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The purpose of this blog is for my personal use. It serves as my personal diary as I investigate Chinese internet/gaming companies for investment purpose. If you have any comments or disagreement, please give me feedbacks.

Sunday, August 25, 2013

China's Mobile Internet Messaging (IM) War, part 6, Netease's YiChat Update

China's Mobile IM is white hot right now. But the development of cooperation between Netease and China Telecomm represents something even bigger. This development had captivated the attention of China (even for those who have no intention of ever using mobile IM).

Part 5 of this series can be found here:

YiChat is for real!

Both China Telecom and Netease are devoting true and significant resources on YiChat. It is clear that, from the amount of new customers, the freebies from China Telecom is not going to be just from spare capacity. China Telecom is taking up real resources to give YiChat users free Short Messaging Services, free Mobile Bandwidth, etc.

For Netease, its technical excellence is shining through.

After the first day of YiChat, there are signicant complaints from Chinese users. The two biggest complaints are people can't register and SMS messages take a long time to deliver.

It is clear it is largely a capacity problem. Netease and China Telecom didn't anticipate the amount of user adoption.

The biggest YiChat tester is none other than CEO of Netease itself:

From the following images, it is clear the CEO of Netease is testing the YiChat:

Above is Netease CEO's YiChat account. Where he is doing his accounting of his YiChat usage experience. "Too many people, we were not prepared...". "Machine crashed..." A big Yellow "SORRY" sign with an emoticon show he kneel down on all four begging for forgiveness. "Emergency Capacity expansion."

One can follow his account. It is easy to see he is testing YiChat's service all day and all night.

Netease's CEO is a serious person. He is an engineer by heart and can be obnoxious toward people in finance or budgeting. For him to use that emoticon to apologize to YiChat users. Even though it is through an emoticon, it is clear he felt a little humiliated and he is putting his personal prestige in this product.

Netease's vaulted technical team are doing double or triple shift. Within 3 days of launching the product, 3 updates had been generated to eliminate all the software bugs that came up. See the following images:

As of Friday (4 days after the launch), YiChat had already gone from v1.0 to v1.0.1 to v1.0.2 to 1.0.3. With each version update, significant bugs had been squashed.

At this point, it is clear that YiChat is real. Both China Telecom and Netease are sparing no resource for it.

China Telecom is devoting whatever resource to give Chinese users free stuff while Netease's technical team is delivered its end of bargain.

Netease's CEO can be hard to get alone with (he used to like to snicker at Wall Street analysts). But he is an engineer in nature and he build his company devoted to be excellent in engineering. I always thought Netease is number 1 by far in excellence in engineering in China's internet sector. So far, Netease is delivering.

Finally, this story had create something more than just YiChat alone. This thing had create a life of its own. The story had becomes whether a new model had been created. A model that one day may breaks down China's state dominated market economic system.

This story had just becoming a lot more interesting than just China's Mobile IM market.


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