Sohu.com – “The Search Fox”

I spent the morning with Philip Zhang, sales director at Sohu.com at his offices in the Science Park near the Academy of Sciences in Haidan. Through an interpreter, I learned some pretty cool stuff about Chinese web publishing, interactive networks, and wireless content strategies.

Sohu — which translates as “Search Fox” — is the grand-daddy of the Chinese Internet, and having listed on NASDAQ in March of this year, is one of the better known Chinese internet brands. It also helps that it is one of the few Chinese sites to have an English version, which at the very least allows inquiring Western browsers to check out what all the fuss is about. Soho is a site, but also a 1,700 employee networks that has a search engine engaged in a battle with Baidu (Baidu is the Chinese king of search. No one seems at all concerned with Google nor Yahoo) for dominance, has Chinaren — an “alumni” or social networking site; Focus, for real estate, and 17173 for gamers.

About 65% of the company’s revenue is from advertising revenues and the most profitable segments are IT, Auto, and telecomm (which includes wireless). Real estate is the most profitable segment for Sohu (not surprising, as I would say building materials is a bigger growth business than Internet, at least in Beijing). 10% of the income comes from wireless advertising — SMS, MMS.

According to Zhang, the primary online activities for Chinese users is pretty much the same as it is the world around:

  • Email
  • Search
  • News

The demographic for online users, vs mobile users, is 18-35 years old. Mobile skews to the 16 through 25 year old segment.

Sohu is big on blogs and claims to host over 4,000,000 blogs, where users can do the usual blog thing and upload to their hearts content. There are 40 million registered users in the overall Sohu “community” and the intention is to migrate that mob to the blog model over time.

Ads are sold on a day basis, let me repeat, a day basis. Not CPM or CPC. Day.

The killer for Sohu is the Sogu toolbar, this is their search play, and as I understand it, this browser plug in allows them to serve popups on other publishers’ site. This sort of freaked me out, and remember, this discussion was via interpreter so I may have misinterpreted it, but what I heard was this: the toolbar provides Sogu with the ability to “push” (I kept thinking Pointcast, but whatever) pop ups onto other sites.

Sounds positively Gatorish to me.

Rich media advertising is the hottest thing they have going. There is so much clutter on the typical page that it stands to reason that video based adverts are going to stand out. Sohu does offer a channel sponsorship model as well for exclusive ownership of specific “channels.”

On keywords, one cool thing they do is mash up maps with advertiser’s logos. Search for “Peking Duck” around Hohai, and bang, you will see the map with the Peking duck shops that paid for the right to be there appear.

Very cool stuff and further reinforcement that if you want to see the future of online advertising in large dollar volumes, go to China. If you want to make Jakob Nielsen have a seizure, ask him to critique any Chinese website. My favorite is http://www.it168.com — an IT site. I think I could count 14 ad impressions on the homepage, and some of them will induce epilepsy like that weird Japanese cartoon did to six-year old kids a few years ago.

More in a future post on Chinese page design and online clutter.

My thanks to Philip Zhang for his time. Very instructive. It’s a total battle of the bands over here and Philip says they have their hands full at Sohu dealing with the China market let alone consider exporting the model internationally.

Very few Chinese interactive media brands are operating internationally. Oak Pacific is looking for a US country manager. Sina has offices in the US. But so far, no hot interactive model has crossed out of the country. Give it time.

Technorati appears down within China

Or so it would seem. I spoke to a young American yesterday who explained the censorship and site blocking strategy and he said “everyone knows how to proxy around it. It’s no big deal.”

Wish I did. I need to run my daily searches against my favorite blog search engine. Google blog search next ….

… and it works just fine, it just isn’t as good at Technorati.

Wikipedia is dead too.

Breaking through the clutter in Beijing

I’ve been keeping an eagle’s eye out in the chaos and confusion of moving through Beijing for marketing impressions from Western Brands and comparing them to how Chinese brands represent themselves. To keep the discussion simple, I’ll first look at outdoor advertising and then in a second essay, look at online.

Outdoor advertising — and by this I mean bus shelters to buses, billboards to storefronts — really should be separated into nighttime and daytime effects. Nighttime is a battle of neon. Not a lot of it, saturated Vegas style, but islands of it that really stick out. Daytime is a war for space. The Baidaling Expressway, which runs north out of Beijing up to the Great Wall, has its share of billboards, but only once one gets inside of the fourth ring road (Beijing is defined by concentric circles of ring roads, like Washington D.C.’s Beltway). Then things get interesting. No Western brands appear until one gets into the heart of the city, and the most effective ones are actually building brands — IBM, Ericsson, Microsoft — which interestingly enough are not out in the main technology park in the Shandi district where Lenovo is based and one can see Western companies like Peoplesoft and Nordisk.

Once in the city proper, the advertising starts going nuts.

Here’s a few photos:

Then, one starts to notice some familiar brands, but still competing for attention:

And right around the corner ….

The situation in the stores is even more chaotic, according to my colleagues who visited a tech mall last night (which I need to do before the week is over.) Lots of machines competing for attention — like your average 42nd St. electronic store in NYC.

Bus shelters and sidewalk displays seem focused on mobile phones. Lots and lots of Lenovo impressions for our handheld business. This one is for a Lenovo PC.

And finally, my favorite impression of the day. From lunch:

Next up, online advertising for PCs in China. This is mindblowing stuff.

Mop.com

I spent the morning with Xiaoxin Chen, CFO of Oak Pacific Interactive, one of the largest interactive networks in China. Mindblowing discussion about the Internet in China, the explosion of wireless, file sharing, consumer willingness to buy online, Google, Baidu, and his hot company — one of the top ten in terms of traffic with 30 million visits per day and about 15 million registered visitors.

Mop.com — which translates into “cat rushing forward” — is primarily a site aimed at the younger market. This is a MySpace type of model for China. All Ajaxy and Web 2.0-ish but more.

You register and basically get your own place, your social network, your file sharing network, etc. This is where the two viral sensations of China — the guys in Yao Ming shirts lip synching (who have since been signed to corporate sponsorships) — got their start before they viralled over to Youtube.

Mop is a broadband network, and their TV site — itv.mop.com — is total video, from movie trailers to user uploaded content. The model is advertising based — I counted a dozen impressions on the home page, the design is crazed — and there is a premium model where users can buy more space, and services.
Chen, a Stanford MBA, is riding a tiger. An hour with him and you want to move to China and set up shop. This is Wild West stuff, volumes of users and ad dollars that no SOMA or Silicon Alley dot.com could have dreamed of in the late 90s. His partner, the founder, Joseph Chen, a Stanford classmate, sold his first company to Sohu, hung around for a while, left, went optical before that bubble burst, then got back into interactive media with ChinaInteractiveCorp — which is now Oak Pacific Interactive, a network which includes pcast, dudu.com, uume, and DoNews.

I need a month here. Too much to absorb in a week.

Inside looking out

Yesterday was an eye-opener in terms of getting a different vantage point on the same goal.

I spent the day working with my Chinese colleagues — not a new thing, I’ve collaborated with them via email, and in person in North Carolina since the middle of January. But being here, in their offices, watching how they work, and hearing first-hand their perspectives on what it means to be a Chinese company seeking to become a global company is an entirely different thing than making assumptions from North Carolina trying to help them realize that goal.

The entire vibe is one of intense and keen interest in figuring out the best way to build a true global company — not an integration of a Chinese and an American one. Having spent last week in Singapore with colleagues from all of the Asia Pacific region, instant messaging with the United Kingdom, organizing operations in Buenos Aries — this is head spinning to say the least.

While IT is the backbone, what’s more apparent to me is the necessity for the old cliche from the early days of online community, lessons learned on the docks of Sausalito by the first denizens of the W.E.L.L., by the Geeks on the Beach at Reel-Time — that face to face time is the most precious commodity of all. Flat worlds, fiber pipes, IM, SMS, global wireless … all expedite the collaboration, but nothing can ever replace the intense bandwidth of sharing a lunch with a colleague 13 time zones away from one’s home. I blogged early on global governance and management, now I’m living it, and it is apparent we’re on the threshold of something massive coming, the early stages of a new world that will demand new thinking.

The friction is — essentially –airplanes and jet lag. Language is a pain, but even so, seat me next to someone over a bowl of fishhead soup and I’ll gain a better understanding than I would from a 7 am conference calls and a hundred emails.

Been there and done that …

I walked my own personal, original, unrestored segment of the Great Wall on Sunday. Watching the sunset over the hills to the west, the cherry blossoms striping the slopes, the flapping of the flags on the parapets ….

As Richard Nixon said in 1972: “That sure is a great wall.”

China Internet thoughts

Things are too chaotic on the morning of day two to compose a reasoned essay on what the situation is regarding computing, Internet, mobile telephony, and branding opportunities in China. and I need to get outside and explore more on one of my precious days off in the country before a week of meetings.
So here’s a random list:

  • Right off the bat I saw a Yahoo ad on a bus. I love bus ads. CNET used them to great effect in Manhattan in the mid-90s. Yahoo was the only U.S. internet brand to make an impression yesterday and this one was sighted outside of the northern entrance to the Forbidden City.
  • Internet access in the two hotels I’ve visited is hardwired and fairly fast. I moved a ton of images up to Flickr without any problem. I’ve been googling with no hiccups and have seen no examples of censorship. There may be different “zones” for hotel access, but I can’t say I have seen any blocked messages or sites.Wikipedia is not loading, but running a politically sensitive search on Google permitted click throughs to sites critical of the government. I have not looked for any porn or other objectionable content. In no way have I felt that any online activities are being delayed, blocked or impeded in the four hours I’ve spent online.
  • There aren’t a lot of American brands in evidence. Microsoft has a large office building with their logo on it. But it seems to be European brands such as Lufthansa, Nestle, Volkswagen, Audi, and Mercedes in the highest abundance. This history plaque in the Forbidden City was sponsored by American Express. And on every plaque carrying this, there appeared to be smears of mud or clay where someone tried to obscure the tagline.
  • I have seen no Internet cafes yet.
  • Wireless phones tend to be either local brands, Nokia, or Motorolas. People use them incessantly. My step-sister, who is a film executive, has one glued to her head at all times. No one appears to be using them for email (I have not seen a Blackberry in use) and I don’t see many people texting SMS nor any advertising calls to action that use SMS codes.
  • I saw the word “Mashup” on a poster at this Beijing art gallery. The art here is amazing and the gallery district in a former factory in the 7-9-8 district is right out of San Francisco’s SOMA.
  • Blogging is big. I am going to meet some bloggers later this week, but I understand from my step-sister that a lot of business people blog here in Beijing. My China blogroll only now holds:
  • Virtual China: “Virtual China is an exploration of virtual experiences and environments in and about China. The topic is also the primary research area for the Institute for the Future’s Asia Focus Program in 2006. IFTF is an independent, nonprofit strategic research group with more than 35 years of forecasting experience based in Palo Alto, CA.”
  • ChinaTechStory: which isn’t working at the time of this post.
  • ChinaTechNews.com: a good frequent news feed.
  • There is a Starbucks inside the Forbidden City. Of course. The other big American brand is, of course, McDonald’s. While eating gyoza in an awesome little cafe, the family at the table next to us was tucking into a great meal while Junior ate a Big Mac and fried from the Golden Arches. The world isn’t flat, but it sure will be fat.
  • Chinese “OOH” — Marketing lingo for Out Of Home — billboards to you and me, is big. Like really big. The stuff is huge. It screams. We whisper. I’ll get some pictures of how we advertise Lenovo here. I got tons of Lenovo impressions yesterday. Big billboards at a convention/tech center and those mechanical rolling ads. All such brands are in English and Chinese.
  • The entire city is under construction. The locals blame a lot of the dust and air quality problems on construction. Apparently a construction moratorium is going into effect along with a coal ban inside of the third ring road to try to clean things up in time for the Olympics. Tons of Olympic branding everywhere and a big countdown clock of the days remaining before they open in ’08 at Tianamen Square.
  • That’s all for now. Time to lace on the hiking shoes and start exploring after a congee breakfast.
  • The Bride Wore Blue jeans

    Originally uploaded by dchurbuck.

    Walking over a bridge in Houhai, I decided to snap a picture of some long-pole anglers when this bridal party swept into view.

    Great day of walking from Tianamen through the Forbidden City, around the shores of Beihai Lake, and all the time eating, eating, eating.

    Photostream on Flickr

    Psychotic Snivelling


    psychosis

    Originally uploaded by dchurbuck.

    What a fun flight into Beijing. The announcement comes over the loudspeaker that we are having an emergency and to grab an oxygen mask. Great fun. I realized my last thoughts would be a white paper on lead generation techniques and not the 23rd Psalm.

    Then, as we were getting ready to land, they handed out health disclosure forms. I was drawn to “Snivel” and “Psychosis,” conditions I have been known to experience, but fortunately was not at the time.

    Then the lovely cabin stewards went through the cabin spraying some sort of “World Health Organization Approved” germicide which made me feel like I’d been bug-bombed by a can of Raid.

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