MEDIA: Reuters Trims China News Site, in Bow to Beijing

Bottom line: Reuters decision to put its Chinese-language website on hold is partly a surrender to Beijing, but also acknowledges that new approaches are needed to succeed in the nation’s restrictive media space.

Reuters revamps China consumer strategy

No one else is writing about the latest strategic shift at Reuters’ (NYSE: TRI) Chinese language news site in Beijing, probably because the actual number of headcount reductions is quite small, at less than 10. But the move has huge symbolic significance, since it looks like an admission of defeat to Beijing censors who blocked the site in China more than a year ago. At the same time, the move also represents a certain realism, and the fact that Chinese consumers increasingly get their news via other channels anyhow, most notably social media. Read Full Post…

INTERNET: Smog, Propaganda Boss Greet Facebook’s Zuckerberg in Beijing

Bottom line: Mark Zuckerberg’s latest visit to Beijing and meeting with a top propaganda official show his hopes of bringing Facebook to China are still alive, and could result in announcement of a new joint venture by year-end.

Facebook’s Zuckerberg back in Beijing

Facebook (Nasdaq: FB) chief Mark Zuckerberg may not have much chemistry with Chinese President Xi Jinping, but he certainly seems quite capable of getting meetings with high-ranking Chinese Internet and propaganda officials. Just a couple of months after returning from paternity leave for the birth of his daughter, Zuckerberg was back in Beijing over the weekend to attend a government-sponsored forum, as he pursues his aim of bringing Facebook to the world’s biggest Internet market.

Zuckerberg is certainly no stranger to meetings with top Chinese officials as he pursues his goal. Last year he made headlines when he reportedly asked President Xi Jinping to choose an honorary Chinese name for his daughter during Xi’s state visit to Washington, even though his request was ultimately declined. And in late 2014, he hosted a tour at Facebook’s Silicon Valley campus for Lu Wei, minister of the Cyberspace Administration for China. Read Full Post…

GUEST POST: How Netflix Can Win in China

By Jeffrey Towson

Netflix looks for best China entry

There are at least three ways Netflix (Nasdaq: NFLX) can win in China. And they are realistic options that have worked for others.

But first, a few points about the situation in Chinese online streaming.

Point 1: The China entertainment market is rocketing upwards, and it will soon be the largest in the world. This huge opportunity is fueling a major fight between China’s cash-rich Internet and media giants. This hyper-competition is also creating a window of opportunity for Netflix because it has valuable things to offer to these competitors as they slug it out.

Point 2: Online media in China is very political and likely no foreign company will have control of a license or broadcast rights. So Netflix needs to be realistic about what is possible.

Point 3: The other big issue is the strong local competition. If Netflix wants to win in online streaming in China, they need to be prepared to fight for a long time.

Read Full Post…

INTERNET: Baidu Talks De-Listing, Qihoo Chief Naps at Internet Pow-wow

Bottom line: China’s global Internet conference this week was mostly empty pageantry, but it did reveal that Baidu might like to privatize from New York one day, and attracted a handful of China-friendly global executives.

Wuzhen Internet pow-wow mostly empty talk
Wuzhen Internet pow-wow mostly empty talk

China’s big Internet pow-wow this week in the picturesque town of Wuzhen hasn’t produced much news despite its big aspirations, reflecting Beijing’s tight control over cyberspace and companies that do business there. But the globally-minded event did produce at least one interesting tidbit on the recent privatization wave by US-listed Chinese companies, and also an entertaining photo of 2 top executives that went viral online.

The news item came from Robin Li, founder of leading Chinese search engine Baidu (Nasdaq: BIDU), who hinted that he hopes to someday join the recent wave of Chinese companies now privatizing from New York due to undervaluation. The photo that went viral captured a humorous moment involving a catnap during the conference by Zhou Hongyi, the controversial and more often outspoken CEO of security software specialist Qihoo 360 (NYSE: QIHU). Read Full Post…

INTERNET: Google Tries Transparency on Road Back to China

Bottom line: Google should follow the example set by LinkedIn and Apple and be more transparent when it returns to China, and should work with Beijing to forge a more constructive relationship.

Google eyes China return in 2016

One of the strongest signals yet that Google (Nasdaq: GOOG) could soon return to China came late last week, when media reported the company was aiming to open a Chinese version of its Google Play app store next year in accordance with relevant Chinese laws. Such a move would represent an important improvement in the company’s relationship with Beijing, coming 6 years after Google shuttered its China-based search service due to a disagreement on self-policing policies that apply to all sites in China.

The shift is being driven by both sides, amid a realization that they can work together constructively to each other’s benefit. Google’s realizes that China is a market it can’t afford to ignore, with the world’s largest base of 600 million Internet users and 1.3 billion mobile subscribers. Beijing also realizes that a high-tech giant like Google can bring important technology and know-how to the country, whose large stable of smartphone makers already rely heavily on Google’s free Android operating system (OS). Read Full Post…

News Digest: September 25, 2015

The following press releases and media reports about Chinese companies were carried on September 25. To view a full article or story, click on the link next to the headline.
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  • China Telecom (HKEx: 728), Unicom (HKEx: 762) May Merge – Deutsche Bank (Chinese article)
  • Didi Kuaidi in Strategic Partnership with LinkedIn (NYSE: LNKD) (Chinese article)
  • Toshiba in White Goods Deal with China’s Skyworth (HKEx: 751) (English article)
  • Huishang Bank Turns to HK for Share Sale After China Rout (English article)
  • JD.com (Nasdaq: JD) Boosts Asia Reach With HK Office, Logistics Tie-Up (GlobeNewswire)

TRAVEL: Watch Out Tujia, Airbnb Checks in to China

Bottom line: Airbnb should have a strong chance for success in China, thanks to its good choice of local partners, strong experience in its field and relatively little competition from homegrown rivals.

Airbnb hangs out China shingle

Not too many foreign Internet companies are coming into China these days, mostly due to the poor track record for previous big names. But that lackluster record of isn’t deterring online travel site Airbnb, which has been quite high-profile with a formal announcement of its entry to China.

The road into China is littered with cases of failure, with big names like Google (Nasdaq: GOOG), eBay (Nasdaq: EBAY), Yahoo (Nasdaq: YHOO) and Groupon (Nasdaq: GRPN) all entering the market at various times, only to withdraw later. In most cases companies failed to anticipate stiff competition, which was ready to use many tactics the big international names considered unacceptable. Failure to adapt to local tastes was also a factor, as many of these big names tried to use identical business models for China that they did in the west. Read Full Post…

INTERNET: Twitter CEO Exits, China Re-Think Coming?

Bottom line: Twitter’s new CEO is likely to re-think the company’s decision to stay out of China due to Beijing’s strict self-censorship policies, and could ultimately make a play for the market in the next 2-3 years.

Twitter to re-think China under new CEO?

It seems that Weibo (Nasdaq: WB), often called China’s equivalent of Twitter (Nasdaq: TWTR), isn’t the only one struggling these days in the social networking (SNS) realm. The original Twitter has just announced that its own CEO Dick Costolo has succumbed to calls for his resignation due to stagnating growth, meaning his replacement will come under intense pressure to jump-start the company’s prospects. One of the fastest ways to do that would be going to China, leading to the intriguing prospect that Twitter’s road map could bring it to China sooner than many expected under its yet-to-be-named new leader. Read Full Post…

INTERNET: Google U-Turns Back To China With App Store Plan

Bottom line: Google could open a Chinese version of its app store by the end of this year and spend aggressively to quickly gain market share, but would face negative backlash from western critics for its U-turn back into the sensitive market.

Google lobbies China smartphone makers to include Play Store

Global Internet giant Google (Nasdaq: GOOG) is reportedly eying a return to China, with plans to launch a Chinese version of its flagship Google Play app store. The move, if true, would mark a major flip-flop for Google, which withdrew its core search engine from China in 2010 after a high-profile spat over Beijing’s strict censorship policies. But as many similarly principled companies quickly discover, China is a market that is simply too big to ignore.

That quandary led top business networking site LinkedIn (NYSE: LNKD) to enter China last year, despite expressing its own reservations about censorship, and top social networking (SNS) site Facebook (Nasdaq: FB) is also lobbying strongly for such a move. Google’s latest campaign comes in a the slightly less sensitive area of app store operation, though even that business would involve some self-censorship to eliminate apps that Beijing might consider sensitive for political or other reasons. Read Full Post…

MEDIA: Rupert Murdoch Tip-Toes Back To China With Theme Park, Retail Plans

Bottom line: Rupert Murdoch’s shift in China strategy towards less controversial retail and entertainment projects looks smart, but is likely to meet with lukewarm success due to lack of awareness of 20th Century Fox among Chinese consumers.

Rupert Murdoch eyes China theme park

Rupert Murdoch just can’t seem to ignore the China story for too long, with new reports saying his Twenty-First Century Fox (Nasdaq: FOX) is finalizing plans for a theme park in a country that has been quite elusive for the aging media mogul. The theme park approach certainly looks safer than Murdoch’s previous attempts to enter China with more traditional media like TV and movies, and mirrors what some of the world’s other top media companies have done. Of course that means Murdoch and Fox are coming a bit late to this particular show, and the fact that 20th Century Fox theme parks aren’t exactly a well-known brand means his media empire could face a steep uphill ride finding a Chinese audience. Read Full Post…

MEDIA: Chinese Fire Wall Slams Down On Reuters

Bottom line: The latest blockage of Reuters sites in China is probably temporary and related to coverage during the recent National People’s Congress, but still reflects the very real risk of doing business in the tightly controlled media market.

Reuters websites blocked in China

China’s latest crackdown on foreign media has just netted global news giant Reuters (Toronto: RTR), in a potentially worrisome trend that has seen Chinese censors block a growing number of websites operated by big multinationals. Despite longer-term crackdowns on big names like Bloomberg and the New York Times, Reuters had managed to largely steer clear of China’s censors and its websites have remained largely accessible in China for most of the last 2 years.

But I couldn’t access any of Reuters sites in Shanghai starting last Thursday, and later reports confirmed the company’s Chinese- and English-language websites have been blocked throughout the country since then. (English article) Before I go any further, I should disclose that I previously worked at Reuters for a decade, and maintain contact with many of my former colleagues 4 years after leaving the company. Reuters Chinese site also is a regular user of my work, though apparently none of that has been viewable in China for the last few days. Read Full Post…