China becomes Web2.0 fanatical Holy Land: perish without making money

CNET published an article saying that China has become a Mecca for Web 2.0 and forget about Silicon Valley. The rapid growth of the middle class, cheap start-up costs, the popularity of PCs and internet-accessible handsets, greater local market competitiveness than multinational giants such as Google and Amazon, and other factors are driving capital into Chinese websites, online games and new advertising companies.

Although the profit is not high, the competition is intense, but the victor will obtain the huge return. One of them is Li Shanyou, founder of the video-sharing site 酷6网, who is probably the most avid web 2.0 people I've ever seen. To greet me, he called the old staff to install roof tiles and repair elevators. He said excitedly, haha, you are the first visitor to our new office, the old office is a rented house.

Lee has many reasons to be excited. When 酷6网 launched last September, China already had more than 200 video-sharing sites. But now the site has become one of the fastest-growing survivors. Lee claimed that in the last week of May, 2 million users were attracted to each day, and an average of 200,000 new users were added daily.

According to the Flow statistics agency Alexa number, 酷6网 is China's 46th largest popular website. 2006, The Advertiser has Hisense, Lenovo and so on, now includes Disney, Nokia, McDonald's, Motorola, Nike and Ford and so on. Baidu also signed a 2-year cooperation agreement with 酷6网 and invested in the company. Draper Fisher Jurvetson, a venture capital company, recently invested.

We first visited the sales team, which includes Sohu's top sales staff. He then met with the technical team and the chief technical officer who had previously worked in the Defense Department. Then went to the new video production room. Like the software industry, video-sharing sites are not too worried about piracy.

Ted Dean, general manager of BDA, says that online gaming is a huge success, and if you want to sell PS2, all games can be pirated, but online games just control the server, and a singer is more likely to sell ringtones than the Top 40 songs on the list because CDs are pirated. More traditional software companies also benefit from it.

Incesoft produces plug-ins that allow users to query information through natural language. When entering a flight ticket to Shanghai, the IM client will provide a Web page that picks up airline ticket purchases. It can also search for songs and weather information. Incesoft with the content provider to share revenue and make money, and with MSN, Yahoo signed an agreement.

The Harper group's portfolio illustrates a phenomenon in which American companies are mainly investment chips and internet companies, but most of the investment in China revolves around media and consumers. This includes the media, Laser international, banner nets, proud tour (Maxthon) and so on. "Many things in China are driven by consumers, not by technology," said Wayne Shiong, a partner at the Sino-OECD group.

The audience gained a lot of trust by fuelling the Web 2.0. The main reason is that the company's advertising screen is located at the intersection of densely populated lines, such as bank halls, shopping malls, convenience stores, elevators and other places. The company was founded in 2003 and successfully listed in 2005. The initial stock price was only 17 dollars, and now it has risen to about 44 dollars. In the first quarter the company's revenue amounted to $58.1 million, an increase of 75% per cent, and a 73% to 16.3 million dollars in profits. If Chen Haoyuan, the president of the neighboring network, says the rapid success of the new ads has changed the view of the business community and the advertising community, which has traditionally focused more on television and print advertising.

　　Cultural Differences

The success of many Chinese companies has paid the international giants a price. Google lags far behind Baidu, although the acquisition of local companies has not ruled out, but many Chinese say international giants ignore cultural differences. Incesoft CEO Max Yuan said that Google, for example, divided Chinese names into 2 separate words, affecting search results.

To prop up China's business, Yahoo is allied with Alibaba, while Amazon buys a network of excellence. Business models also need to adapt to China's national conditions. More than 83,000 screens owned by the audience are not actually connected to a network. If these screens are connected, a television network will be established and regulated by the Government. Therefore, advertising does not come from a central server.

The development of 酷6网 benefits from the unique needs of the people who submit the video part of the ad revenue. It then lists 10 top earners and 10 major video contributors, posted on the home page. Contributors often have access to 10-50% 's advertising split. Lee offers a variety of different forms of advertising, and some advertisers can choose to play ads before the video is played.

The company also held a competition: Yili company for the best advertising to provide 100,000 Yuan prize. The competition attracted 500 videos of professional and amateur submissions. Since last September, the top earners have received 5700 of dollars higher than a year's salary for many college graduates. The most contributors in May posted 7,089 videos, Lee said, which means posting 200 videos a day and I won't pay or offer an office to this person, but I'll give him the ad revenue.

Another factor driving the development of China's Web 2.0 is the cheap cost of Chinese media companies. A new company with 40-50 employees will be able to operate only 500,000 RMB a month. In contrast, chips or manufacturing companies will require factories, intellectual property, land and a large number of employees. These companies often try to sell their products overseas, while software companies often stay at home. Shiong said that the need for less money, survival is not a problem, the problem is how to expand. Want to be a media giant can not rest for a moment. Li said, either make money or die.