Ich Bin Ein Beijinger

A Surreal Summit

The highlight of this evening was, without doutbt, drinks on the 35th floor of the  Nikko Hotel in Dalian. A small group of us sat and listened to sci-fi author and blogger-provacateur Cory Doctorow address hot Saville Row bespoke designer Ozwald Boateng on the finer points of Linux while swilling a Chinese alcohol-free beer. Cory had pulled his sticker-covered IBM tablet Thinkpad out of a fuzzy orange Muppet-monster case and showed an Ubuntu distribution--he explained how the South African creator of that particular distribution basically made the thing user-friendly and easy to install--while Ozwald critiqued its overall aesthetic. Then Cory went on at length about the political peculiarities of early open source trailblazers like John Stallman, who evidently was an unreconstructed Marxist and something of an idiot savant.

Meanwhile I queried a very well-spoken Dutch conflict management diplomat named Jaime (H.R.H. Prince de Bourbon Parme), who happens to be a scion of both the Duth and Spanish royal families, on the best way for the U.S. to extricate itself from the Iraqi quagmire. He's been in Kosovo and elsewhere in the Balkans, in Northern Afghanistan brokering deals with warlords, and in all sorts of other hot conflict zones. But he's clearly never seen anything so intractable as Iraq. He and I are of the same mind: A staged withdrawal, ownership of the mess the U.S. has made, and abject apology to our allies--"who are very much like us, and who probably have some good reason to object when they object." 

Earlier, on the way up to the bar, I had a good and very serious chat with Cory about Singapore, China, the spectre of social unrest that haunts and scares people in neo-authoritarian technocracies like these two states, China's constant appeals to historical exemptionism, and whether--and if so, for how long--we should buy into those appeals.

It's a pity that this sort of shit only happens at gatherings like these: far too rare, and far too short.

Check out the Ogilvy China Digital Watch

With considerable contributions by a few already-overworked colleagues, I officially launched the Ogilvy China Digital Watch yesterday. It's a bilingual blog about technology and marketing, and I'll be occasionally cross-posting things I write for that blog over here. Thanks for your patience with me for not posting too often of late. I think things will pick up again now that the heavy lifting is done. I welcome and encourage your feedback: if you know of good web sites/blogs I haven't linked to, or if you've got a hot tip, or want to suggest a post topic or even write a guest post yourself, please write me either at the address listed for this blog or at kaiser-dot-kuo-at-ogilvy-dot-com.

Cool Web 2.0 app of the day - Anothr.com

I just met with Jim Sang, CEO of a Shanghai/Hangzhou based startup called Anothr.com. Anothr is an RSS tool that sends feeds you subscribe to directly to your IM. Right now it supports GTalk, Skype, and MSN/Windows Live Messenger.

The greatest thing about is its utter simplicity: you go on the Anothr.com website, click on your IM of choice, accept the add request from the Anothr bot, and a couple of seconds later you get your first message. Subscribing to RSS feeds has never been simpler: all you need to do, say, to subscribe to CNN is type in the word "CNN." It gives you back three choices, as in the screen shot from my Skype client below:

To select CNN.com -World (which you can see is subscribed to by 129 others) you simply enter the number 2. I subscribed at 5:31:10 pm, and received the first batch of news items--the three most recent--only 47 seconds later.

Each feed gets assigned a number (in this case, it's 5) and if I wanted to cancel, all I'd have to do is open a chat dialogue with the Anothr bot and enter "-5" to have it removed.

To subscribe to an RSS-enabled site (a blog--my blog, for instance) that no one else has yet subscribed to, you need only enter the site's URL. Add a popular blog--say, Danwei--and it knows of course what you want.

Jim has a team of 10 people working on this startup, which was introduced to me by Isaac Mao, who's on their advisory board. Good guy to have on an advisory board.

The question, of course, is how is it going to make money. I believe there's real potential. You know what feeds the user subscribes to, you know what's in the text of each feed, you know (based on his IP address) where he is, and you know what his status is (busy, away, what have you). I think targeted and highly relevant advertising could be introduced unobtrusively. Perhaps context-sensitive ads in between feed messages? Perhaps some primitive behaviorally-based ads? Or in-text ads? Anyway, I'm confident they'll find the right approach.

They've got the interface now in six languages (Simplified and traditional Chinese, English, French, Japanese, German, and Russian). There are English and Chinese versions of the website already up. Click on "Tools" on the website and, if your blog service provider supports it (mine doesn't, alas!), you can put an Anothr widget button on your blog so that people can subscribe with ease.

Most significantly for me--as someone who often grouses about the lack of real innovation coming out of China--is that this isn't a model copied from the Valley. (You hear all the time now how "C2C" means "Copy 2 China"). Jim Sang and his team oughta pat themselves on the back: They came up with the Anothr idea by themselves. Perhaps it's not for people who already use RSS readers and have gotten comfortable with them, but it's an elegantly simple little app, and it's really great for entry-level people who already have Skype or MSN on their desktops and don't know their RSS from a hole in the ground.

The new Google Pinyin IME really does rock - but may be partially (ahem) borrowed

Not that I do all that much writing in Chinese, but I just downloaded and installed the new Google Pinyin IME and it's pretty frickin' slick. Check it out. Thanks 小胡子 for the tip. One of the things I like about it is that it's pretty good at picking out when you want to type an English word in the middle of a Chinese string. Like this: 谷歌新出的汉语拼音输入方式真他妈牛. 可惜 Google 的中文名字那么fucking傻. That's just an example, of course, and not necessarily my opinion, or the opinion of my employer.

Update: Okay, so now Google seems to be admitting that they lifted the vocabulary list from Sogou, though they only go so far as to say it was from "non-Google sources." Good catch, Yee and all the other Chinese bloggers who noticed. According to the Netease story cited above, Sogou (Sohu's search engine) is demanding a public apology and that Google stop offering the download. Here's an English-language report from Xinhua on the kerfuffle. Stay tuned.

Cool gadget of the month

What is this thing? It's called--or will soon be called--the Flip, and if I'm any judge of such things, I think it'll sell like jianbing if and when it's introduced here. I was invited along by Jim Boettcher of Focus Ventures to see the Flip (currently being sold as "Point & Shoot" by U.S.-based Pure Digital Technologies) demo'd by Taylor Libby, an impressively fluent Mandarin-speaker from Seattle who's plotting China market entry for Pure Digital. It's priced very reasonably, listing at about $130 though you can pick 'em up cheaper on Amazon and at lots of retail outlets.

Think of it as the Lomo of video cameras--it's light, compact, and ideal for guerilla vloggers. It could get a cult-like following the way Lomo has. Or then again, depending on how it's marketed, it might just take with new parents who always want to have a video recorder handy.

It's ODM'd in Taiwan, not surprisingly, and has been on the market in the U.S. since fall of last year.

The cool things about it: it's the size of an iPod, nice form factor, records up to an hour of DVD-quality video; has the most incredibly simple interface imaginable--no on-screen UI, no menus, just super intuitive buttons; has that flip-up USB arm you can see in the pic that plugs right into your Mac or PC; and has all the software onboard--installed in seconds on your machine. The sound quality's surprisingly good. Oh, and on the software interface, you can upload your videos at a click to either YouTube or Grouper. It also comes with a simple auto editor that intelligently identifies highlights from selected clips and stitches them together. Don't take it from me: Walter Mossberg, the tech guy at the WSJ, praised it saying "stunningly simple to use... quality is remarkable."

Drawbacks? No SD card slot, but I can live without that because of the USB, and I suppose some will complain that there's no still photo capability. (That would have spoiled the simplicity of the interface, Taylor argued convincingly). This sucker's going with me everywhere and may even inspire me to start vlogging. I'll take it to my show tonight and try it out.

Oh, the handsome guy in the video screen in the pic is Tony Lo, a good VC friend of mine who lives in Shanghai. Tony just got married earlier this year. Congrats, Tony!

An IAB for the Chinese Internet?

Anyone who works in the world of the Chinese Internet knows that it's plagued by more than just bad designers of the maximalist school (where did I hear it once refered to as the "Las Vegas school of Web design?), and by more than overzealous censors who make us bother with proxies.

A third pox on the Sinic Web is the lack of reliable metrics, and of a neutral regulatory body that can keep everyone more or less honest. It doesn't just hurt advertisers, who can't get a good sense for effectiveness of online ads. It's kept the economics of the Chinese Internet in a state of arrested development. It's created an online landscape plagued by forced pop-ups (they drive page-views, after all) and all sorts of malware created by Internet entrepreneurs to impress gullible Sandhill Road venture capitalists. In fact, the lack of trustworthy numbers perpetuates the pack-the-page full, make-everything-blink look of Chinese Web sites: in this world without reliable metrics, the portals can't be blamed for selling online advertising by time and page placement rather than on a CPM or CPC basis, and for crowding their most popular pages with ads.

Help is on its way, I'm told. The director of the Internet Society of China, Hu Yanping, pictured above, stopped by the office briefly today to talk to me about an upcoming conference on Internet video and advertising, and to enlist Ogilvy's support in an initiative now underway to create a sort of Chinese IAB. Glad to see they're involving the agencies on this. The Internet Society's efforts should dovetail well with Amcham's Online Audit Initiative, headed up by Tom Melcher, Anne Stevenson-Yang, and Matt Roberts. (Anne in particular has worked hard to write an excellent white paper for the Amcham Media & Entertainment Forum, of which this is initiative is a part).

No one expects things to improve overnight, but it's encouraging to see that Hu's group is working with Nielsen/NetRatings and with the IAB to establish industry standards where none really exist. I expect Hu will come speak to the Amcham group about what they're trying to do and how they're going about it. He's said he's very interested in their perspectives. The one Online Audit Initiative meeting I attended was well-attended, which I took to be an encouraging sign.

Pete Townshend at SXSW

Absolutely nothing to do with China--oh wait, something the Who's Pete Townshend said about rock and politics did resonate with me and my thinking about the Chinese rock scene--but I took good notes as this massively iconic figure presented the keynote to the SXSW Conference and Music Festival, and thought I'd share some of what he said.

The Who has iong ranked among my favorite bands, and as much as I love Roger Daltrey's voice, loved the late Keith Moon's drumming, and adored the more recently late John Entwhistle's bass lines, it was Townshend who of course was always the sould of the band. For me, they're the band that produced for me ranks as the most perfect album (Who's Next, though Quadrophenia is up there among my all-time loves too) and best rock song ("Won't Get Fooled Again") to date.

So naturally I was thrilled to hear Townshend speak. He was lucid, as expected, and funny, at time way out there in space, especially when talking about his new project, which will formally launch with a webcast news conference on April 25. That project, which he calls "The Method," was based on the rather abstract concept originally behind Who's Next: that seminal album was originally written as another rock opera in the vein of Tommy called Lifehouse, but the concept-album idea was scrapped. (See the Wikipedia article on Who's Next for the whole story.)

"The Method," which will be Web-based, will supposedly allow subscribers to sit for a musical "portrait," based on inputs (physical? verbal? it's not enitrely clearr) supplied by the subscriber. The result is a unique piece of music corresponding to the subscriber. Townshend says he came up with the idea back during the creation of Lifehouse but "in 1971 there were no computers powerful enough to do what I wanted." He was told, "Nice idea--but you should get treatment. That came later. [audience laughs]."

In his own words, as nearly as I was able to transcribe:

You come to the Website and we give you a piece of music. You own a third of the copyright. This music is elaborated; we bring it all together, and play it in a big event. We gather and share our music together. My idea is that it might sound terrible, like a plane going by, or the gentle undulations of the sea.

On the Punk Rock revolution, he had this to say:

Punk triggered something. It vented something that was there, that needed to be vented. There was nothing wrong with the Electric Light Orchestra. There was nothing wrong with Ian Anderson's [sic] Yes. I was shopping the other day and heard some music, and said, "What an interesting blend of folk and classical--and it was fucking Yes."

Oh, and this is what made me think of Beijing rock, where a political/dissident patina gets painted onto so much music as a marketing ploy, or out of juvenile, misguided iconoclasm:

I didn't know what politics was when I was a kid. If we're going to make [rock music] political, let's make it fucking political.

Hallelujah, brother Pete. I have no objection per se to politics in rock music: I just want rock musicians to acknowledge that most political issues we confront just aren't that simple. For me, 99.99% of the time, reducing any issue to rhyming verses and a repeating chorus is just bullshit sloganeering that doesn't contribute to intelligent discussion. If I had a choice between allowing the ideas of rock musicans or, say, college professors to influence my political thinking, the choice for me wouldn't be a tough one.

SXSW-bound

In about 19 hours I'll be boarding a plane bound for Austin, TX, where I'll be speaking later in the week on a panel at South By Southwest about the Chinese music industry. Thanks to those who commented earlier and asked some good, tough questions.

South By Southwest has turned into more than just a music festival: Right now, the tech geeks have run of the place, and then the film nerds. Wish I could have made it at least for the tech conference. Read up on what's happening there at Read/WriteWeb, which has a man on the ground blogging away about some sessions he's attending.

I'll also take the opportunity after the conference to visit my two best friends, Drew & Dave, who live in Madison and Chicago, respectively. We played in a progressive rock band called Freefall together in college, and the weekend promises to be full of great food, music, and lively conversation.

"Chinese Joost" lands $23.5 in VC funding

I just read on China Tech News that UUSee, one of several popular P2P-powered television streaming sites now operating in China, has raised a handsome second round from some top-flight VCs including DFJ's Growth Fund, Highland Capital Partners and Steamboat Ventures. Congrats to the founding team, and to Sequoia's China team, who backed them in their first round.

For various reasons, part of which have to do with what's been so far a relatively lax regulatory environment, China has produced some genuinely kick-ass P2P networks--Xunlei, which Google invested in, and the lamentably named PPLive and PPStream, to name just a few making use of peer-to-peer technology. Lots of these are, shall we say, somewhat cavalier about intellectual property issues. UUSee's a different animal, working closely with big content providers.

Last fall, before I left Red Herring, I had lunch with with Sequoia partner Zhang Fan here in Beijing, and he introduced me to UUsee, explaining that what they're doing is quite similar to the Zennstrom/Friis project then known cryptically as "Venice" and now released in beta as Joost. (Get ourself invited: it's pretty impressive). While UUsee sure could stand to borrow some interface and artistic inspiration from Joost, I think Zhang Fan's basically right about the similarities in the underlying technology: basically, a distributed network of cached supernodes supplementing a peer network.

What's the future look like for P2P video streaming in China? Shanghai-based iResearch put the number of online video viewers at 63 million in 2006, and projects that will reach 180 million by 2010. Pre-roll video ad will be the key to monetizing this, of course. Sequoia is already backing one company that looks promising in that space--a start-up that's attracting a lot of attention in the China VC community. But I'll make you do your homework if you want to find out who they are.

My prediction for 2007/2008 (depending on timing of 3G network rollout): we'll see mobile P2P-based networks popping up like mushrooms across China.

The Sagacious Po Chi Wu

Some of the intellects I hold in highest regard these days come from the world of venture capital, and ranking high among the fine minds I've had the privilege of meeting is the Chinese-American veteran investor Dr. Po Chi Wu, one of the co-founders of Alameda Capital and now co-founder and managing director at DragonBridge Capital.

We'd met on a number of occasions while I was writing for Red Herring, but it wasn't until a Stanford Asia Technology Initiative conference we both spoke at last summer that we really hit it off. Over the last half-year or so he's become something of a mentor to me, always ready with good career advice and always eager to engage me in the big-think.

We try to catch a meal together whenever he's in town, as he was today. Over half a Peking Duck and some delicious Sichuan-style shrimp in chili oil in an eatery around the corner from me, we had a memorable and chat that ranged from social networking startups to semiconductors to the exigencies of Chinese statecraft, with a dozen other stops in between.

Po Chi will be officially launching a new early-stage China fund later this year, based out of Shanghai--finally making the move from his home in the East Bay. As a well-known figure in the Chinese entrepreneurial scene, I'm confident he's going have ample deal flow and deploy his fund effectively.

Po Chi, who holds a Ph.D. in molecular biology, was a child prodigy who started university at 14. He's also the son of the very illustrious physicist Wu Ta-you, who returned to Taiwan to head the Academia Sinica in Taiwan in the 1960s and is credited with laying the foundations for Taiwan's scientific and technological prowess in ensuing decades. Wu Ta-you was, incidentally, a colleague of my grandfather, Kuo Ting-yee, who was director of the Academia Sinica's Modern History Bureau.

I leave you with one pithy gem from our meal: "The creative person," Po Chi said to me, "simply sees more possibilities."

More on China's Second Life

"HiPiHi could go far if it deconstructs the SL user experience and reinvents it so that those of us who don't want to spend our hours messing with polygons can actually create something of interest," says Beijing tech maven and Silicon Hutong denizen David Wolf of Wolf Group Asia, in response to an earlier post on the Chinese clone version of Second Life.

That's exactly what they've done, David. I've just come back from their office in Haidian, where the 60-person team (minus most of the women today, as they have a half-day holiday in observance of Women's Day - happy 3/8, women!) is hard at work. Imagethief's colleague Xinhua--no relation to the Chinese newswire--is one of the early investors in HiPiHi and was good enough to invite me along with Net Jacobsson, a partner and senior vice president at Maxthon, to visit.

Getting anywhere in Second Life--being able to create things that don't suck--really does require patience, technical proficiency, and even a good measure of design sense. Many people I've spoken to about SL simply give up, frustrated at not being able to participate in the economy because they can't make anything anyone would want to spend their Lindens on.

HiPiHi will make it simple for neophytes, with tons of pre-fab stuff and even whole areas of the world that are preconstructed public spaces. For those who want to move beyond that, as many inevitably will, CEO Xu Hui told us that he's planning on rolling out in four phases, with names drawn from traditional Chinese creation mythology: Kai Tian Pi Di (开天辟地), or "Sundering the Heavens and Splitting the Earth," will introduce tools for rendering terrain: hills, fields, terraces, water, flora. Nv Wa Zao Ren (女娲造人), "Nu Wa Creates Humankind," will be about tools for more detailed avatar creation. Tian Gong Zao Wu (天公造物), "The Heavenly Duke Creates the Things") will introduce object creation, and so on.

It's still far from perfect of course, but I like what I see so far. I don't just mean the look and the playability, but I like some of the thinking behind it. They've thought through many of the potential pitfalls--like problems they might encounter from officialdom over the coin of the realm. Xinhua (the angel investor, not the news agency) tells me one of their investors is a high-ranking banker, and they've assembled a pretty formidable rules committee including major academics and other banking types to keep the virtual economy from rankling regulators, who've recently cracked down on "virtual money," according to Joe McDonald from the AP.

Joe McDonald, by the way, was my high school classmate at University High School in Tucson, and was born on the same day as me--March 7, 1966. What an odd coincidence that we both ended up in Beijing. We once camped out for tickets to see Rush, the Canadian power trio, on their "Grace Under Pressure" tour I believe it was, and ended up getting front row seats. Okay, back to virtual lives, which as you can see aren't necessarily more lame than real ones, at least when you're in high school.

HiPiHi is counting on multiple revenue streams, including sale of virtual property and in-game ad placement. (Ads! Cool! I work for Ogilvy, remember?). They've got interactive ads that brand advertisers or plain old users can rent, mostly in the public areas: click on them, and they show additional info as well as hyperlinks to the "world outside." They are, however, going after a younger demographic than SL--sensible, given they'll want to keep the whole thing very G-rated.

What about bandwidth issues? They're making the client relatively large to reduce load on the servers. The client weighs in at about 20 megs right now, and might get bigger, but with the thing distributed as it surely will be on P2P servers (Xunlei et. al.) it won't be a heavy lift to download.

Default avatars are Chinese-looking, which is what I expected. Nudity isn't possible that I could tell. Other neat stuff: Time changes, and the atmospherics of day-to-night are quite pretty. Behold:

HiPiHi is actually in a "closed Alpha" at this stage, and not in Beta as I had earlier been told. They're opening it up to a thousand Beta testers in about a week, ramping up in four phases to 100K users by June or July. They don't actually plan a hard launch until fall.

A good friend who knows this area well had some good questions that he emailed me, alas, after I'd already gone to HiPiHi -- including whether they intend to make their world "shardless" the way that Linden Labs has made SL, and how they intend to actually prevent people from doing naughty things that the government might not like.

I'll follow up with those and other questions in the next couple of days. If you've got questions you'd like me to put to Xu Hui about his new virtual world, fire 'em at me. (I doubt I'll have many Beta invites, unfortunately, so unless we're good friends and your Chinese rocks, please refrain from asking).

Lost in Translation No More

Tangos Chan over at the China Web 2.0 Review highlights a terrific new Chinese-English/English-Chinese translation site called Yeeyan (译言)that combines Google machine translation and hands-on translating by peers. (The Chinese-to-English just launched days ago). Click over to Fred Wilson's site (A VC) for an example. He gives them props for giving him attribution and a link back. The translator gets a little credit, too--deservedly. Just for yucks, here's what the machine trans version of a recent post looks like.

They're already posting numerous well-polished translations, mostly from English to Chinese, of important bloggers, mostly writing on the tech industry. These guys are going to make it much easier when we launch the Ogilvy digimedia blog soon, which promises to be a totally bilingual blog.

Another translation tool I simply adore is Adsotrans, which was developed by a Canadian feller by the name of David Lancashire, a grad student from Cal Berkeley living in Beijing Shanghai (Brendan informs me that David's now living in Beijing in spirit only--he's not diggin' Shanghai though he's working for the very cool company Mandarin instructional startup ChinesePod.) Adsotrans uses multiple open source dictionaries and allows users to modify annotation. the interface is awesome.

Virtual Humping

Had lunch with a friend just now, one of the Seven Sages of the Chinese Internet World, very tapped into what's happening in the scene. He'd just seen my post on the Chinese Second Life, HiPiHi, and mentioned--so did Fanfan--another similar game, though more Chinese historical costume-drama themed, that's been running for a while called Wanmei Shijie (完美世界). One of Fanfan's friends is thoroughly addicted.

While I held that HiPiHi (and/or the clones-of-clones that are bound to come tumbling after) will probably fare well in China, my friend wondered how it's going to work without the two great pillars of Second Life: Sex and gambling. I guess I've been out of touch, but evidently that's what it's all about. Shouldn't surprise me. I guess China's virtual worlds will be properly Bowdlerized.

It's testimony to the excellence of the fare at the little newly-opened Mexican restaruant at Wanda Guoji that I was able to eat even after my friend whipped out his SmartPhone and proudly showed me a clip of his avatar in flagrante delicto with someone else's. Nicely appointed room, I thought. "That's me on top," he said. And the woman? "His name is probably Frank, and he probably lives in Iowa." He went on the explain that you attach your member, select a position from a menu, and can control the rate of humping. Do you ever, you  know, actually bring things to a climax? I asked, though less euphemistically. "That's the great thing," he said. "You can go for hours!"

Gee, sounds like tremendous fun. Who needs Kundilini Yoga?

Second Life cloned for China

It was inevitable: A Chinese company has launched is closed-beta testing a version of Second Life--and probably not the last we'll see. Called HiPiHi, it seems to have hit the Web late last year: Chinese blog posts that I failed to notice talked about it in some depth as early as December 6. No affiliation with Linden Labs, which created/operates Second Life, that I could see.

There's some biographical info on the founder/CEO Xu Hui here.

Are we going to see a mad rush by advertisers to get into HiPiHi? Is Xinhua going to set up a news bureau? Will HMB, or whatever the currency is called, impact the value of the RMB?

My gut tells me that done right, this could be quite substantial in China, and might have more legs than its U.S. counterpart. For one thing, MMORPG culture is pretty deeply embedded among Chinese netizens, and many players are very used to "repatriating" currency earned in the in-game economy to real life. HiPiHi seems to have made dumbed-down object creation tools available while keeping more advanced options available to the more proficient--don't quote me on that, I've not really played around with it yet.

There's a definite feminine sensibility to the pitch video, which you can download (.wmv) here: a female narrator and avatar, emphasis on the outfits, the landscaping, the houses. Going after women is probably the right move: there are plenty of online gamers in China, but few of the hack-and-slash MMORPGs really work for women.

I'm curious to see whether they'll add distinctly Chinese elements to it--traditional archicture, music, prefab landscape things (say, like Guilin-style karst limestone formations). Also really curious to see what kind of scripts people write. Who knows? Someone might do good business making paired marble lions for people can flank their doorways with. Or selling a two-handed namecard hand-off script.

I'll see if I can get a beta invite, and get my wife to play around with it and report her feedback: she was really into The Sims for a while, and will probably dig this. (We set up Second Life accounts, but the lack of a Chinese interface was frustrating for her, and all she did was create an avatar that looked an awful lot like herself in real life. Vanity, thy name is...) 

Thanks to VirtualChina for this.

Thanks, Rocky!

A delightful gift (pictured right) arrived at my office today, with a note from my friend Rocky Lee, a very talented lawyer at DLA Piper Rudnick Gray Carey here in Beijing. I was very touched: he'd bought this with me in mind, knowing my weakness for single malts. And he suffered through an hour-long lecture on peat roasting, malted barley, and the mysteries of Port vs. sherry vs. bourbon casks, all delivered (doubtless in a nearly uniintelligible brogue) from a "bearded Scotsman" in the duty free shop. Forgive me for my inability to banish the image of Groundskeeper Willie that formed as I wrote those words. There's an even better bottle, Rocky assures me, waiting for us to share when he gets back from the States--though I reckon given his infamous aldehyde dehydrogenase deficiency, I'll probably drink more of it. Wille said it was his very favorite, after all.

Infamous? Who else could know of Rocky's missing enzyme? Why, readers of The Red Herring, where I once published the tale of how the good Mr. Lee played Virgil to my Dante in my descent into the depths of the Beijing nightlife scene. (Registration required, I fear). Lots of tech deals get made, you see, between happy hour at Centro and the wee hours at clubs like Vics, Babyface, and Tango.

Rocky's note marked the final release of what tension may have persisted between us in the year-and-a-half since I wrote that story. Understandably, he was a little freaked out by it, even though he really was exceptionally well-behaved through the whole thing--I played fly-on-the-wall on many nights out with him--and even though I took pains to show just how in-the-know he is when it comes to tech deals going down in China. He's often the first person I'll call still when I want the skinny on a start-up. I never intended to get him in any trouble. And so I was enormously relieved when a partner at DLA Piper, which had hired him away from the firm he was with during our adventures, told me that they hired Rocky in part because of, and by no means in spite of, what I'd written.

If you like that one, check out my pentultimate swan song, "Taking the Plunge," in which your erstwhile correspondent tailed a Valley venture capitalist during an extended stay in China.

Piper Internet Research - The User Revolution

Piper Jaffray research analysts led by Safa Rashtchy published a voluminous report Thursday--we're talking 425 pages--called "The User Revolution: The New Advertising Ecosystem and The Rise of the Internet as a Mass Medium." Among its key findings, released in an industry note:

• We expect global online advertising revenue to reach $81.1 billion by 2011, representing a 21% CAGR (2006-2011).
• The User Revolution. The advertising world is going through a revolution, one that we call the "User Revolution" as it is happening primarily with the consumers, who are taking control of content consumption and branding. We believe this trend will cause a significant rise in prominence of the Internet as a major content consumption and marketing medium.
• "Communitainment." The Internet has increasingly become a principal medium for community, communication, and entertainment--three areas that have collided together and are impacting each other's growth--generating a new type of activity that we call communitainment.
• The Internet Is Mainstream. The Internet has become a mainstream media outlet that now rivals traditional media for reach and advertising dollars.
• Media Fragmentation. The proliferation of online and offline media outlets has resulted in shrinking television audiences and an increasingly fragmented media landscape.
• The Golden Search. We believe search continues to gain ground, driven by the rise of search as the New Portal, the increasing use of search in branding campaigns, and the local search opportunity.
• We believe Google's wide variety of non-search-related products creates a virtuous cycle of brand affinity that drives incremental search volume.
• Video Ads Could Drive The Next Wave. We believe Internet video ads could become a game changer for large brand advertisers, who are used to the 15- or 30-second TV commercial
• Internet Usage Patterns Are Changing. Portals maintain the highest reach, but the fastest growing category of destinations is communitainment sites such as MySpace and Facebook.
• Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding, and increased site visibility.
• Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.
• Watch These Companies. We expect companies such as Google (and YouTube), Yahoo!, Disney, News Corp, Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix, Wikipedia, MobiTV, Digg, and Hakia to be the most important players to watch.
• Conference Call. We will be hosting a conference call on Tuesday, February 27 to discuss the main findings from our report. Please contact your Piper Jaffray Account Executive for a copy of the full "User Revolution" industry report and for information about the conference call.

None of this, so succintly put, is going to come as a surprise to anyone who's been watching development on the Internet in recent years. But the report itself is chock-full of eye-opening (and, from where I sit, frankly encouraging) findings regarding the decline of television viewing, changing viewing behavior--more ad-skipping, multitasking while TV viewing, and so forth--and on the decline of broadcast TV ad as percentage of total ad spend.

Safa spends a lot of time in China, and watches Chinese Internet companies quite carefully. I ran into him just before CNY in the lobby of the St. Regis Hotel in Beijing on one of his many annual trips out here. There's a section on International Search Markets, with a nod to Baidu's rope-a-doping of Google and Yahoo in this market; and the report gives quick summaries of some Chinese companies to keep an eye on, including the ad network Allyes, the ubiquitous Focus Media, Oak Pacific Interactive (the consortium which operates Mop.com. DoNews.com,DuDu.com, UUme.com, Renren.com and a couple of others), Sina, and Sohu. But if you're looking for the answers as to how all this will shake out in China, you may be disappointed.

China's a different animal in some regards: Internet penetration is still just north of 10%, and though Internet ad spend's growing at a healthy clip--twice the CAGR that Piper Jaffray forecasts for global online ad revs, according to some reports--it's growing still from a very small base. Meanwhile Web 2.0 Fever has definitely caught on in China, and the Internet has gone mainstream--at least with the most desireable segment of the demographic, from advertisers' perspectives. Media is certainly fragmented, and that's been helped along by the paucity of great programming on television. Search looks like it's on track to dethrone the portals as the primary point of entry for most Chinese Internet users, but the portals--particularly Sina and Tencent (don't know why Safa & Co don't mention Tencent)--have quite a hold still. TiVo or TiVo-like DVR products haven't made serious inroads yet (though you might keep your eyes on AaaHaa Media out of Guangzhou);

When it comes to digital media advertising in China, lots of things are still very much up in the air: Will Internet video ads be a major driver? I've met with one company that's got an amazing network of video sites--YouTube clones, P2P streaming companies, IPTV providers--and some very nifty technology. I'm confident that advertisers will be convinced of this; I just wonder how ready people are for pre-roll commercials tacked onto the stuff they're want to watch on UUSee, or 6Rooms, or Yoqoo, or PPLive.

Two things in Piper's key findings especially resonate in China: The critical importance of ad networks (like Allyes) and the rapid evolution of agencies into tech-savvy entities with expanded offerings. Watch this space and you'll find out how one agency, at least, is evolving very rapidly, God willing.

A tip-of-the-hat to Craig Watts for pointing this report out to me!

Dammit, missed the Chunjie Wanhui (again)

Joel Martinsen, one of my favorite commentators on the Chinese cultural scene, has a great post over at Danwei on the evidently disastrous CCTV Gala this year. I was blessedly spared watching it this year, though in plenty of years past I've been in sneer-and-groan sessions. That's just not any fun for me, but that's the stage that China's going through now. Allegations of plagiarism, flubbed lines, and political ineptitude aside--all that's detailed by Joel in his post--the whole "Whither Chunwan" question must be utterly confounding for CCTV programming directors. It's a relic of a simpler, pre-snarky age in China, and certainly ain't compelling content for younger urbanites. But they can't make the thing inaccessible to the vast majority of viewers out there, who still look forward, even to the costumed minority dance numbers, and who are genuinely entertained. Chunwan's really become something of a marker of the great cultural divide in China. I do pity the folks who have to put the thing together every year.

Perceptive Pixel

One of the cooler things I've seen today, courtesy of Future Feeder.