, although no one really wants a trade war, one seems to be in the offing.

I wrote about this problem a while ago in the context of Huawei’s troubles with the United States; I think the mutual suspicion and distrust is so deep at this point that conflicts like this one are virtually inevitable. Huawei, ZTE, and China’s government have proved fairly unwilling to accept that other countries do have legitimate reasons to be concerned about some of their practices; at the same time, though, most other countries are so wary of China that any Chinese company looking to move abroad already has a significant competitive disadvantage. As time goes by, both sides seem to be willing only to dig further in, so I expect the high profile disputes like this to continue. That’s bad news for Chinese companies, and bad news for foreign companies wanting to do business in China.

The phone is, once again, rumored to be pretty powerful especially at its paltry $320 price point. In fact, if the leaked benchmarks are to be believed, the phone will once again be one of the most powerful handsets in existence. That probably won’t surprise Xiaomi fans too much, but music fans will be glad to know that the latest round of rumors also suggests a new “Mi Hi-Fi” feature. Exactly what that means or what it will do isn’t clear yet, but it’s meant to cater to music fans so if you listen to a lot of music on your phone it’s likely to be a neat new addition.

If leaked photos (like the one above) are to be believed, the new phone is also a tiny bit bigger and boxier than previous versions. But of course, all of this information should be taken with a sizeable helping of salt until we’ve heard the official word from Xiaomi about the new device.

(iMobile via TechWeb)

But among other things, the company seems to be troubled by the apparent personal problems of its CEO. Sohu head honcho Charles Zhang only this year returned from a yearlong sabbatical taken for personal reasons. In an interview published by Bloomberg last week, Zhang said of the sabbatical:

I missed out on some things, but that’s life. My goals in life have changed, and work is very important now.

But investors could be forgiven for wondering how focused Zhang really is on work when just a couple months ago (well after he returned from his sabbatical) he told an interviewer:

I think there’s something wrong with me. I truly have everything, and yet I am so miserable. Happiness is totally unrelated to how much money you have.

He also spoke about how success had changed him into a perfectionist and maybe even made him a little crazy — he says he thought he could live to age 150. One has to wonder, then, what exactly happened between March, when he gave that interview, and this month when he talked to Bloomberg. Has he really gone from being totally miserable and worried about success to being focused completely on the business and success again? It seems hard to believe, and it also makes you wonder what Zhang will be saying a couple months from now.

You also have to wonder where Sohu and Sogou are going to be in a couple of months, if the latter even still exists. Bloomberg’s report suggests that Sogou is looking for strategic investment to challenge Baidu more strongly in the search and advertising markets, but the Chinese press has been full of rumors that the company is on the verge of being bought out by Baidu or Qihoo (something that no one seems willing to directly deny).

So is Sogou about to use the $500 million it has in cash to take a shot at grabbing a larger slice of the search market, or is it about to get absorbed by competitors? Is Charles Zhang back and ready for action again or is he still fighting whatever personal demons led to his sabbatical and his more recent admission to being “so miserable”? I have no idea.

I do know, however, that it would be foolish to write off the company given that it came up with what’s probably the most unique search product I’ve seen in the past year. Unfortunately, it seems search input hasn’t yet caught on the way I think it could — and perhaps should — but nevertheless it’s a revolutionary idea and a company that can produce this kind of innovation may have a good shot at grabbing a bigger slice of the search engine market over the long run. I’m not sure what the heck is going on behind closed doors at Sohu, but even so, I wouldn’t bet against it.

It’s an issue that seems to pop up for every developing social platform that doesn’t spell things out clearly at first: who owns all the content that’s posted to the platform? That’s a question that Chinese WeChat users — especially users of WeChat Open Platform — have been asking since last week, when Open Platform user Wu Hanqing posted on Sina Weibo about the following clause he’d discovered in WeChat Open Platform’s user agreement (our translation):

The intellectual property rights for the content provided by Tencent on this platform (including but not limited to websites, text, images, audio, video, charts, etc.) belong to Tencent in their entirety, but users of this platform already have an exception to [this] IP law prior to posting their content.

If you didn’t completely follow that, well, neither did anyone else. It sounds a bit like Tencent is saying that it owns all content posted to WeChat Open Platform, but that content creators have an exception that allows them to use the content they create, too. It’s vaguely-worded enough that even in the original Chinese, people have had trouble figuring out what it means. “Does this imply the IP rights of the things I’ve written all ultimately belong to Tencent?” asked Wu. “I naively thought the content I was working so hard to write belonged to me!”

Surprisingly, Tencent doesn’t seem able to offer a clear answer either. An IT Times reporter contacted the company for clarification, and was told (this quote is from the article, not necessarily a direct quote of what the Tencent representative said):

The clause primarily concerns the intellectual property that Tencent provides as [the operator of] the platform. As to users’ legal rights to the intellectual property of their content, Tencent protects its legal rights.

Obviously, this doesn’t really clear up the question of who ultimately owns WeChat content. We’ve contacted Tencent for clarification as well, and will update this story when we hear back, but we also thought it might be prudent to check the terms and conditions for WeChat globally. These may differ from the terms users of the app must agree to in China, but the global terms don’t seem to address the question of who owns the content users create and transmit through WeChat one way or the other. Hmm.

The one thing that is clear is that users overwhelmingly (and unsurprisingly) think they should own the rights to the content they create. In a poll conducted on TechWeb, more than 80 percent of respondents said users should own their own WeChat content, and only 6 percent feel the content should belong to Tencent.

China tech watchers may recall a similar debate about Sina Weibo unfolding after a magazine stole a writer’s weibo posts and republished them without permission. That scuffle went all the way to the courts, but ultimately led to the decision that Weibo posts are the sole property of their creator.

And ultimately, the law may decide who owns WeChat content too, at least in China. Legal experts contacted by the IT Times suggested that under Chinese law, the clause in question might well be considered unreasonable and thus unenforceable, even though users have agreed to those terms. With that said, no one has actually taken this to court yet, so there’s no way to be sure how a judge would rule.

It’s also not clear how international users fit in. Tech in Asia has its own WeChat account; does the content we post there now belong to Tencent? I’m genuinely not sure, but I can tell you for certain that if it does we’re not going to be posting there much longer, and thats why I suspect that whatever Tencent originally intended, it will soon come out and say that all content posted to WeChat by users belongs to the user who posted it. To do anything less would be to sentence its own monetization plans to an early death. After all, who the hell is going to post news or games on the platform if that means sacrificing exclusive IP ownership rights? Absolutely no one.

(IT Times via TechWeb)

We all know why we’re here: to get a taste of the top stories Tech in Asia covered from across the region this week. But before we do that, let’s all take a second to breakdance in celebration of the weekend. Ready? GO! …OK, here’s the news:

Charlie’s pick: Jack Ma’s Last Speech as CEO

Although I’m sure we’ll still see him around, it’s the end of an era at Alibaba with founder Jack Ma stepping out of the CEO’s chair to take a more background role at the company. It’d be hard to understate the effect Ma and his company have had on the development of the Chinese internet over the past decade, so I think his last speech is worth reflecting on.

Steven’s pick: Confirmed: GREE Shuts Down China Branch

GREE’s big international push in the past couple of years hasn’t always gone smoothly. The Japanese social gaming behemoth has badly lost momentum with OpenFeint after acquiring it, and its game development offices haven’t produced a blockbuster in a while. But it was still a surprise when we learnt that GREE Beijing has suddenly shutting down this week.

Youshen’s pick: BBM No Longer Shackled to BlackBerry Platform: Will Indonesians Rejoice?

It seems to me that BlackBerry has adopted a new direction as a software company. With BBM (BlackBerry Messenger)’s availability on other platforms (Android and iOS), BlackBerry looks set to focus on software penetration. I would like to make reference to Volvo’s historical move to make its three-point seat belt design an open ecosystem in the interest of general safety. Could BlackBerry be repeating the same footsteps, but in the interest of BBM’s user community?

Willis’ and Andrew’s pick: SingTel Sets Aside $1.6B For Startup Acquisitions

WIllis: SingTel will be setting aside $1.6 billion for investment over the next three years. If that’s not big news, then I don’t know what is. Project Magellan could be part of the grand plan. But I’m guessing that SingTel has much more stuff under its sleeve.

Andrew: Wow! Singtel setting aside $1.6 billion for future investment. That’s quite a sum of money and we can probably expect them to go onto a shopping spree over the next three years. It’s good news I would say because exits here in Singapore are rare.

Emily’s pick: Alibaba Working on a Set-Top Box to Bring E-Commerce to Your TV?

Although it hasn’t been confirmed yet, the rumour of Alibaba coming up with their own set-top box is still juicy! It’ll definitely be interesting to see if indeed there will be a decision to bring e-commerce onto the television!

For other ways of reading us, perhaps try our tailored RSS feeds, or find us within Flipboard.

This week we saw all kinds of interesting stuff happen in China. A king stepped off his throne, we talked about 1970s pornography, and QQ got a makeover that made everyone sad. So what are the top stories this week? They are these:

1. Jack Ma’s Last Speech as Alibaba CEO

The king of Chinese e-commerce stepped off his throne after one final oration, and while we’ll still see Jack Ma around, I think it’s definitely worth reflecting on. Also worth checking out the first speech from Alibaba’s new CEO.

2. China’s Top Chat-App Gets a WeChat-Like Makeover, But Everyone Hates It

Well, people like chatting with their friends, and people like WeChat, so making QQ Mobile more like WeChat is a great idea, right? What could go wrong?

3. GREE Shuts Down China Branch

In news that could also go in the Japan This Week list if that was something we actually did, GREE’s China office will shut its doors for good next month, bringing GREE’s China dream to an end.

4. Huawei and ZTE Face More EU Scrutiny: What Are They Doing Wrong?

It’s never good news for Huawei and ZTE, is it? Following the latest news that the EU has threatened the companies with trade duties for illegal subsidies from the Chinese government, we take a look at what has gone so wrong with their overseas ambitions.

5. How China’s Top Video Site Battles the Pirates

Chinese video sites used to be known as a haven for piracy, but these days sites like Youku take piracy very seriously. But how do you stop pirates on a site that gets tons of videos uploaded every day?

6. Netease Planning the World’s First Crowd-Designed FPS Game?

It’ll be hard to know for sure until the game comes out, but I think this post didn’t get the attention it deserved. This is really a unique approach to game design from Netease, something I’ve never seen before at any major developer, and it has the potential to pay off big time in the long term.

7. Tencent Posts Rocketing Profits, Sees 195 Million Active Users on WeChat

If Tencent is making boatloads of money for its other business, it means that it has the needed fuel to pump up WeChat, which now has over 195 million monthly active users.

That’s all for this week, folks. For our full spread of China coverage, you can click here or subscribe to our China RSS.

The reason it has taken so long to raise a seed round, according to founder Ken Wong, is that it wasn’t really necessary; the company has been profitable since 2009. But with three big game launches on the horizon, the recent cash influx will be used mostly to increase the level of marketing devoted to the new games.

And of course, the investment is something of a no-brainer on Crystal Horse’s part; the company is already profitable, which makes it the easiest kind of startup to invest in. With this investment, Nexx Studio has become the company’s eight Malaysia-based portfolio startup.

That would certainly seem to be a denial. But interestingly, reporters got a somewhat vaguer text from Sogou CEO Wang Xiaochuan, who told them simply that nothing had yet been finalized. On his microblog account, Wang has denied rumors that he’s slated to join Alibaba. And Sohu CEO Zhang Chaoyang stressed earlier this week that the company has enough cash in the bank that it doesn’t need to put Sogou up for sale.

None of these statements have done much to quash the rumors, however, because it seems no one is willing to come out and directly say: “We’re not selling (or buying) Sogou, period.” Whether or not a deal is ever finalized, the lack of absolute language in all three statements suggests that there is, at the very least, some consideration of an acquisition deal going on behind the scenes. And with Qihoo hoping to pose a more serious threat to Baidu, and Baidu wanting to prevent that, it certainly makes sense that both companies would be looking at Sogou and other minor search players as potential acquisitions to bolster their search offerings.

For now, though, we’ll just have to wait and see. Perhaps someone will outright deny the rumors, or perhaps in a few weeks or months we’ll find out that there was some truth to them when Sogou announces a new investment or merger.

(Tencent Tech via TechWeb)

Beijing may be China’s capital, but as we saw last month, it’s still not winning any races when it comes to internet speed. But the Beijing subsidiary of China Unicom may help to change that today, as it launches a new broadband connection scheme that ups speeds and makes 4 Mbp the slowest connection in the city. Given that Beijing’s average broadband speed right now is 3.5 Mbps, that’s pretty good.

So, if you have a Unicom broadband connection, here’s what’s changing for you, starting today:

• If you had a 512 kbps or 1 Mbps connection, then your connection speed is being raised to 4 Mbps.
• If you had a 2 Mbps connection, your connection speed is being raised to 10 Mbps.
• If you had a 4 or 8 Mbps connection, your speed is being raised to 20 Mbps.
• Fiber-optic customers may be able to get speeds of up to 100 Mbps.

In short, it’s good news all around, with everybody’s internet getting faster while prices stay the same (at least for now).

The move is in part a response to China’s Ministry of Industry and Information Technology’s goal of having 75 percent of Chinese broadband users on 4 Mbps or higher connections this year (up from its 50 percent goal for 2012). Given that seems likely that Unicom may roll out similar plans in other cities across China, so even if you don’t live in Beijing, you can hold out some hope that someday soon, your internet speed will get kicked up a notch too.

(Tencent Tech via Techweb)

The new page asks players “How else can you play an FPS?” and then presents them with a eight this-or-that voting options, each relating to a particular element of gameplay design. The percent of votes each option has accrued is prominently displayed, and while the site doesn’t explicitly say so, it certainly implies that the higher-voted options will be implemented into the game.

If Netease really plans to abide by these votes — we’ve contacted the company for comment — then I believe this will be the world’s first FPS from a major development studio to crowd-source such huge aspects of its game design. It’s a bold move, and one that likely means we won’t be seeing this game anytime soon, as based on these questions it seems like the game must be in a very early phase of development.

So what choices are gamers being given, and what are they choosing so far? The page has only been up for a day, but it appears to have already attracted thousands of votes, resulting in these choices:

Aim-assist vs. pure skill: Here, 83.69 percent of respondents so far have voted for having some degree of aim-assist to make shooting more precise. This shouldn’t come as much of a surprise as many modern shooters including Call of Duty and Battlefield have aim-assist mechanisms so that aiming is not 100 percent manual.

Progressive characters vs. static characters: Here, players are pretty torn, with 45.67 percent voting for progressive characters that can be leveled-up, specialized, and personalized, and 54.32 percent voting for static characters whose only differences are their external appearances (which makes the game fairer in multiplayer matches).

Responsive maps vs. static maps: Players overwhelmingly (89.09 percent) prefer responsive maps that may change over the course of gameplay (for example, a hole gets blown in a wall or a building collapses).

Story-based single player vs. arcade-style single player: When asked whether they preferred a single player mode with characters and a story or an arcade-style single player mode that just focuses on fun carnage, voters so far definitely prefer the game to tell a story (87.71 percent).

Large-scale battles vs. small-scale battles: Do players want Battlefield style engagements, with huge maps, vehicles, and long range engagements, or Call of Duty style smaller maps that are more focused on speed and foot battles? Voters so far prefer the former (82.74 percent).

Varied actions vs. traditional actions: Players have thus far indicated that they’d prefer playable characters to have varied actions (running, crouching, walking, creeping, assassinations, etc.), rather than have a game with fewer actions that’s more focused on pure speed and skill (83.9 percent to 16.09 percent).

Character classes vs. All-around warriors: Voters are split on whether they want different character classes with different skill sets (for example, a medic whose stats are geared towards healing, a heavy whose stats are geared towards causing maximum damage, etc.) or characters who are equally capable of doing anything so long as they have the right equipment, with the former option thus far garnering 46.98 percent of the vote and the latter 53.01 percent of it.

Upgradeable guns vs. standard weapons: Having ‘standard’ guns that can’t be upgraded ensures fairness and emphasizes the differences between each weapon, but so far gamers still prefer weapons that can be modded and upgraded, with 83.73 percent of respondents voting for that option.

As you can see, some of these options certainly indicate that not much work has yet been done on the game beyond the apparent creation of a new game engine (for example, the fact that Netease is asking if gamers prefer a story mode or an arcade mode for single player would seem to indicate developers haven’t really started work on the single player sections of the game yet).

We’re not completely certain that Netease is totally committed to abiding by these votes, and we’re hoping to hear back from the company soon with more details about how the game will be designed. If major design decisions like this really are being crowd-sourced, that would seem to be an industry first, but I wonder whether it will make for a good game. There is always the risk that when you try to please everyone you end up pleasing no one, and the crowd-sourced approach to design could certainly lead to a Frankenstein-style final product with lots of interesting bits but no cohesive whole. Either way, it’s a fascinating idea and we’re going to pry as much detail as we can out of Netease about it, so stay tuned!

Image via Reuters

I’m beginning to think we might as well just consider Huawei and ZTE, given that they seem to pop up together constantly in the news. And, unfortunately for both companies, it’s never something good. When we last checked in with the dynamic duo it was because they were (and still are) under investigation by Indian Intelligence authorities, and now there’s more bad news for the Chinese telecoms in the form of this Reuters report suggesting the European Union may levy trade duties against Huawei and ZTE over what it considers to be illegal subsidies from the Chinese government.

Needless to say, Huawei and ZTE don’t see it that way and deny any wrongdoing. Chinese foreign ministry spokesman Hong Lei told reporters on Wednesday:

We hope the EU can proceed from the standpoint of protecting the stable development of trade relations with China and not make promises to undertake protectionist measures or adopt restrictive measures.

I have a feeling that having an official government spokesperson step in to defend the companies is not going to help dissuade the EU or anyone else that Huawei and ZTE are entirely too closely tied with the Chinese government. And indeed, the EU is apparently as concerned about security as the US and India are:

An internal EU report last year recommended that the 27-member bloc should take action against Chinese telecoms equipment makers as their increasing dominance of mobile networks made them a threat to security as well as to home-grown companies.

The increased scrutiny bodes poorly for both Huawei and ZTE, as both companies do significant business overseas, although ZTE is probably worse off since it is already losing boatloads of money. But the concerns expressed by lawmakers in the US, India, and the E.U. should give the companies pause — if they’ve managed to scare three of the world’s biggest markets on three separate continents, perhaps there really is something wrong with the way they conduct business.

Or perhaps it’s just a PR problem. Certainly neither company could be accused of having mastered international public relations, and the occasional revelations that they’re doing things like working with the Iranian government on “big brother” domestic spy equipment haven’t helped. As I pointed out above, it also isn’t helping when the Chinese government jumps to their defense — all that does is reinforce the perception that it’s a de facto state-run company, even though that’s not the case. Obviously Huawei and ZTE can’t really control what the government says, but if China wants its tech brands to succeed abroad, it might want to consider letting them sink or swim on their own, because the current method clearly isn’t working very well.

(via Reuters)

This rumor comes to us, as many do, from Sina Tech’s “knowledgable” sources, and should be taken with a grain of salt until it has been announced by Alibaba (the company does not comment on rumors). Supposedly, the idea is, among other things, that the box could lead to TV-based e-commerce. But as Xiaomi learned last fall, offering a set-top box requires a government license that can only come through a mandatory partnership with a few state-approved media providers, so if Alibaba is serious about the project it will need to partner up with one of them.

But the bigger hurdle might be Aliyun OS itself, which despite massive investment from Alibaba hasn’t really taken off as the Android competitor the company hoped it could become. At present, it’s not really clear what consumers would get out of Alibaba’s set-top box that they couldn’t get from many of the other available offerings, and I’m skeptical that people really want to do much shopping on their TV sets. But I’ve been known to be wrong, and betting against Alibaba often proves unwise, so who knows. If Ali really is working on a set-top box, it’s definitely something to watch for.

(via Sina Tech)

WeiboSuite should prove an invaluable tool for China researchers and journalists who don’t speak Chinese but still want to keep track of what’s happening on China’s most happening social network. Obviously, with billions of posts, WeiboSuite hasn’t — and cannot — translate every single post into English, but it indexes and auto-translates the 1,000 most recent deleted posts, which makes it valuable for journalists who generally only need to see recent posts anyway. For example, when I searched for “Tibet,” WeiboSuite turned up an interesting post from yesterday alleging that there was a fairly major anti-government protest in Naqu Biru County in Tibet on Sunday.

WeiboSuite also includes an image-to-text translator that should be effective in helping journalists deal with those pesky “long weibo” posts that include long sections of text uploaded as an image to circumvent Weibo’s character limit (not to mention its keyword blocks).

Finally, WeiboSuite also comes with an image splitter. Weibo users often upload multiple photos in one long image, and while that format is convenient for Weibo it’s not great for other platforms. WeiboSuite’s image splitter helpfully breaks those images down into separate image files for each photo without the need for any editing software or tiresome cropping.

In short, WeiboSuite is an awesome tool for journalists or anyone with an interest in following what’s going on on Weibo. My hat is off to the team at Hong Kong University that created these tools; they have really done something quite cool here.

(via SCMP)

Internet cafe or fight club?

Last week, an argument between some patrons at a Chinese internet cafe ended in violence when one man smashed another in the face with an empty beer bottle. The victim was hospitalized; the aggressor arrested. The sum they were arguing over? 1 RMB ($0.15).

The dispute arose when internet cafe cashier Song Na accidentally charged a Mr. Cui’s card with 1 RMB more than he had paid. Since her wages are only 30 RMB per day ($4.76) and her boss deducts any errors from her wages, she sought out Cui in the cafe to ask him to return 1 RMB. Cui was playing games with his friend Jin and Jin’s girlfriend, and he refused to return the money, saying that she hadn’t charged his card with any extra money. An argument started, Song’s husband ran in to defend her, blows were exchanged, and the parties were ultimately pulled apart relatively unscathed. Song and her husband gave up on getting the 1 RMB back, and Cui and his friends left the cafe.

But Cui’s friend Jin apparently couldn’t get over the conflict, and doubled back to the cafe, grabbing an empty beer bottle along the way. He came up behind Song’s husband as he was getting onto his bike, tapped him on the shoulder, and then smashed him in the face with the beer bottle when he turned around.

In the subsequent interrogation with police, Cui and Jin said that the initial dispute arose in part because they were right in the middle of playing a game and Song had asked them to stop, putting them in a bad mood. Jin also said that Song had cursed at his girlfriend, which pissed him off. Cui was released after a 500 RMB ($79) fine, but Jin has been detained by police. Song’s husband, meanwhile, was hospitalized and racked up a significant medical bill.

Internet cafes are a great way for people without the resources to buy their own computers to access the web, but they can also be a breeding ground for violent disputes, including murders, and they’ve also proved a good hunting ground for pedophiles and serial killers. I have argued before that China’s internet cafes are not a good place for children, and violent disputes like last week’s bottle-smashing certainly seem to support that hypothesis.

But I also wonder whether internet cafe owners might be better off investing in some security, or alternatively whether they’re something that Chinese police ought to keep a closer eye on. Granted, disputes like this happen all over the place in a country as large as China, but perhaps because of the dark, smoky atmosphere or the often-tired patrons who’ve been gaming for hours on end, internet cafes seem to be particularly fertile soil for conflict. I continue to believe China would be well-served if the government offered some better-lit, better-policed alternatives to internet cafes.

(via QQ Games)

• AppSocially (Japan) – Make your app’s Viral Loop awesome with an API that lets you track activity and conversion – allowing you to take action using customer data.
• Binpress (Israel) – We increase adoption of open-source in SMBs and Enterprises.
• Credii (India) – We arm businesses with all the intelligence they need to make smart software and service choices.
• Dakwak (Jordan) – Effortless website translation technology.
• GreenGar (Vietnam) – Seamless real-time collaboration on mobile devices. We’re building a platform that enables apps to intuitively connect people together. (We have covered GreenGar a couple times before here on Tech in Asia)
• PopApp (Taiwan) – App to fast sketch app prototypes.
• PriceBaba (India) – PriceBaba is a product (re)search engine that lets you shop in your vicinity. (Frequent readers may recall we had a rundown of PriceBaba here on Tech in Asia back in January)
• School Admissions (India) – Making school admissions and education tension-free. Disrupting the process of choosing the right school for your child and parents.
• Seat 14a (India) – A complete and affordable ensemble for the discerning man every week.
• Tamatem (Jordan) – Tamatem is a mobile gaming development studio and publisher focused on creating culturally relevant games for the huge unaddressed Arabic gaming market.
• Tushky (India) – Self-service online platform to monetize free time by offering interesting activities.
• WHILL (Japan) – Next generation of personal mobility for wheelchair users and the elderly.

Phew, that’s a lot of Asia (and yes, Jordan and Israel are both in Asia). I’m sure after reading through a list like that you’re ready for some relaxation, so check out this somewhat awkward “Thrift Shop” parody video the latest batch of 500 Startups companies has put together (includes some NSFW language):

(via 500 Startups)

We are reviewing our business to optimize our global game development operations through a process of selection and concentration, and this has led us to the difficult decision to close our China office and studio. GREE Beijing has developed several excellent games and the talented people who made up its staff have made a valuable contribution to GREE. We regret that we have had to make this closure and wish all the best to everyone affected.

Japan’s GREE has been a dominant force in mobile games on its home turf, and over the past few years has overseen an aggressive expansion overseas. But late last year the company was forced to lay off employees at its North American office, and now it has apparently shuttered its China branch completely.

We have contacted GREE for comment on this story and will update it if we hear back.

According to an internal announcement at GREE China yesterday (as reported by Sina Tech), the branch will totally cease operations on June 28th, and all of its employees will be laid off. The company has not yet announced a compensation plan for employees, but it should have plenty of time to roll something out over the next month and a half before the shutdown actually takes place.

The reason for GREE China’s demise — and the company’s declining fortunes in general — is generally believed to be its failure to recognize and commit to the global movement towards smartphones quickly enough. 60 percent of GREE’s revenue is still coming from feature phone users, but feature phone users are getting scarcer and the company has not carved out a dominant position as a smartphone gaming platform on either Android or iOS.

Of course, this is not to say the company is about to collapse. GREE is still projecting a net profit of around $300 million this quarter, but then again, if the company’s projections are correct it will be the first time since 2008 that GREE has seen its profits drop. It seems likely that given this shift, the company has decided to concentrate on its strengths on its home turf of Japan and reduce the degree to which it’s extended overseas. That’s probably a smart business move, but it’s a bummer for everyone working in the GREE China office.

Related: GREE’s founding story

(via Sina Tech)

1. League of Legends
2. Sudden Attack
3. FIFA Online 3
4. Aion Online
5. Blade & Soul
6. Starcraft
7. Lineage
8. Warcraft 3
9. Cyphers (Apologies, this one doesn’t have a Wikipedia entry in English)
10. Diablo 3

More interesting than the list itself are the statistics Gametrics tracked on what percent of the internet cafe gaming market these games hold, which show that League of Legends is utterly dominating everything else with a whopping 39.99 percent of the market. By contrast, second-place Sudden Attack has less than 10 percent, and third-place FIFA Online 3 barely has 5 percent.

It’s also worth noting that when comparing this to a similar recent list for China, League of Legends is the only point of overlap. The lesson there: Asian gamers love League of Legends (not that that’s a surprise). It’s also worth pointing out that some pretty old games feature on both China’s and South Korea’s top games lists; clearly Asian gamers are less picky about having the latest graphics and physics than their pixel-peeping counterparts in the West.

(Gametrics via 17173)

Yesterday, Sina Tech sub-site Startup Stories posted an interesting op-ed from T.H. Capital CEO Hou Xiaotian entitled “Why is Sina’s Stock Undervalued on Wall Street?” In it, Hou argues that given that Alibaba valued Sina Weibo at $32.56/share for its big Weibo investment, when you add in the value of Sina’s (NASDAQ:SINA) other services, the company’s stock ought to be up around $73, yet it continues to languish in the $50-$60 range instead.

Of course, some have argued that Alibaba gave Sina a pretty sweet deal in terms of Weibo’s valuation, but Hou asserts that the Alibaba number is actually quite reasonable, and lays out five reasons why this is the case:

1. “Weibo has a monopoly on the market.” Hou says that 85% percent of all time spent microblogging in China is spent on Sina Weibo, and it has more than 500 million registered users. Tencent Weibo has big numbers too, of course, but Hou says that it’s much less actively used.
2. “Weibo is a real-life platform.” Hou argues that beyond real-name registration, users actually build real “micro-lives” on Weibo complete with their own social circles, entertainment, news, and a lot of voluntary sharing about their real lives. It’s almost like an online journal in some ways.
3. “Weibo creates web 2.0 content.” To explain this, Hou compares Weibo search — where users can find the answers to questions (because the hottest posts on any given topic tend to be what most people are looking for) — to traditional search where users find “a pile of indexed links” that can be hard to sort through”. Weibo, Hou argues, produces a ton of content that sorts itself more or less automatically, and it’s always timely and based on what users want.
4. “Weibo is an entrance point for the mobile web.” Hou says Weibo’s daily traffic exceeds 1 billion pageviews per day, and that 75% of it comes via mobile clients.
5. “Weibo is a kind of self-run media.” Hou points out that Weibo has been exceedingly valuable as a way of spreading information and has arguably increased transparency in Chinese society, even if the information it spreads is sometimes of dubious veracity.

I’m not an investor, or an expert in how companies are valued, so I won’t dispute any of Hou’s specific numbers. But I do think that she’s viewing Weibo with a particularly rosy set of glasses — perhaps it’s not a coincidence this article was published on Sina Tech — and there do seem to be some legitimate reasons to think Alibaba’s Weibo valuation was a bit over the top.

To begin with, some of Hou’s numbers are pretty shocking. She doesn’t cite sources for any of them but I’m guessing most of them come from T.H. Capital’s own research, but even so a few jump out as questionable. For instance: Sina Weibo gets more daily traffic and pageviews than Baidu? That would be pretty surprising. And while yes, Weibo does have 500 million registered users, only a small fraction of them are active (a study published in March found that only 200 million or so users had ever posted, and only 30 million users wrote unique posts in a given week).

Hou’s point about Weibo’s search being more valuable than Baidu’s is interesting but, I think, misleading in some ways. Weibo search is extremely effective at helping users find certain kinds of information. If you want the latest trends, to see what people are saying about a particular actress, or to hear the latest about a political scandal, for example, Weibo search is probably better than Baidu. But at the same time, if you’re looking for biographical information about a historical figure, a link to a popular e-commerce site, or information about the lineup of an NBA team (for example), Baidu is going to be far more effective than Sina. At one point in her article, Hou asserts that Sina’s Weibo search should be valued at double what Baidu’s search is worth per capita because it is more effective, but that is only true for a specific sort of search. Personally, I do a fair amount of searching for my job, and while sometimes Weibo search is the right tool, most of the time my search begins and ends with Baidu.

Finally, I think Hou is understating the threat that Weibo faces from WeChat. Granted, WeChat doesn’t offer the quasi-journal-like features Weibo has, but frankly Weibo isn’t that great for journaling either. Both platforms are best at communicating the here and now, what’s happening within your circles of contacts, and while there are significant differences between the services, WeChat’s growth should still be pretty alarming to Sina — even CEO Charles Chao has said WeChat poses a threat — and it’s no surprise it’s also affecting Sina’s stock price. Users, after all, only have so much time in the day, and the more time they spend on WeChat, the less time they’re spending on Weibo.

There are other reasons to be bearish on Sina — Weibo faces regulatory threat constantly, Sina has had a really tough time monetizing it — but generally speaking, I do think Weibo is a very valuable service. Is it as valuable as the $32.56 per share that Aliababa paid for it? Right now, I’d argue it’s definitely not, but then again, Alibaba didn’t invest just to make a quick buck, and over the long term if it can help Sina make Weibo profitable, the service certainly could be worth that, and a great deal more.

(image via Sina Tech)

A new report in the Beijing Times quotes police as saying that in their investigation of Silu HD following its takedown, they found not only 22,296 instances of IP violation, but also that the site was hosting what the article calls “obscene pornographic films.” We’re not sure whether those are any worse than regular pornographic films, but since any kind of porn is illegal in China, the folks behind the site are likely in a lot more trouble for this than the piracy aspect.

Interestingly, it seems the site was mostly hosting quasi-historical-themed pornography from the 1970s, as the two titles mentioned specifically in the article are The Opening of Misty Beethoven (1976) and Caligula (1979). These films and a few others were deemed to be pornographic “after police appraisal,” and we imagine that police are currently combing through the rest of Silu HD’s catalogue in search of other films to, ahem, appraise.

Double-entendres aside, the news that Silu HD was hosting pornography ensures that “China’s first HD video portal” (as the site billed itself) is dead for good. YYeTs may have survived the crackdown, but apparently Silu HD’s apparent affinity for 1970s pornography has ensured the site will definitely not be coming back online.

(Beijing Times via Sina Tech)

AutoNavi is China’s top online mapping company, so the most obvious benefits for Alibaba are mapping-related. If the company is interested in moving into location-based services and commerce — and it obviously is — there’s no better partner in China than Autonavi, as no one has better maps or more location data than the company. And if Alibaba and AutoNavi can integrate their systems effectively, Alibaba will be able to quickly amass a remarkably precise database of things like purchases and consumer behavior based on location.

This data could be used in all kinds of ways. For example, Alibaba could monitor public pollution data and then automatically market air filters and masks to people who are located in the most polluted areas. Its system could analyze trends and notice that people in your neighborhood tend to buy more of one type of product than the general public, and then market that product more heavily to anyone from the neighborhood. It could even analyze AutoNavi’s data to determine which areas lack easy access to which brick-and-mortar businesses and then push those products more heavily online. ‘We see you live six miles from the nearest store that sells maternity clothing; why not buy it online instead?’

But another more easily overlooked aspect of AutoNavi’s appeal may be its userbase. The company has more than 100 million users on its mobile apps alone, and Alibaba certainly recognizes that China’s internet is getting increasingly mobile, so any access the company can get to large groups of mobile users is certainly valuable. And there are certainly ways to integrate location-based marketing like I’ve described above into AutoNavi’s existing apps, should the company choose to do so.

Still, with all these investments it’s starting to feel like Alibaba has some very specific course laid out for itself, the details of which aren’t yet clear to the public. The company has obviously embraced Big Data with both arms (it apparently wants to know what you’re saying, where you’re going, and even what music you’re listening to) but the ultimate endgame remains something of a mystery. Uber-targeted marketing? A groundbreaking new social commerce mobile app? Major changes to its web platforms to make them more social and localized? All of the above? We’ll have to wait and see.

That number comes from a “knowledgable” but anonymous source and, as usual, it should be taken with a grain of salt. But Renren spokespeople did admit to Sina Tech that some personnel adjustment was happening, characterizing it as being part of “an attempt at an internal startup mechanism [within Renren],” whatever that means. They also suggested that some of those laid off might be re-hired internally for work on more promising projects like Nuomi and Renren Games. (On a related note, Renren denied outright reports that there were also layoffs at Nuomi, saying that the team is actually in the process of expanding and that there have been no layoffs there).

We’ve already seen Renren beginning to move away from traditional social networking and toward games and mobile apps, so it shouldn’t be too surprising that a strategic shift of that magnitude would result in a little internal upheaval and personnel turnover. It seems there have been some layoffs, but I don’t think it’s time for Renren fans to panic just yet.

(Sina Tech via TechWeb)

Everybody loves a good mystery. And it seems the folks at Netease have gotten people talking about one with this teaser page for a new first-person shooter. More about the game will be revealed next Tuesday, but there are some very interesting clues on the teaser page (pictured above).

First is the series of “passwords” used to “hack” into the computer. The three passwords that fail initially are CryEngine, Unreal, and Frostbite. As hardcore gamers know, these are the names of three of the biggest and most modern FPS game engines in the world, and have been used for many of recent globally high-profile FPS titles. But the computer on the teaser site rejects those “passwords” and instead chooses Dynamite. Since that’s not the name of an existing game engine, we can only assume that Netease has developed its own engine for use with this upcoming game.

While it could just be marketing hype, it was definitely bold for Netease to put this apparently engine in the same league as CryEngine, Unreal, and Frostbite. If it really is on that level — and that’s a big if — it could signify an attempt by Netease to move beyond China, or at least to license its new engine to the global game developers who are now using CryEngine or the Unreal engine for their games.

We can also make a few guesses about the game itself from the teaser page. Given that the gun and helicopter on the desk appear to be pretty modern, we can assume the game takes place in or around the present day, and that it probably also involves some vehicle combat. The bloody biohazard symbol is interesting, too — could the game’s plot concern chemical warfare of some kind?

There are also a few guesses we can make about the game based on Netease’s past record of game development. While it seems clear this game is a first-person shooter, Netease’s most successful games have been MMORPGs, and it seems likely that this game may include some MMORPG elements, although it’s hard to say exactly what. More interestingly, though, many of Netease’s biggest games include elements of Chinese history and mythology. Will this shooter also include some China-specific elements to make it more appealing to the hometown crowd?

Whatever it turns out to be, the game is facing what is likely to be stiff competition from the impending release of Call of Duty Online, Activision and Tencent’s interpretation of the global smash-hit shooter franchise as a freemium PC game for the Chinese market. The game is coming out soon, and while I’ve argued that hardcore Chinese gamers may be put off by it, it’s still likely to be very popular, and Netease’s game will need to be pretty impressive to turn heads away from the CoD spectacle.

To give you some idea of the speed of these things, K is capable of ten quadrillion computations per second. So the new computer would be capable of performing one quintillion computations per second. If you want to see what that number looks like, it’s this: 1,000,000,000,000,000,000.

It’s not clear yet exactly what the speedy new machine will cost or where it will be built, but developing K cost about $1 billion, and researchers are hoping this new computer will be a bit cheaper.

Supercomputers are sometimes seen as symbols of a global game of one-upsmanship, with countries competing to create the fastest computer and thus prove to the world that they are totally the best at science. But Japan doesn’t plan to use its new supercomputer just to wave in competitors’ faces. The computer will be used to do all kinds of awesome things, such as:

• Develop new medicines and medical formulas
• Run simulations and statistical analyses that predict natural disasters like quakes and tsunamis
• Become self-aware, conquer the world

OK, so I made up that last one, but the computer really is going to be used in disaster prevention and medical research, which is awesome. I’m no computer scientist, but I’m guessing that at one quadrillion calculations per second you can run some pretty goddamn complex simulations, which should be a huge aid in disaster prevention and medical developments.

(via Japan Times)

Image via Reuters

On Monday, the US Department of Defense released a report that once again points the finger at China for hacking and other forms of digital data theft that pose a threat to American public and military interests. And although the report doesn’t mention Chinese telecom companies Huawei and ZTE by name, it apparently spooked Indian intelligence authorities enough that Indian intelligence agencies are now undertaking a thorough investigation of the Chinese companies.

According to the Hindustan Times, Indian intelligence has set up a testing facility in Bangalore and plans to run Huawei and ZTE equipment through the ringer.

This isn’t the first time Huawei and ZTE have found themselves in the sights of Indian authorities. Last year, India considered investigations into the telecoms, and earlier this year both were denied ‘domestic telecom’ status in the country over lingering security concerns.

Concerns about Huawei and ZTE stem from their apparent ties with the Chinese government and military. Huawei, for example, was founded by a former military officer and maintains a Chinese Communist Party office within its corporate headquarters.

(Hindustan Times via Sina Tech)

The move reflects mobile developer Quan Inc’s desire to expand into Southeast Asia. The partnership with AIS may also give Quan an opportunity to develop future apps for SingTel customers, as SingTel is a stakeholder in AIS.

The news is also a reflection of the growing popularity of chat apps like Line, KakaoTalk, and WeChat in Southeast Asia, and the ecosystems that are cropping up around them as they move away from being standalone chat apps and towards being full-fledged platforms.

Disclosure: East Ventures, one of Quan Inc.’s investors, is also an investor of Tech in Asia. Read our ethics page for more information.

The source, who works at an unnamed telecom, says that among other reasons, China Mobile is not currently prepared to launch the network commercially, and is on pace to be ready for launch in October if nothing goes wrong. But the roll-out could come as late as early 2014, depending on how things develop over the summer and into the fall.

And those who’re waiting for FDD-LTE rather than China Mobile’s TD-LTE are likely to be waiting even longer. China’s Ministry of Industry and Information Technology is reportedly unlikely to issue any permits for FDD-LTE networks until months or possibly even a year after China Mobile’s TD-LTE network is launched, as it favors the home-grown TD-LTE technology.

While Southern Metropolis Daily is a pretty reliable paper, this is still just another anonymously-sourced rumor and should be taken with a grain of salt. Rumors about the launch of 4G in China have been flying for more than a year now, and at this point the most prudent response seems to be simply: we’ll believe it when we see it. That said, all signs do seem to point to 4G coming to China at some point before the end of this year if all goes smoothly.

(Southern Metropolis Daily via Sina Tech)

Sina’s report cites a “knowledgable” source in “investment circles” as saying that Sogou is looking for a buyout, and the three aforementioned internet giants have jumped at the chance. According to the source, Qihoo has offered a $140 million deal that includes cash and stock options, Baidu is offering more in cash (he doesn’t cite a specific sum), and Tencent is mostly in the mix because it wants to be sure Sogou doesn’t go to Qihoo.

Furthermore, the report suggests a difference of opinion high in Sogou’s ranks, with CEO Wang Xiaochuan wanting to take the Qihoo 360 deal while board chair Zhang Chaoyang would prefer to sell to Baidu. But as Zhang has reportedly been taking more personal time of late, Wang has been taking the front seat in the proceedings, and Sina’s source says, “it’s a bit more likely that [Qihoo] 360 will win.”

Of course, this is still just a rumor, even if these kinds of rumors do seem to be coming true a bit lately. We’ve contacted Baidu, Qihoo 360, and Tencent for comment, and will update this story if we hear back, but we don’t expect much as most companies have a general policy of not commenting on rumors. All three of them declined to comment for the Sina Tech story (although apparently none of them denied it outright, which is interesting). Sogou CEO Wang Xiaoquan has called the rumor “unreliable” on his Weibo account.

By some counts, Sogou has the third-largest market share in Chinese search, so acquiring it would be a big boost for Qihoo, which has been struggling to close in on Baidu after its initial grab of more than 10% of the market shortly following its launch. But Sogou’s real value may lie in its widely-used Chinese input method software. The company has already begun to integrate search into its input method in a way that I think is potentially very significant. New applications of that concept could be a nice — and very valuable — bonus that comes along with the boost in market share of buying Sogou.

(via Sina Tech, image deleted)

It’s worth noting that compared with Q4 2011, Alibaba also has had the strongest growth both in revenue and profits.

If these numbers are any indication, Alibaba is likely to hold that top spot on the profit charts for some time to come. But of course, all of these companies are making gobs of money, so I don’t imagine any of them are going to be all that upset about who places where on this ladder.

It’s also worth noting that Tencent’s fall in profits could be due to increased investment in WeChat, which is fighting similar apps like Line and KakaoTalk for international users, and which hasn’t been fully monetized yet. Baidu is also moving internationally – we just spotted the company making inroads into Indonesia — and splashed some cash on a big local acquisition, too. And of course, Alibaba is clearly not going to be content to rest on its laurels, as it just invested a boatload in Sina Weibo and rumors are swirling about a number of other acquisitions and a possible IPO on the horizon.

(via Sina Tech)

Translated chart via youxistory.com

The rankings are apparently calculated based on the scores of individual students, and I suspect it’s not an extremely precise system, but even so, it’s interesting that some of China’s most elite academic schools are also the best schools at DOTA. I guess when you work hard, you play hard too! It’s also worth noting that Wuhan has two schools in the top six (though having once visited Wuhan, I can’t say I’m surprised students there prefer to stay indoors playing computer games).

(QQ Games via Youxi Story)

LeTV SuperTVs at the launch event, displaying the screen of a smartphone that is connected to them via wifi.

Chinese video and television company LeTV has been talking about its SuperTV (a smart TV) for quite a while. In fact, you may remember that last fall Kaifu Lee’s Innovation Works invested in the LeTV subsidiary that does its television hardware and software. Yesterday, LeTV CEO Jia Yueting announced the final details about the SuperTV at a press event in Beijing.

The SuperTV comes in two models, a 39 inch model called the S40 that will cost 1999 RMB ($317), and a 60 inch model called the X60 that will cost 6999 RMB ($1,111). The TVs both feature 3D 1080p HD displays, and come installed with a LeTV operating system, app store, and streaming video platform that have all been designed specifically for a big-screen ecosystem. They both support wifi, and have some other cool features like the ability to be controlled via mobile phones. They also apparently feature a front-facing camera with some Kinect-like motion sensing capabilities. The televisions are being manufactured by Foxconn.

Taking a page out of Xiaomi’s book, the televisions will only be available directly through LeTV’s online shop when they go on sale sometime near the end of June. Jia says that even the expensive X60 has twice the features of competing products at only half the price, so the company is clearly expecting the TVs to do well. So, presumably, is Kaifu Lee and the rest of Innovation Works.

As with most products, though, it’s hard to forecast what the future might hold for the SuperTV until its out in the world being used every day by people who don’t work for LeTV. Will the apps fly or fizzle? Will the picture quality and color be as good as competing brands? We’ll have to wait until June to find out.

(via Sina Tech)

Yesterday, in an interview with Sina Tech at GMIC, Kingsoft CEO Fu Sheng made an announcement: soon, the company plans to release a mobile version of its popular “Cheetah” web browser. Although he didn’t reveal a precise release date, Fu told reporters that the browser would be available on both iOS and Android in about a month.

Of course, it’s not a huge surprise that a company operating a PC browser would choose to launch a mobile one, but it’s worth pointing out that Kingsoft faces some strong domestic challengers in this space. In fact, as we saw recently in this list of China’s top 10 smartphone apps, UC Mobile Browser and QQ Mobile Browser are among the ten most installed and most used apps on both iOS and Android.

Numerous other Chinese internet companies also offer mobile browsers but have struggled to match the success of these frontrunners, and Kingsoft has come especially late to the party. Fu says that the mobile browser will work to fully support HTML5, and although he didn’t say as much, perhaps Kingsoft hopes that can be one factor that differentiates the Cheetah mobile browser from some of its competition.

But the challenge of launching a new mobile browser clearly hasn’t affected Fu’s good humor. At GMIC yesterday he reportedly joked with condom brand Durex’s Asia director Aditya Sehgal that what Kingsoft and Durex do is actually similar, as Kingsoft works to “make mobile phones last longer.” In a follow-up weibo post, he cheekily added that the similarities don’t end there: Kingsoft also offers a “pleasurable” user experience and noted that its software prevents you from getting viruses.

(image via this awesome cover of 东方企业家)

First of all, Ma clearly recognizes that some observers have been a little nervous about the e-commerce company’s step in to social media. After all, nobody wants to see Weibo turned into a glorified advertising platform, and Ma knows that. On the topic of how the services will be separated, he said:

If we turned Weibo into an e-commerce platform, we would be condemned by its users and also condemned by history [...] We’re now 18 percent shareholders in Sina Weibo, so if Weibo is doing well that’s good for us. We want Weibo to do well before we discuss what it can give Alibaba. Weibo is Sina’s thing, but if [Sina] needs us to do something, we will support them. That’s the only way this cooperation can continue.

Alibaba didn’t invest in Weibo for no reason. “The investment in Weibo is an important step in Alibaba’s future development,” said Ma. He didn’t name any specific reasons; we can think of a few.

But at the same time, Ma seems to suggest that the investment is also designed to help what he sees as a valuable service that might be in trouble. He says Weibo has increased transparency in Chinese society, and that Alibaba wants to help it be healthier and more successful. It’s no secret that Sina has struggled to monetize Weibo effectively, and although Ma never suggests that Alibaba is the white knight swooping in to rescue a damsel in distress, it sometimes feels a little like that’s what happened.

Everyone — Jack Ma included — agrees that Sina Weibo has really changed China’s society (mostly for the better), and everyone knows it faces a threat in WeChat. Users likely would never have guessed that a partnership with Alibaba might be the thing that really lets Weibo flourish, but that could prove to be the case. In ten years, we may well believe that Jack Ma saved Weibo with the Alibaba investment, allowing the service to continue changing Chinese society.

(via Sina Tech)

Well, the rumors are true. Chinese search company Baidu (NASDAQ:BIDU) announced today that it has acquired PPS.tv’s streaming video service for $370 million. The acquisition bolsters Baidu’s video offerings (it already owns iQiyi) and puts it in a position to challenge market leader Youku-Tudou (NYSE:YOKU) for a bigger share of China’s web video marketplace. By some user counts, this acquisition makes Baidu the proud new owner of China’s biggest video platform. (UPDATE: Unsurprisingly, representatives from Youku-Tudou dispute the claim that Baidu is now China’s largest video platform. Baidu’s official press release states that the acquisition “create[s] China’s largest online video platform” but does not cite specific numbers; however, Tech in Asia believes this claim to be based on data collected by a domestic market research firm.)

PPS.tv will continue to operate as a sub-brand of iQiyi, according to the release, but current iQiyi CEO Gong Yu will also be CEO of the new PPS sub-brand. Current PPS president Xu Weifeng and CEO Zhang Hongyu will remain onboard as co-presidents.

In a TechWeb poll from before the news became official, respondents were split on whether Baidu’s newest acquisition could help it win the video market, but the massive move to mobile is complicating the question further. Chinese net users watch billions of hours of video each month, but increasingly they’re doing it from mobile devices, and on that front Baidu’s iQiyi is already closing in on Youku-Tudou. (iQiyi claims 200 million monthly mobile users to Youku-Tudou’s 150 million daily users).

Even so, Youku-Tudou president Dele Liu says he welcomes the competition. Responding to rumors of the merger two weeks ago, Liu told reporters:

After the success and synergy created by the Youku-Tudou merger, increasing consolidation was inevitable throughout the video industry. We are happy to see this purchase go forward; we expect this acquisition will further rationalize the industry and help reduce piracy in the sector.

Nevertheless, the news poses serious questions for Youku-Tudou, and puts Baidu in a better position than ever to challenge for dominance of the streaming video market, especially on mobile devices.

UPDATE: Updated 11:38 to add “monthly” and “daily” to better clarify the Youku and iQiyi mobile numbers.

China’s Top 10 iOS Apps

1. QQ
2. WeChat
3. Sina Weibo
4. Taobao
5. UC Mobile Browser
6. Alipay
7. QQ Spaces
8. QQ Mobile Browser
9. QQ Mobile Music
10. Kingsoft Battery Doctor

China’s Top 10 Android Apps

1. QQ
2. UC Mobile Browser
3. WeChat
4. 360 Mobile Guardian
5. Sina Weibo
6. Taobao
7. Alipay
8. QQ Mobile Browser
9. 360 Mobile Helper
10. QQ Spaces

The biggest difference between the two lists is the rather conspicuous absence of Qihoo products from the iOS list. In fact, Qihoo has four products on the Android top 20 list, but not a single Qihoo product made the top 40 on iResearch’s iOS list. Apple has a history of not being particularly fond of Qihoo’s apps, and it banned them from its App Store back in early 2012. That time, they were quickly reinstated, but they were banned again in late January of this year and are apparently under special investigation and still haven’t been re-approved months later.

It’s also worth pointing out that not a single foreign-developed app is featured on either list.

Of course, a more interesting way to measure app popularity is to monitor apps’ time usage; luckily, iResearch has a list for that too (combining both Android and iOS):

Looking at all these lists, if you had to pick a winner the pretty obvious one is Tencent, given that its products (QQ IM, QQ Browser, WeChat, etc) hold the top spot — and a bunch of other spots to boot — on every list. But since most of the apps listed offer free services, we might well call Alibaba another winner, given that its Taobao and Alipay apps exist almost exclusively to help users spend money and yet still made the top ten.

(All data via iResearch)

Late last week, Qihoo 360 CEO Zhou Hongyi spoke to the press about a number of things. Among them was his ultimate aspirations for the company in the long term:

[Qihoo] 360′s free security software has already become the biggest in China, and made-in-China products are sold in every corner of the world. China’s unique free web security business model must also go out into the world [...] Just like made-in-China, we must go out and promote China’s uniquely-innovated free antivirus business model to the world, and make [Qihoo 360] the biggest web security company in the world.

It’s a lofty goal, but is it an attainable one? That depends in part on the proposed timeline, but anytime in the near future I think Qihoo is going to face huge obstacles in any attempt to expand beyond China and perhaps the overseas Chinese diaspora. Among them:

Consumer perceptions: Qihoo doesn’t have the best reputation even within China, and many Chinese technology companies have found expanding beyond China’s borders to be incredibly difficult because of the general distrust many people have (whether that’s fair or not) towards Chinese software. Companies like Huawei and ZTE have been learning this the hard way over the past few years, and Qihoo’s product is, if anything, more likely to cause even more consternation given that security software tends to have access to large swaths of the user’s computer and communicates frequently with the company’s servers.

Whether or not Qihoo is actually using this access to do anything malicious will not matter. If there are any doubts, most people simply aren’t going to install the software. And with Chinese companies, there are always doubts. Perhaps in the long run, that could change. But I don’t see it likely to change much in the immediate future, and if the frequent stories about hacking and spyware coming from China in the Western press are any indication, it could get even worse.

Entrenched competition: Like most of China’s first-generation internet startups, Qihoo has grown and developed in parallel with China’s internet industry. But to become the biggest web security company in the world, it would have to enter — and ultimately dominate — fully developed industries with deeply entrenched competition. There are already plenty of free security suites out there, and Qihoo would face tough battles in many markets to even gain a foothold, let alone become the dominant player.

And in fact, Qihoo even lags behind its biggest domestic competitor in this regard. Baidu launched a free PC security suite aimed at Southeast Asia (starting with Thailand) earlier this year. While Qihoo has been focused on trying to take some of Baidu’s search market share in China, Baidu has been quietly laying the groundwork to beat Qihoo at its own game overseas. There are huge potential markets that are still developing in Southeast Asia where Qihoo might gain itself a foothold from which it could more easily target other international markets. But as far as I’m aware, it has thus far focused completely on China. And while it dominates the security market there, its competitors are becoming more and more entrenched overseas.

PR and legal problems: Qihoo CEO Zhong Hongyi is, to put it mildly, an opinionated guy. Working for him is apparently a nightmare. In the press, he’s been more than willing to take on competitors and stoke “wars” like the famous ‘3Q War‘. I feel quite certain that Qihoo would argue that and its other battles are its competitors’ fault, but China’s courts seem to disagree. Qihoo has lost two separate court cases in the past couple weeks. Now imagine a Qihoo that’s fighting in these “wars” on five different continents, and constantly engaged in dozens of legal battles in various court systems around the world. It would be a nightmare.

Moreover, Zhou’s blustery style of PR isn’t likely to win the company many supporters overseas. Last week Zhou spoke about Steve Jobs as a role model, but Jobs was the exception, not the rule, and even Jobs tended to keep his famously sharp tongue out of the public eye as much as possible. Zhou’s personal vendettas, sharp rhetoric, and microblog battles are going to turn people off in international markets where consumers are not used to seeing CEOs slinging mud in public so frequently.

And, without getting too personal, in my own experience Qihoo handles people questioning it less well than any company in China I have ever dealt with. But the sort of scrutiny an occasional Tech in Asia article puts on the company is nothing compared to the suspicion, doubt, and speculation that will be targeted at it from all corners of the globe if it attempts to expand internationally. Recently, the company has apparently hired a PR firm that has been helping arrange interviews in the Western press, but from what I’ve seen of how Qihoo’s executives respond to criticism, even a skilled PR firm isn’t going to be capable of holding them back (or undoing the damage) when the company is facing Huawei-like levels of scrutiny internationally.

Zhou talks about overseas expansion and domination in the context of it being his dream, a driving force that keeps him and the team motivated to push the company forward. In that sense, it’s certainly quite valuable, but I think this is the sort of dream that’s destined to stay in Zhou’s head, at least for the foreseeable future.

(Incidentally, Zhou also talked a bit last week about the things he doesn’t plan to do, which include e-commerce and mobile phones, although Qihoo does plan to keep making mobiles with hardware partners. Previously, Zhou has also promised Qihoo won’t get into instant messaging.)

The funding situation has also gotten much better for Chinese startups, though it’s still no cakewalk. From 2010 to 2011, for example, the number of startups in Zhongguancun grew by 17 percent, but the scope of total angel funding went up 248 percent, meaning there is a lot more angel money flowing into the startup scene than there used to be. In fact, the report suggests that since the dot-com boom, the general pattern has shifted from startups chasing investors to investors chasing startups. “In the past, there wasn’t enough capital; now the problem is that there aren’t enough great startups [for all the capital available],” a representative of the Zhongguancun regulatory commission told the Beijing Daily.

But interestingly, the report also indicates an ideological shift of sorts, asserting that around 60 percent of today’s founders are chasing self-realization rather than investment capital. That’s not to say that Chinese founders are turning away money, of course, but when asked why they’re pursuing a startup instead of working their way up through a regular career, apparently more founders talked about realizing their own dreams and creating something that reflects themselves than talked about wanting to be rich.

And, in news that shouldn’t come as any surprise, Zhongguancun’s tech entrepreneurs are also remarkably youthful, with 47 percent of founders under the age of 34.

(Beijing Daily via TechWeb, image via China Daily)

Of course, handling a billion RMB in transactions doesn’t mean the company sees nearly that much in profits or even revenue. But it does indicate that as the daily deals market continues to consolidate, Meituan is gaining ground rather than losing it. That’s important, given that founder Wang Xing has set his sights on breaking the hundred billion mark in yearly transactions by the year 2015.

(via Sina Tech)

Specifically, a source told the paper that Li was taken from his home by police on the evening of April 27. While it’s not known what Li is being questioned about, it’s likely related to the apparent corruption case police have been pursuing since former China Mobile chairman Zhang Chunjiang was indicted back in 2010.

While Li has served as Guangzhou Mobile’s CEO since 2009, it is also possible that he’s being investigated for wrongdoing that predates his appointment to that position (he was the company’s marketing director from 2003 to 2009).

Of course no charges have been made public yet, and while China Business News is generally a reliable publication, one should always take anonymously-sourced stories with a few grains of salt. If China Mobile executives are guilty of corruption, it will be announced officially sooner or later. But the news of such high-profile detentions certainly doesn’t help the company, and I suspectit’s making other China Mobile executives who might have skeletons in their closets very nervous.

(China Business News via Sina Tech)

Building an app is more than just giving it a pretty face. Of course, your user interface has to be clean and clear and easy to use. But most apps also have a substantial backend that, while users will never see it, has to be done right to assure that the app runs properly, its services are scalable, its APIs are working properly, its servers are up, etc. Appacitive is an India-based startup that looks to simplify backend development and management for app developers by putting it into Appacitive’s cloud so that developers can focus on the front-end work.

The company’s feature-set is pretty impressive; even offering a visual-design tool that literally lets you “draw” your back-end architecture. It works on all the big mobile platforms and also with HTML5 and includes built-in API connections to Facebook and Twitter as well as tons of other features like geolocation, push notifications to your users, and even a testing sandbox. I’m not an app dev, and some of what the company offers is a little bit technical for me, but even I can see that it’s a platform with pretty robust offerings.

“The general mantra is: you focus on your app and let us worry about everything else,” says Appacitive co-founder Neil Unadkat. And while there are a few other back-end solutions out there for app devs, there may not be any quite as slick and pretty. That’s part of Appacitive’s goal, Undakat says; “What we have done is gone about solving the [backend] problem, while keeping a great user experience in mind. That’s been our driving force.”

The startup hasn’t been around long — it was founded in September 2012 — and it’s run by a tiny team of only eight people, but the service has gained some impressive traction in a short period of time. Since launching in private beta in December 2012, Appacitive has attracted more than 500 users in various stages of development. Of course, apps take time to develop, but Undakat says, “We are expecting a few apps [on the Appacitive platform] out there in the app store in the next couple of months.”

The best news for other startups is that Appacitive works on a tiered payment model, with apps that get 1 million or fewer API calls per month being totally free. And the official site also says that Appacitive offers special pricing for startups, negotiated on a case-by-case basis, so even bootstrapping startups expecting tons of API calls should get in touch and see what they can work out.

As for what’s next, Undakat says the company plans to branch out:

Plans are to integrate and partner with third party services, so that we can provide everything that is necessary for a dev to build their app, in once place. We are in talks with a few established companies.

The company is also looking at offering pre-packaged backend solutions, so that a dev can say (for example), “I want a game backend,” get a pre-created and fully functional backend immediately, and then tweak it as they see fit.

Appacitive has also been in contact with investors, and I suspect they’ll hear from quite a few more before the year is out. Right now, the company is run out of a two-bedroom apartment in Pune, India, but something tells me the company is destined to outgrow that space sooner rather than later.

It’s worth pointing out that for some reason TechWeb didn’t offer a straight-up “no” option, but even so, it seems pretty clear readers are split on this. Frankly, I agree with them — it’s very hard to say. On the one hand, Youku-Tudou has been holding the number one spot for a while and even with PPS’s market share in hand, Baidu’s services wouldn’t surpass it. On the other hand, though, Baidu has a lot more money, and a much more diverse platform it can use to integrate video in a number of ways that might tempt viewers away from Youku-Tudou, assuming that it can match that site for quality of content.

This is one where I think we’re all just going to have to wait and see.

(via TechWeb)

The move is the latest in a competitive battle between China’s major telecom companies to offer the lowest international roaming rates, and it has been excellent for consumers. For example, China Telecom calls from the US, South Korea, Singapore, or Taiwan to mainland Chinese numbers now cost just 0.99 RMB/minute ($0.15/minute). Of course, that’s still quite a bit more expensive than domestic calling rates, it is quite a bit cheaper than most international competitors. A similar international roaming call made with America’s Verizon Wireless, for example, costs $1.99/minute. In other words, China Telecom is more than ten times cheaper.

And the battle may not yet be over. China Mobile dropped its international roaming rates in February in a move to gain a competitive advantage, and Telecom’s latest price drop could trigger a response from either it or China Unicom. Here’s hoping it does; this kind of price war may be hell for the telecoms but it’s awesome for consumers!

(Beijing News via Sina Tech)

Basically, Hashiji is a curated directory of products (mostly clothing) that are actually sold on other e-commerce platforms like Taobao. But in addition to the curation aspect, it offers users a much more pleasant shopping experience. No advertisements are shoved in your face, the site is attractive, quick, and intuitive, and it makes good use of comments to give you feedback about a product you might be interested in. When you mouse over a new product, for example, a comment snippet will slide gracefully up from the bottom, quickly giving you an idea of what people are saying about the product in question (pictured below).

On the bottom bar of the site, the founders have written a brief explanation of why they created Hashiji in 2012:

We wanted to make a simple thing, that allowed you to see the item and the comments clearly before you make a purchase, and then if you like it you can go buy it [on another site].

That’s a pretty good summary of what the site offers, and it does it very well. Perhaps the next time I’m looking for something on Taobao, I’ll start with Hashiji. Sure, I’m going to end up on Taobao one way or another eventually. But Hashiji looks, and frankly feels, better. That may be a simple thing, but it’s enough to make you wonder why Taobao and other e-commerce platforms don’t look and feel this nice.

Tuesday marked the beginning of the blockbuster Call of Duty franchise’s first real entry into China: Call of Duty Online. Western publisher Activision has paired with China’s Tencent to launch the game in China, and while not everything is online yet — microtransactions aren’t yet available and it’s called “closed beta” for a reason — we should soon begin to see how China’s gaming marketplace will react to the game.

On the one hand, there’s every reason to expect success. Call of Duty is a popular franchise everywhere — China is not an exception — and having an official version and official (hopefully lag-free) servers on the mainland should help to increase the franchise’s popularity.

Even so, though, I have to wonder if the game is offering enough. While it’s being billed as “a totally new game” on the official site, there isn’t much to it that’s new at all. For example, the “new maps” in the latest alpha build of the game are almost all from previously-released Call of Duty games, including a couple from the original Modern Warfare game that is now more than half a decade old.

And while previous Call of Duty games were never marketed to Chinese players, many Chinese gamers have played them. Indeed, Call of Duty titles are among the most widely pirated in China (if street-side pirated game salesmen are any indication). For many Chinese gamers, these “new maps” are six years old because they played the original Modern Warfare at the same time everyone else did. So what’s new and exciting about Call of Duty Online for them? As far as I can tell: nothing, except for the fact that they now have the opportunity to pay for things in the game. Oh joy.

To be clear, I still expect Call of Duty Online to do well, if for no other reason than that the promise of being able to play lag-free games on Tencent’s servers is going to entice a lot of FPS gamers into trying the game out (again). But I suspect a subset of Chinese gamers will still be a bit miffed about having what is very clearly old content repackaged and shoved in their faces while Activision and Tencent shout about how it’s “all new.” Chinese FPS fans have played Call of Duty games and they are not idiots; the game may be fun but there isn’t much about it that’s actually new.

With that said, we’re still planning to take the new game for a spin and kick the tires a bit once it comes out of closed beta. It will be interesting to see just how deeply Tencent and Activision have embedded microtransactions into this game, and whether they ultimately enhance it or cripple it. My hopes are for the former, but neither Activision nor Tencent have a great record when it comes that sort of thing, so we’ll have to wait and see. In the meantime, though, don’t believe the hype about Call of Duty Online being “all new.” It’s not.

At present, the ads don’t seem to be very targeted. For example, the ads pictured above, on my own personal weibo feed, were exclusively for women’s clothing items (which, as a man, I don’t have much use for). So it certainly seems as though, at least for the moment, Alibaba probably hasn’t started thoroughly mining Weibo’s mountain of data yet. But we’re confident that it will, and Weibo users should get ready to start seeing more carefully targeted ads as time goes by.

In the meantime, it will be interesting to see if these new ad placements have any effect on Taobao’s sales numbers.

Now that we know it finally has happened, the next immediate question is why. It’s not hard to figure out why Sina went for this deal; the company has been having trouble monetizing Weibo and having an extra $586 million in the bank certainly (to put it lightly) helps. But what’s Alibaba up to here?

As my colleague Steven pointed out in his article yesterday, it’s clear that Alibaba has been interested in becoming more social for some time, as evidenced in (for example) its apparent investment in chat app Momo and its acquisition of music service Xiami. OK, so Alibaba invested in Weibo because it wants to get more social. Why?

Getting Customers Where They Spend The Most Time

The most obvious answer is that that’s where all the customers are. Weibo has over 300 million registered users, and while only around 50 million of them are daily active users, my guess is that Alibaba is less concerned with how many users there are — everyone in China who’s on the internet already knows about Taobao anyway — and more about how users are spending their time, and how much time is being spent on Weibo.

Alibaba’s e-commerce sites, after all, aren’t really fun places to “hang out.” But people hang out on Weibo all the time. It seems likely Alibaba is looking not so much to increase its userbase as it is to increase the amount of time users spend with products from Alibaba platforms in front of their faces. After all, many people go on Taobao only when they need something, but 50 million people go on Weibo every day to discuss the news, follow their friends, etc. Putting products there should help give Alibaba better access to the impulse buy than it currently has, simply because people do not generally load an Alibaba site unless they’re already planning to buy something. Alibaba, I suspect, is hoping that Weibo will help it snag users who had no plans to buy anything but fell in love with a product they ran across while browsing Weibo (or chatting or listening to music on the other platforms the company has invested in thus far).

And of course, it has already been demonstrated that people will buy things from Weibo. The Xiaomi Weibo sale, with over a million phones sold via Weibo in just five minutes, must have impressed on Alibaba’s leadership that Weibo users will fork over their cash via that platform when given a product they’re actually interested in. And if there’s one thing Alibaba has a lot of, it’s products.

Access to a Goldmine of Data

Of course, the other side of the coin is that Weibo’s massive databases can also probably provide Alibaba with tons of useful information about consumer behaviors, desires, and trends that it can use to optimize marketing and maximize sales. We know the folks at Alibaba like data, and Weibo has literally billions of public posts that can serve as useful data points on everything from sentiments about a particular brand or product to general insight into the thoughts and desires of particular demographics. And with full integration into Weibo, Alibaba platforms’ marketing could be tweaked to respond automatically and in real time to new trends as they emerged.

Think, for example, about Beijing’s “Airpocalypse” earlier this year. Now imagine that for Beijing-based users, next to every Weibo post about the pollution there’s an ad for an air filter or a mask on Taobao. That, I think, is why Alibaba is so interested in Weibo that it is willing to pay what many analysts feel is a pretty generous sum for an 18 percent stake.

Of course, there could be more to it than that. Or I could be missing the forest for the trees. We’re hoping to head more from Alibaba about its specific strategy here soon, but in the meantime, what do you think about Alibaba’s investment in Weibo?

On Sunday, Ren addressed both of these rumors directly in an email sent to internal team members but subsequently published by the Chinese tech press. In it, he firmly denies the rumors of an IPO, writing that in the next five to ten years, Huawei has no plans for an IPO or for any kind of merger, segmentation, or acquisition that would get the company into capital markets. “The rumors that [Huawei] will IPO have no basis,” wrote Ren in his letter.

He was, if anything, even more blunt in his rebuttal of claims that he planned to appoint a member of his family as his successor. After laying out a number of qualities he feels his successor must have such as vision, character, and a number of business-specific abilities, he wrote:

None of my family members possess these qualities; therefore, they will never be included in the sequence of successors [for Huawei].

Harsh words if you’re a member of Ren’s family, but it’s good to see that he’s willing to address both of these rumors clearly and directly and deny them both in very clear terms. I can’t believe I’m about to write this about Huawei, but other Chinese tech companies would do well to learn from Ren’s example when it comes to squashing rumors.

(via Sina Tech)

This week we saw lots of interesting reports, and more than a few interesting rumors to boot. But everyone has their favorites, so rather than delaying you further with some tired introduction, let’s just jump right into it. Here we go!

Charlie’s pick: Report: Baidu Acquires Social Video Rival PPS For Up to $400 Million

The rumors were flying this week about Baidu’s acquisition of PPS, and while it’s not yet officially confirmed, the move makes a lot of sense. If it is true, it could really shake up the video marketplace in China, and help Baidu pose a bigger threat to Youku-Tudou.

Steven’s pick: Qihoo Loses Tencent Lawsuit (Again), Must Pay Fine and Show Frontpage Apology (Again)

Chinese web company Qihoo was back in court this week, doing what it does best in this situation: losing. Twice in one week.

Willis’ pick: Japan’s GungHo Hits $10 Billion Market Cap

Puzzle and Dragons (almost) single-handedly turned Japan’s GungHo into a $10 billion company, surpassing DeNA and GREE along the way. It’s shockingly great but also worrying. The ride of a game company is roller coaster-like and GungHo is apparently enjoying its peak period. But it will experience a downfall as soon as gamers are bored of Puzzle and Dragons and the hype dries up.

Minghao’s pick: Agate Studio Enters Feature Phone Gaming Battle in Indonesia With New Social Platform

Besides e-commerce store Multiply closing down, I think this is another news worth noting. Chat apps and e-commerce sites are competing intensely in this market, another battle is looming ahead; the feature phone gaming platform battle. Kotagames is the earliest entrant, with FunSpot coming in this month, and now, one of Indonesia’s biggest game studios Agate Studio is joining the fight.

Emily’s and Enricko’s pick: An E-Commerce Giant in Indonesia Bites the Dust. What Happened to Multiply?

Emily: I suppose that this is going to impact adversely those who have stuck with Multiply throughout its evolution. Late in December 2012, it announced a total transformation to a 100 percent e-commerce site – and just less than three months later, it decided to just cease operations. This is a good investigation of why that happened.

Enricko: This is a shocker. Just two months ago everything looked rosy for Multiply. The site was ranked 47th in Indonesia and 17th in the Philippines, and the company was looking forward to its rebranding effort. A lot of people grew up with Multiply, from the social network days up until the end. Quite a few of them showed their support on the company’s Indonesian Facebook page, they still love Multiply, and hope the company can still bounce back. This is a sad day for everyone involved.

Youshen’s pick: Google, Baidu and Many Web Companies Set Up ‘People Finder’ Boards After Chinese Quake

It is heartening to see continual relief efforts by tech companies after last Saturday’s unfortunate Sichuan earthquake in China. With China’s active Internet population, Google, Baidu, Qihoo and Sohu are well-positioned to leverage on real-time web data and innovative cultures to help families and friends find their lost ones. I look forward to similar innovation and speed for humanitarian relief worldwide.

Andrew’s pick: Japan’s GungHo Hits $10 Billion Market Cap

It’s really amazing to see how a game can generate $62 million to $86 million monthly. With the new spin-off series and how the game rockets up the company’s market cap, this smartphone game could really become a potential billion dollar franchise. Let’s see.

Vanessa’s pick: Singapore’s Dropmysite Drops a Bomb, Now Funded By 500 Startups

The team at DropMySite is closely watched by many in the Singapore startup scene. This great news shows that startups in Asia can potentially do the same and look to the United States for funding and expansion.

Speaking of expansion efforts to Silicon Valley, the world’s largest hackathon competition, AngelHack, will be coming down to Asia. Previous winners of the competition have also gone on to incubate at Y-combinator, 500 startups, and AngelPad. For you lucky Tech in Asia readers out there, AngelHack is giving out free tickets using the code TechinAsia. This could also be your chance to be part of the inaugural AngelHack accelerator program, so sign up in your respective cities now!

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Oh hi, I didn’t see you there! I’m Charlie Custer, and on today’s episode of China This Week, we’re going to be looking at some tech stories from around China that are definitely going to interest you. We’ve got everything from legal losses to vulgar billboards to government subsidies. What’s not to like? Stay tuned!

1. Apple and Samsung Make Donations, Offer Practical Support, in Chinese Quake Aftermath

In the wake of another devastating earthquake in China’s Sichuan province, tech companies like Apple and Samsung stepped up and did the right thing by making donations to help the victims. Is this a surprise? No. But it’s a good thing to do and they deserve to be recognized for it.

2. Apple: “Best Quarter Ever” in China with $8.8 Billion Revenue

Speaking of Apple, the company most definitely has money to burn following its best-ever quarter in China with nearly $10 billion in revenue. Get a lot of the size of those numbers.

3. China Won’t Force WeChat to Subsidize Telecoms, Says MIIT Spokesman

It was good news for Tencent and bad news for telecoms this week as MIIT announced that contrary to what an official had previously said, the government does not plan to force Tencent to subsidize telecoms for the bandwidth and business WeChat eats up.

4. Qihoo Loses Tencent Lawsuit (Again), Must Pay Fine and Show Frontpage Apology (Again)

Is the definition of insanity really doing the same thing over and over again? Qihoo has lost a big court case to Tencent for the third time in as many years. Its executive team may be defiant, but regardless of how they feel, they’re still going to have to post an apology and fork over another big wad of cash.

5. Why a $2B Chinese Gaming Company Put “Dick Strings” on a Billboard in Times Square

Controversial advertising sometimes pays off, and Giant Interactive came up with a very clever — if, some would say, vulgar — way of advertising its latest game.

That’s all for this week, folks. For our full spread of China coverage, you can click here or subscribe to our China RSS.

In the latest in a series of high-level executives at China Mobile being detained by authorities investigating an apparent corruption case, China Business News reports that according to sources at China Mobile, an executive at the company’s Tianjin subsidiary was detained by police on Tuesday. Sources say that four other employees nationwide were detained, but that the Tianjin Mobile executive was the highest-level employee taken by police on Tuesday. The other detentions were mid-level employees at Guangdong Mobile and Inner Mongolia Mobile, and one of the Guangdong Mobile managers has since returned to work, but the others apparently remain in police custody.

The detentions would seem to be an indication of continuing police investigations at China Mobile; investigations that came blazing into the public eye last February when former China Mobile vice-chairman was questioned for economic crimes. He subsequently resigned his position at China Mobile. China Mobile’s leadership apparently also expects the Tianjin executive to be gone for good; the China Business News cites sources as saying that internally the company is already making arrangements for finding a successor and redistributing the work.

The detentions come at a particularly bad time for China Mobile (not that there’s ever a good time to have your high-level executives detained by police), which is already facing slowing growth numbers, dropping calling and texting rates, and an increased threat from mobile web apps like WeChat that the company has thus far been unable to compete with.

(China Business News via Sina Tech)

Earlier this week, the Guangdong Higher People’s Court ruled in favor of Tencent and against Qihoo in a lawsuit filed over the “3Q War” between the two companies that kicked off in 2010. Qihoo was ordered by the court to pay $800,000 to Tencent and to display a prominent apology to the company on its websites.

If this all sounds familiar, it’s because Qihoo has made something of a habit of losing lawsuits to Tencent, having done so previously twice before. But Qihoo’s executive team remains unbowed, and in the wake of the decision, the 21st Century Business Herald is reporting that several executives including blustery CEO Zhou Hongyi have criticized the ruling.

Their beef revolves around the court’s justification for the decision, namely that Tencent’s QQ instant messaging service isn’t a monopoly because it has strong domestic (Sina Weibo) and international (Facebook, MSN, etc.) competitors. Zhou’s argument is essentially that Sina Weibo is too different to be considered a competitor, and that the international competitors shouldn’t count because they are either too different or too unstable or inaccessible in China to count as competitors.

Qihoo vice-chair Qu Xiaodong added that if QQ and Sina Weibo were similar products, Tencent would not have felt compelled to release its own weibo microblogging platform. Chairmain Ji Xiangdong also shed some new light on the cause of Qihoo’s complaints for the first time, apparently telling reporters that when Tencent forced users to choose between QQ and Qihoo’s 360 Safeguard antivirus software, 20 percent of Qihoo’s users uninstalled the software in a single day. Given Qihoo’s user numbers at the time, that would mean that Qihoo lost 40 million users literally overnight. Damn.

Anyway, it’s hard to imagine what Zhou and company hope to accomplish by criticizing the court’s decision publicly, but if the past is any indication, we can look forward to both companies being embroiled in ugly legal battles for the foreseeable future.

(21st Century Business Herald via Sina Tech)

China’s Ministry of Industry and Information Technology (MIIT) has released the latest official numbers for broadband penetration in the country. According to the Ministry, China now has more than 180 million broadband subscribers, and that number continues to grow.

While the growth of broadband internet is impressive, it’s worth pointing out that in some respects, China has actually skipped broadband and moved straight on to mobile. The country already has more than 1.1 billion mobile subscribers, and well over 200 million of them are already on 3G. In fact, the country broke 200 million 3G subscribers last October and by the latest counts, has probably already cracked 250 million. And with the number of smartphone users also climbing steadily and already over 300 million by some counts, it’s clearly the mobile market that’s going to be making the biggest waves for the immediate future.

(image source)

Image via Reuters

So it turns out Huawei may not be as Cartman-esque as we originally suggested. After the Financial Times reported earlier in the week that Huawei’s executive VP stated the company is no longer interested in the US, a Huawei spokesman told the Beijing News that actually, the FT report is based on a mistranslation and Huawei does not intend to abandon the US market.

According to the Huawei spokesperson, VP Eric Xu was asked by a reporter about where the company’s new growth markets would be in the future, and he responded that they would be in developed countries, not including the United States. “This does not mean that Huawei is giving up on the US market,” said the Huawei spokesman.

But it does seem the company is placing less importance on the US. The company’s CTO Liu Sanqi said Tuesday that Huawei was “not focusing on the US market,” a quote that the company does not seem to be disputing. So, while Huawei hasn’t totally given up on the US, it certainly has turned its focus elsewhere, specifically towards Europe and Asia.

(Beijing News via Sina Tech)

According to Tencent Games, Korean Game publisher Liveplex has inked a deal with Thailand’s SBT to bring its risque MMORPG Queen’s Blade Online to the country for the first time. Queen’s Blade Online, also sometimes called Scarlet Blade, has previously expanded into Japan, Taiwan, and China.

Like most MMORPGs, Queen’s Blade Online is apparently mostly a monster-killing grind, but unlike most MMORPGs its characters are mostly women (and disturbingly, one young girl) wearing some of the skimpiest outfits imaginable (yes, I know a lot of games have women in absurd outfits, but Queen’s Blade takes it to another level). I haven’t actually played it, but based on the videos I have seen, the dev team seems to have spent a lot of time on its, ahem, bouncing physics.

Whether you find this kind of game titillating or creepy, it’s hard to deny that it sells, and very soon, it will likely be selling in Thailand. But I challenge even the most dedicated giant-digital-boobs enthusiast to watch the last minute of this video (NSFW, obviously), which features some of the game’s leading ladies dancing spastically to club music, and not cringe.

(via QQ Games)

Ostensibly, the billboard is an ad for a new Giant Interactive fantasy game called Xianxia World that went into its first limited beta last Friday. But to understand why it says “dick strings” in huge characters — and why Giant would advertise a Chinese game in New York city at all — we have to go back a lot further.

“Dick strings” — diaosi in Chinese — is a term that originated several years ago on Baidu’s Tieba forums. As you might expect given its literal meaning, diaosi was not a term of endearment, it referred to people who were: “poor, short, ugly, fat, stupid, excessively-masturbating failures.” ChinaSmack suggests “loser” and “douchebag” as more succinct translations of the term’s official meaning, and both of those seem apt enough.

Over time, though, the usage of the word has changed dramatically. Although it still means “loser”, it has been co-opted by a particular subset of the online community and used as a sort of self-definition. Perhaps similar to the term “geek” in the US or otaku in Japan, diaosi began as an insult but has become something that many Chinese gamers and internet users self-identify as. These days, the term has real appeal to many who see themselves as perhaps not blessed with wealth or beauty, but still passionate about gaming and the internet. It’s a rallying cry and a way of relating to one another that’s self-deprecating but (some would say) also empowering.

Needless to say, this strikes plenty of people as ridiculous. Back in February, Chinese film director Feng Xiaogang kicked off a debate on Weibo about the term when he posted his thoughts on it and “grassroots,” another popular slang term that means poor or “common”:

Calling yourself grassroots is laughing at yourself, calling yourself diaosi is debasing yourself. They are two separate classifications; the former refers to the socially disadvantaged community, the latter refers to the idiot community.

But not everyone agreed with Feng. In fact, Giant Interactive CEO Shi Yuzhu rushed to the defense of the self-defined diaosi, writing “I am a real diaosi,” and then, tellingly, “I have already applied for a trademark for diaosi to use for an internet game.”

“Diaosi goddess” reads this image from the Giant game’s home page.

In a lengthy analytical piece, Sina Tech argues that the term doesn’t really mean “dick strings,” and points out that other Chinese terms like niubi (“badass”) have rather disgusting literal meanings but have become fairly normalized and acceptable in everyday speech nevertheless. It even (without irony as far as I can tell) points to the controversy surrounding George Bernard Shaw’s use of the term “bloody” in the play Pygmalion as a similar example of a controversy over “vulgar” language that ultimately became rather non-controversial as time passed and people got used to it. And while Shi Yuzhu is no George Bernard Shaw and Chinese internet forums are not Pygmalion, the point is that given time, diaosi won’t be considered too vulgar a term for use in advertising.

Actually, though, it is exactly because the term is vulgar that Shi chose to use it on the Times Square billboard. He and Giant never had any intention of advertising the game to Americans (there isn’t even an English version of Xianxia World); they simply needed a place that would allow the ad to run for a few days because they didn’t understand what it said. Most high-profile advertisers in China would certainly have turned the ad down for being vulgar, but in the US, apparently someone was gullible enough to take the ad without having it translated, and that’s how “dick strings” ended up in huge characters on a high-profile billboard in Times Square.

The point of the stunt was to drum up controversy and attention in China — in such a high profile spot, the billboard was certain to be noticed by Chinese visitors and reporters in the US — and boy did it work. Stories about the ad appeared all over the Chinese press, and then again last week when the ad was conveniently de-listed the day before Xianxia World‘s first beta launched. Even official state media like the People’s Daily and Xinhua covered the news, and of course it also sparked a lot of discussion and long analytical pieces of the sort you’re reading right now or that Chinese gamers have been reading on sites like Sina Tech.

As to whether Giant Interactive really buys into the diaosi mentality or whether it’s all just a cynical marketing ploy is impossible to say, but either way things have certainly worked out well for the company. It got much more attention than the average beta launch for what looks to be just another in China’s vast array of fantasy online games, and self-described diaosi may be poor losers, but a lot of them spend the money that they do have on games. Whether the controversy Shi has drummed up will translate into sales remains to be seen, but he’s put a lot of eyes on his game’s launch, and that’s an important first step.

China Mobile is China’s biggest telecom and has been one of the country’s fastest-growing state-owned enterprises. But the numbers coming out of the company over the past few months have made it clear that it and China’s other major telecoms face a grave threat from new mobile apps like WeChat. We already knew that Chinese people were texting less than they used to, and now it seems they’re calling less as well. With barely any profit growth over the past quarter and uses of its traditional services falling, China Mobile will likely have to up what it charges for internet services like 3G just to keep from posting losses. (That is, unless its own version of WeChat somehow takes off).

Interestingly, the company is still growing steadily by other measures; it picked up more than 26 million new 3G subscribers this quarter, for example. The problem is that it doesn’t make as much money from 3G subscribers using web services for calls and messaging as it would if those users were using traditional calling and texting. And as wifi becomes more common both in public places and in people’s homes, more and more 3G subscribers are actually using wifi to do a lot of their mobile chatting, which means that telecoms make no money off them at all.

So far, none of China’s telecoms have a good answer for how they can continue to flourish in a China where wifi is widespread and WeChat and services like it have taken the place of texting and calling.

(via Sina Tech, Image source)

It’s not clear whether the source of the earlier reports was incorrect or whether MIIT has since changed its tune — perhaps they read my colleague Willis’s impassioned argument for why WeChat shouldn’t be charged — but either way, MIIT’s making it clear that it will not get involved in the fracas would seem to leave China’s telecoms more or less on their own.

As for MIIT’s reasoning, Zhang Feng told reporters that the government wants to support innovation in the mobile and web industries. And indeed, as many observers including the aforementioned Willis have pointed out over the last few weeks, drowning a (debatably) innovative new mobile product in fees to subsidize the old, slow-moving telecom companies would have set a terrible precedent for the future development of Chinese mobile startups. Instead, Zhang promised, the government will keep out of the debate and let the companies themselves slug it out. Buckle your seatbelts, ladies and gentlemen, because we may be in for a wild ride after all.

(via Sina Tech)

UPDATE: Huawei says the Financial Times misunderstood what was said and actually it isn’t abandoning the US market.

So much for the American dream. After struggling to overcome regulatory opposition and its own reputation, Chinese telecom equipment company Huawei is finally calling it quits. At a summit on Tuesday, executive VP Eric Xu put things quite bluntly according to the Financial Times: “We are not interested in the US market any more.”

The company’s CTO Liu Sanqi elaborated a bit, telling IDG:

Don’t get me wrong, I’d love to get into the US market [...] We today face reality. We will focus on the rest of the world, which is reasonably big enough and is growing significantly.

Of course, that’s true, but it’s worth pointing out that the rest of the world isn’t necessarily all that excited about Huawei either. The company was turned down for ‘domestic telecom’ status in India over security concerns, has faced labor strikes in Indonesia, and Japanese telecom Softbank has said it won’t use Huawei equipment.

Still, the world is a big place, and of course there’s always Huawei’s home turf and its 1.3 billion denizens. So in the style of a migratory bird (I swear to god this is a relevant link), or perhaps in the style of Cartman from South Park, Huawei thumbs its nose at the US House Intelligence Committee and says in its best Cartman voice: “Screw you guys, I’m going home!”

(Financial Times and IDG via Ars Technica, headline courtesy of @samuel_wade)

Although obviously the number of phones Apple has returned to Foxconn is not zero (no manufacturer is perfect, after all), and Xing declined to share more precise numbers, he did say that it would be impossible for a factory to have such a high failure rate, and that there were quality control measures in place to prevent that sort of thing from happening.

Apple has still not responded to our request for comment, and is unlikely to do so, but if it does we will update both this and our original post with the company’s response.

(China Business News via Sina Tech)

When it comes to soccer¹, there’s one brand global video gamers prefer: FIFA. Despite being the product of America’s two-time “Worst Company Ever” winner EA, FIFA is beloved by fans both because it’s fun to play and because it includes tons of licensed teams from all the most popular soccer leagues around the world.

But Konami’s second-place Pro Evolution Soccer (PES, also called Winning Eleven in Japan) may have finally found a gap it can use to challenge FIFA’s dominance, especially in Asia: the Asian leagues. Konami announced on Monday that it has finalized a deal with the Asian Champions’ League that will see Asia’s top club teams coming to the game for the first time ever in PES 2014. And while FIFA does have teams from Korea’s K-League and Australia’s A-League, it doesn’t have any club teams from other Asian countries, so Konami’s game will be the first to offer those teams to players.

Chinese soccer fans, for example, will be able to play as China’s top club teams Guangzhou Hengda, Jiangsu Shuntian, Guizhou Renhe, and Beijing Guoan for the first time ever in a major soccer game. And Konami is reportedly in negotiations to bring the entirety of China’s Super League, Japan’s J League, and Thailand’s Premier League into the game as well.

Although the biggest European clubs have huge followings in Asia, Konami’s inclusion of Asian fans’ hometown clubs could be a way of helping it scoop up some of FIFA’s market share across the region. No team licensing can make up for a bad game, of course, and it remains to be seen whether PES 2014 will be able to compete with FIFA 14 on that front. But if the games are comparable in other ways, the pull of being able to play as the hometown heroes may be enough to bring some Asian fans over to PES.

In China, it already appears some fans are excited about the prospect of playing as Chinese Super League teams. The comments section on this article about the new PES 2014 seems to have descended quickly into banter and cursing, with fans talking about things like whether games played in Beijing Guoan’s home at Worker’s Stadium will feature the sounds of Guoan fans’ legendary foul-mouthed chants. If Konami can capitalize on that interest, it may just have found a way to challenge the dominance of FIFA in the world’s most populous continent.

1. Yes, I called it soccer and not football, because that’s what the game was originally called. Watch this newsreel clip of Liverpool FC from 1935 if you don’t believe me. Football used to refer to any game played on foot, with the most popular games being Association Football (the sport we now know as soccer) and Rugby Football. The name “association football” was later shortened to assoccer and then just soccer in the colloquial language of the time in the UK.

The best part of Traverik right now is probably how easy it is to use. It’s ridiculously simple. You just pick a destination and a date, and then Traverik will spit out an itinerary for you. From there you can switch things around, add or subtract activities, and even invite friends to work together on the itinerary and plan collaboratively.

The downside is that at least right now, Traverik doesn’t give you an itinerary so much as it does a list. For example, when I chose Beijing as a destination, Traverik spat out a list of pretty good places to visit, but they were sprawled all over the city and the way Traverik had ordered them would make getting from one to the next very inefficient. There are also no times supplied, so it would be tough for a visitor to know whether they should set aside 30 minutes or 3 hours for the Temple of Heaven (for example). The site also doesn’t seem to include many scheduled activities yet; most of what’s on its activities list are year-round attractions, so Traverik travelers aren’t going to be aware of any seasonal fairs, sporting events, or performances that might be going on during their trip.

The site just launched in beta last Septemeber, says co-founder Abhishek Deo so the company still has a lot planned for the future, so some of these problems will inevitably be rectified as the site is further developed. “We already have theme based itineraries for different cities aka, Honeymoon, outdoor, arts & culture etc.,” Deo told me. “In due course of time, holiday events & festivals will also be a major planning base for users.”

The company is also working on an Android app — that’s coming this May, Deo says — and other cool things like making bookings directly through the Traverik site and integrating the professionally-planned itineraries of tour agencies into the site’s offerings. As an total trip planner, I don’t think Traverik is quite ready for primetime yet, but it’s already a great way to see what activities are popular in whatever city you’re planning to visit, and once some of its new features are rolled out, it really could become a one-stop-shop for all of your travel planning needs.

(In the meantime, if you’re looking to plan a trip right now, I might recommend another Indian travel startup called Triptern, which we looked at back in February).

Specifically, the new regulations ban telecommunications companies from texting subscribers with any messages subscribers haven’t agreed to receive, and also bans them from continuing to text subscribers messages that the subscriber has explicitly stated they do not want to receive. MIIT has also asked China’s telecom companies to upgrade their internal systems for filtering out third-part spam texts.

Of course, it’s not clear exactly how MIIT intends to enforce this ban, and if it’s self-policed on the part of the telecoms, I wouldn’t expect to be recieving fewer garbage texts anytime soon. MIIT has actually been pressuring telecom companies to put a stop to text spam for a while now. It’s starting to feel like perhaps everyone will have moved to WeChat by the time things are fully sorted out, but nevertheless, any effort to reduce annoying spam is definitely a good thing. Here’s hoping MIIT can keep China’s telecoms in line.

(via Sina Tech)

Because Foxconn reportedly makes only between 1.5 and 2 billion RMB in yearly profit for the iPhones it produces, the company could be looking at around a sixty percent drop in profits this year.

That sounds grim, but it’s worth keeping in mind that as of yet, none of these numbers are official. It’s possible that the 200 RMB per phone estimate is far too high, although it’s also quite possible the phones will cost more than that to fix. It’s also possible that none of this is even true; while it has been widely reported in the Chinese tech press, the Chinese tech press has been known to make stuff up, and neither Apple or Foxconn have confirmed this story. We’ve reached out to Apple for comment and will update this story when the company responds (which we expect to be never).

Zorpia, it turns out, is a startup founded and run by Jeffrey Ng and based in Hong Kong. Launched all the way back in the early days of MySpace, Zorpia began as a social network that would facilitate unlimited photo sharing. Over time, Ng says, it has evolved into a service that’s more focused on helping people make new friends (he likens it to a digital bar or a town hall). It has also built up a very substantial base of registered users, growing from just 1.5 million users in 2005 to around 28 million users today, although just one million are monthly active users. Most of those users are in Asia, Ng tells me, and the service is especially popular in India, with over ten million registered users.

When I asked about user acquisition, Ng told me the site used a variety of techniques, mostly based around people inviting their friends. I explained about the emails I had gotten from my friend and my wife and asked Ng to explain why I was getting messages from people suggesting they had left me private messages on Zorpia when they clearly hadn’t. He told me he’d look into it, and but was never able to satisfactorily explain how that had happened.

To get to the bottom of things, it was clear that I needed to sign up for a Zorpia account myself. And so I did. As with all test accounts that I create for work, though, I used none of my real information, opened the account via a browser I don’t normally use, and registered using a unique email address created specifically for that test account.

Things looked bad pretty much immediately. On the account activation page, I noticed that three hyperlinks users might expect would lead to help pages or a “resend email” prompt actually redirect users to sketchy free-survey sites that seem an awful lot like scams.

(Ng confirmed that the links are there intentionally as advertising, but said that Zorpia has no control over what the links lead to as it varies based on the user’s geographical location UPDATE: Ng says that he was referring to the site’s banner ads, and that there should not be text-linked ads on the authentication page. “We simply do not understand how those links could appear on the screenshot you provided unless there was tampering,” he says. However, as evidenced by the screenshot above, they did appear when I activated my account.)

Once I logged in to my new account, I found another surprise: Zorpia was worried about my password security. A banner across the top of the screen blared that my password was “more than six months old.” Given that the password is one I’d never used before and had created only moments before, I was not expecting this. (Ng told me the message appeared to be a bug; however, as of this writing it has not been fixed UPDATE: Ng says the bug is now fixed.). But I ignored it because as you can see in the screenshots below, I had two new messages.

When I opened my messages, one of them was the boilerplate welcome greeting you’d expect from the Zorpia team. The other was an absolute shock. There sitting in my inbox just a minute after I first opened this account, was a message from my real life friend “Mike”:

That’s when I started getting goosebumps. That’s also when I double-checked with “Mike” to be sure he hadn’t somehow sent me a message — he hadn’t — but frankly, even if he had wanted to, it should have been impossible. I didn’t use my real name, my real email, my usual browser, or any real information about myself when setting up either the Zorpia account or the email account it is attached it. I also hadn’t told “Mike” I was planning to set up a test account of my own, and we live thousands of miles apart. It would have been nearly impossible for him to find my account even if he had wanted to in a sea of more than 28 million registered accounts. And of course, when that message was sent, he wasn’t using Zorpia anyway. He says he has never used Zorpia.

Zorpia CEO Jeffrey Ng told me that this was “very odd,” and that he’d have his tech team look into it. While I waited, I was thinking about Occam’s razor. How likely was it that some convoluted bug could randomly link two people who actually know each other from among the site’s nearly 30 million members? How likely was it that “Mike” could have found my account in the first place even if it was really him sending the message? The simplest explanation seemed to be that somehow (possibly through my IP address, which I foolishly forgot to obscure), Zorpia had linked my test account to my real identity, and then confirmed that I knew “Mike” through the access it apparently has to his email contacts list.

When Ng got back to me, he confirmed that that was indeed what had happened. Although I was using a separate browser to do everything related to Zorpia, I did load the “confirm account” page with my default browser once by accident because it is what opened when I clicked the account activation link. Previously, I had used the same browser only to unsubscribe from Zorpia emails — I have no Zorpia account — but nevertheless Zorpia apparently used the cookies from that interaction to connect my real identity (and thus my friendship with “Mike”) to my new test account.

Ng told me that when a friend joins, the system automatically sends them a private message from their friends already on Zorpia welcoming them. So, even though my new email couldn’t possibly have been listed in “Mike’s” contacts, his account automatically sent me a private message without his knowledge simply because I happened to once use a browser that once previously had been associated with unsubscribing from the spam emails Zorpia was sending me on his behalf.

After he explained this, even Ng admitted that this was a bit beyond the pale:

We do realize this comes off as creepy and poses a potential security threat to the user. Therefore we have disabled Zorpia from using cookie to store friend relationships already.

But he still wasn’t able to explain how Mike’s contacts — and my wife’s — got into Zorpia in the first place. Both deny having intentionally provided them to the service, and while Ng stops short of calling either of them a liar, he doesn’t seem to be able to explain how it could have happened otherwise:

From your friends’ experience, it seems like they simply do not recall they have added any friends on Zorpia. We will review our process and address this issue.

UPDATE: Ng says: “Zorpia is not a spam social network that auto-enrolls accounts,” and maintains that my wife and friend proactively invited their friends to join the service, pointing to server logs that apparently reflect this. Both my wife and “Mike” continue to deny having intentionally invited anyone.

My friends are not the only ones having a similar experience though. Although PandoDaily covered the startup last year and didn’t mention the problems it seems to have with emailing people who aren’t signed up for it, there are complaints about this dating back to 2009 at least. Each of the words in the previous sentence links to a different person complaining about being auto-enrolled in Zorpia or having their contacts list spammed by the service, and I found all of these quite easily and quickly via Google (where there are plenty more to be found if you want to go hunting). It seems like an awful lot of people have the same apparent amnesia Ng is suggesting my friends have when it comes to handing their contact list over to Zorpia.

UPDATE: Zorpia responds: “With 28 million registered users on Zorpia, we do not think a few hundred complaints online is statistically significant to merit an overall conclusion that Zorpia is a spam social network which auto-enroll accounts. Even if we assume there were 500 complaints, that represents a complaint to user ratio of only 0.0018%.”

Ultimately, though, the only way to be sure was to do another, more complicated test. After deleting all the cookies in both my browsers, I connected to my VPN (to obscure my IP) and opened up two new gmail and Facebook accounts, called ‘Zorpia Test1′ and ‘Zorpia Test2′. I made sure that the two were friends, and had a history of emailing back and forth. Then, I signed Zorpia Test1 up for a Zorpia account. I authenticated this account using both the Zorpia Test1 Facebook and Zorpia Test1 gmail accounts, but I never invited any friends (Ng had told me that all non-user friends needed to be invited manually by the user). I loaded the Zorpia “Add Friends” section once to be sure that the social network saw my connection with the ‘Zorpia Test2′ account, but I unchecked the name and backed out of the “add friends” dialog. I did not invite the Zorpia Test2 account as a friend or sign it up for a Zorpia account. Then, I waited.

And sure enough, within a couple days, the Zorpia Test2 account was getting messages from Zorpia. In fact, the Zorpia Test2 account somehow acquired its own Zorpia account! In the email below, you can see the welcome message I received about an account I never signed up for, using a username that defied the naming conventions I had set up for this test.

UPDATE: Zorpia says its server logs prove that I did accidentally sign up Zorpia Test2 for an account, and since I didn’t record video of my testing process, I cannot prove that I didn’t.

For me, the question of whether Zorpia is a real social network has been more or less put to bed. For a ten-year-old social network, there are simply way too many “bugs” here, and almost all of these “bugs” seem to result in non-users getting messages aimed at tricking them into joining the network. If years of online complaints haven’t changed the company’s ways, it’s unlikely this article will be any different.

So, unfortunately, I’ve got to say this: if you’re getting messages from Zorpia, your best bet is to click “mark as spam” and move on with your life. Zorpia, from what I can tell, is less a social network and more a mirage, an illusion designed to cajole and trick you into visiting so it can earn a few cents more from its ubiquitous advertisements. Abandon all hope, ye who enter here. This is social networking hell.

Of course, at just an average of 4.7 Mbps, even Shanghai’s internet isn’t very fast. Still, it dwarfs the average connection speed in last-place-finisher Inner Mongolia, which clocks in at just 2.3 Mbps.

(Qihoo via China Daily)

China’s Xiaomi is now widely recognized as one of the country’s best startups; it’s what happens when you take a good idea combined with experienced team and adequate funding and then insert all that into the perfect market environment. The company took in nearly $1 billion in sales revenue in the first half of 2012, and things are still going well today. But as Xiaomi founder Lei Jun writes in a recent column on his Xiaomi adventure, even for an experienced founder and investor, things don’t always look that rosy when you’re just starting out:

Actually, the decision to do Xiaomi was definitely not an easy one, there were a lot of things I was worried about. For example, I was going to do mobile phones and I had never worked in mobile before. Who would believe I was capable of making a mobile phone? Who would be willing to work with me on a mobile phone? What investors would be willing to give money to me to make a mobile phone? These are the questions I was anxious about.

Lei Jun continues:

Perhaps everyone underestimates the psychological pressure. I am also an investor, but the startup failure rate for investors is the same as for first-time founders. Many people might think I have a lot of experience to draw on, but often [if you're not careful] this experience can be a trap.

Indeed, failure may be an even larger psychological deterrent to those who have successful experience because the expectations for them are so much higher. Of course, this is not to say that a wealthy, successful man like Lei Jun is more courageous than the penniless tech geeks running their startups on bootstrap money and hope. But the pressure, the fear of failure, is powerful even for someone like Lei Jun, who is already at the top of the pyramid (so to speak). If you’re thinking of doing a startup, the psychological effects are definitely something you need to consider. (For more on this, also see Sohu founder Charles Zhang on why money and success hasn’t made him happy).

Lei Jun also makes the point that self-funding your startup can have a big influence on how investors see you. “If I didn’t have the courage [to invest in Xiaomi] myself, how could I convince Zhang Ying or other potential investors?” he asks. Of course, Mr. Lei was already a wealthy man by the time he founded Xiaomi, but the point is not so much about money as it is about demonstrating commitment. If you don’t believe in your own idea enough to put even a little money into it, why should any investor? There can be no half-measures. Whether you’re rich and experienced or poor and green, you’ve got to dive in headfirst. That’s scary, but as Xiaomi’s success (and the success of many other startups) proves, the rewards for your courage can be tremendous.

Lei’s whole piece is worth reading if you can read Chinese, although it’s very long. Or just check out our exclusive interview with him instead.

(iHeiMa via Sina Tech)

We’ve compiled some of the paper’s survey results into the charts below, but it’s probably worth mentioning how this survey was conducted. According to the paper, the People’s Daily Strong Nation web forum in collaboration with the China Mainland Marketing Research Co. surveyed 2,824 “ordinary people” across 28 Chinese cities using a phone system. With that said, some of the questions seem to have been a bit leading. For example, it appears that respondents were not even given the option of saying that their opinion of Apple had increased when responding to the first question.

(Apologies for the small, non-interactive charts; Google Spreadsheets was not being cooperative this morning).

The survey also found that long repairs and high repair prices were among Chinese consumers’ chief complaints about Apple’s after-sales service.

(People’s Daily via Sinocism List)

Dangdang CEO Li Guoqing

It seems Dangdang is mentioned less and less these days in conversations about China’s major e-commerce players. In fact, the most recent time we mentioned the company here at Tech in Asia was to point out that its stock is one of the all-time worst performers in China’s tech sphere. But Dangdang CEO Li Guoqing hopes to turn things around a bit when the company releases a new touchscreen e-reader for the Chinese market this May.

Li announced the device in an interview with DoNews, and although he wouldn’t disclose the price, he did say that it will cost more than the first generation Doukan e-reader the company produced, which retails at 499 RMB ($79). Most of the extra price will be coming courtesy of the parts and R&D costs for the new device’s hybrid touch/e-ink screen. Li says Dangdang plans to sell the device using the pre-order model to help cut down on warehouse costs and the risks of overstocking.

Li told DoNews that the biggest threat to domestic e-readers is Apple, especially in the wake of the release of the iPad Mini. And the patent Apple just filed for a hybrid LCD/e-ink display certainly sounds like it might pose an even greater threat to Dangdang’s newest e-reader, although the Chinese company should have at least a few months before Apple can get something using its new screen onto the market. Of course, there’s always the question of competition coming from e-reader kings Amazon as well, but despite the recent rumors, the China Kindle remains ghostware at this point.

The road ahead for Dangdang looks rough, but with Apple taking a series of body blows from state media over the past month (including the most recent accusation that its app store is full of porn), perhaps the government will weaken China’s appetite for what Li sees as Dangdang’s biggest competitor. Personally, I wouldn’t bet on it, but I could be wrong.

(DoNews via Sina Tech)

1. DNF (also called Dungeon & Fighter, Dungeon Fighter Online, etc.). A Korean-developed beat-’em-up game that’s pretty old (released back in 2005) but still very popular in China.
2. CrossFire*. China’s version of Counter-Strike (a tactical first-person shooter), another oldie-but-goodie that was actually developed by Korean devs SmileGate and released in 2007.
3. League of Legends. The DOTA-based competitive online game that has been immensely popular worldwide.
4. QQ Speed. A 2008 racer developed and released by — no big surprise here — Tencent Games.
5. QQ X5* (QQ炫舞). A casual dance game also first released by Tencent in 2008.
6. Dream of the Three Kingdoms (梦三国). A fantasy battle game developed by Hangzhou-based Electric Soul and released in 2009.
7. AgainstWar (逆战). A Tencent-developed online first-person shooter first released in 2011.
8. Fantasy Journey to the West. A fantasy RPG developed by Netease and first released all the way back in 2003.
9. Counter-Strike Online. The original tactical first-person shooter, popular around the world and still played in China too. Developed by Valve and Nexon, originally released in 2008.
10. NBA2KOL. As you can probably guess, this is an online basketball game developed by 2K Sports.

If you’re wondering why most of the games on this list seem really old, it’s because most of these games are frequently updated. Many of them now look totally different and have completely different content when compared to their original beta releases, so even if you’ve been playing the same title for years, the content stays fresh enough to keep gamers from getting bored.

(Info about the games comes from their Baidu Baike entries, image via this BusinessWeek article which incidentally happens to quote your humble correspondent.)

*Both of these games had alternate versions that also made the top ten list on QQ Games’s site, but since they’re just two different versions of the same game, I’ve left the alternate versions out of my own list.

Perhaps even more significant, though, is that CNNIC says 242 million Chinese users bought things over the web last year. That’s a big number, but in a country with more than 1.3 billion people, it also belies just how much room there is for the Chinese e-commerce market to grow over the long term — especially if China’s economy keeps growing along with it.

The most common purchases online — by far — were clothing items (including shoes and hats), with 81.8 percent of e-commerce users having bought at least one clothing item online every six months. Next was daily necessities, which 31.6 percent of users bought. Third in line was computers and other digital electronics, which 29.6 percent of users purchased.

40.7 percent of e-commerce users in China used a mobile device to browse e-commerce sites at least once in the past half year, and of those users, 53.6 percent used a mobile app connected to the e-commerce platform they were browsing (as opposed to the phone’s web browser). Unsurprisingly, that’s a significant increase from last year. And if Alibaba’s numbers are any indication, next year is likely to be even bigger.

(CNNIC via Sina Tech, image source)