China’s video and music web site survey

My previous article on video can be found here:

http://chinese-net-gaming-stock.blogspot.com/2007/09/sohu-video-tv-stations-opened.html

On 1/21/2009, Analysys International published a survey on the most popular video and audio web sites for China』s internet café users. The article can be found here:

http://www.analysys.com.cn/web2007/ygfx_index.php/id_6167.html

The following plot list the market share of all the major video web sites for China』s internet café:

From the above plot, one can find the market share number for all the major web sites:

Todou: 46.8%

Youku: 44.3%

56: 10.2%

Ku6: 9.0%

QQ Video: 7.5%

Tencent Broadband: 5.1%

6: 4.2%

Youtube: 3.3%

Sina: 3.2%

Sohu: 2.1%

Analysys Internation also performed the survey for the most popular music web site frequented by China Internet Café users:

From the above chart, one can get the market share data for the major music web sites:

Bidu Music: 57.4%

QQ 163: 16.6%

Sogou Music: 12.8%

Gougou Music: 11.8%

From the above survey results, one can make some observations. For videos, it is basically a 2 horses race. Todou and Youko dominates. Tencent is coming on fast. Its two services (QQ video and Tencent broadband) together accounts for 12.6%. Since it is being pushed by its powerful QQ internet messaging service, there is no doubt its market share will keep on climbing.

Youtube is a non factor in China. China』s other portals, Sina and Sohu, are also non factors.

But I don't think China』s video war is over by any means. Running a video sharing web site is very costly business. At this point, no video web sites are making money. Given the global financial crisis, those non portal players are vulnerable for bleeding cash too fast. It will be interesting to see how this battle play out.

For the music business, Bidu dominate because it is the dominant search engine in China. Tencent is doing well because its can use its powerful QQ internet messaging service to push any services it wants. Sogou music search is strong because it has very good reputation among Chinese users.

Who won the Olympics?

My last Olympics related post can be found here:
http://chinese-net-gaming-stock.blogspot.com/2008/08/online-ads-outlook-from-fmcn.html

Now that Olympics is over, so who won?

Certainly, there are independent survey organizations in China that will survey the popularity of China’s portals. Yes, there are.

But there is too much information, it is virtually impossible to make anything out of it. In addition, every portal would use part of these surveys to justify why they are number 1.

The following two independent articles give pretty good summaries of the confusion involved:
http://big5.ce.cn/cysc/tech/07hlw/guonei/200808/26/t20080826_16615704.shtml
http://www.tianya.cn/new/publicforum/Content.asp?idWriter=0&Key=0&strItem=free&idArticle=1415731&flag=1

For qq.com (or Tencent), it quoted Alexa and Nelson rating to justify that they are the winner on China’s internet war during the Olympics. For Sina, it quotes Chinarank and CTR to say that it won. For Sohu, it quoted 8 different organizations’ (CNNIC, DCCI, iResearch, Analysys Internation, Tsinghai University, etc.) survey to justify that Sohu is the winner.

The following are articles from each portal to justify why she is the winner.

From Sina:
http://tech.2008.sina.com.cn/i/2008-08-25/10022411382.shtml
http://tech.2008.sina.com.cn/focus/2008_sina/index.shtml

From Sohu:
http://it.sohu.com/20080825/n259199132.shtml
http://it.sohu.com/s2008/aoyunbaodao/
http://it.sohu.com/20080826/n259209746.shtml
http://it.sohu.com/20080826/n259207979.shtml
http://it.sohu.com/20080810/n258719970.shtml

From Ntes
http://tech.163.com/08/0826/09/4K8VJII3000915BF.html

From Tencents:
http://tech.qq.com/a/20080825/000204.htm
http://2008.qq.com/zongjie.htm


It is so confusing that it is virtually impossible to say for certain who won. I went though these articles a couples of times each and still having trouble making much sense.

But if I have to make a judgment, I would have to give the following impression.

Tencent has the dominant instant messaging service, qq. It uses qq to push the Olympics news to its users regardless whether its users want it or not. If you include the information that is delivered to the users (whether it is solicited or not), QQ would definitely be the number 1.

But if you only count the web traffic that is initiated by the users themselves, then it seems Sohu has the upper hand. Most of the survey results seem to give a slight upper hand to Sohu with Sina be the number 2.

In addition, the top two (Sohu and Sina) have traffics that are significantly greater than the next two (qq.com and Ntes).

While I think the biggest winner is Sohu, Sina definitely benefited greatly from the Olympics as well.

Tencent is an up and coming threat. It is able to leverage its dominant position on the instant messaging service to push into the portals. Every Chinese netizen has a qq IM on his/her desktop. When a text bubble with interesting Olympics news comes up, it is so tempting for the user to click on it. When they do, they would go into Tencent’s portal.

Having a stand alone desktop application gives the company so much leverage, it is also the reason Sohu is sparing no expense in its next secret weapon, Sogou Chinese Pinyin Input system. (But that is another story for future date).

While Sohu, Sina, and QQ.com have similar look and feel for their portals, Ntes’ portal is very distinct. Much like McIntosh in the US, Ntes’ portal has a very loyal following. In addition, while Ntes portal used to cater to the second and third tier companies, during the Olympics, I noticed that there are a lot of ads from 1st tier multi-national corporations on Ntes portal.

News Coverage Race for the Great Earthquake

My previous article on advertising can be found here:

http://chinese-net-gaming-stock.blogspot.com/2008/03/statistics-from-dcci-on-chinas-online.html

There is a magnitude 8.7 earthquake in China on 5/12/2008. It occurs on 2:28pm China time.

May I offer my utmost sadness to the people in China and best wish to you all. But I want to use this opportunity to check out the portals’ performance and how they can react to fast moving news.

All four major portals have dedicated section on this disaster. They are listed below:

Tencent: http://news.qq.com/zt/2008/dizhen/

Netease: http://news.163.com/special/00012MS5/sichuan0512.html

Sohu: http://news.sohu.com/s2008/dizhen/

Sina: http://news.sina.com.cn/z/08earthquake/index.shtml

It is now 3:13pm China time on 5/13/2008. It is exactly one day after the quake occurs (give or take 30 minutes). I did a quick count on the number of articles and number of video clips on each portal. The result is listed in the following table:

	NTES	Tencent	SOHU	SINA
# of articles	340	372	760	850
# of video clips	15	108	108	61

From the above table, Sina has the most amounts of articles. Sohu is not far behind. Sohu and Tencents both have large amounts of video clips. In terms of numbers of articles, Sina and Sohu have more than twice as many news articles than NTES and Tencent. NTES is behind in securing video reporting. I am a little surprised that SINA’s video clips are only half of that of SOHU and Tencent.

Overall, I would say SOHU comes out on top, SINA comes in number two, Tencent comes in a strong number 3 while NTES is little disappointing.

SINA has the reputation as being the king of content in China. SOHU’s content department is really catching up fast.

Another point that can be observed from this study is that competition in China’s portals is fierce. I don’t think CNN or MSNBC or Yahoo would have this much information in such little time. Granted most (if not all) of the articles and video clips are sourced from third parties, but the amount of information is still tremendous.

Finally, it will be impossible for any TV stations in China to compete with China’s internet portals for the amount of information available.

This definitely points out the inevitable trend from TV, radio, or print to the internet.

Chinese Internet Pinyin Input system War Status

The last time I talked about this subject is all the way back in April 2007. The 2 parts article is as follows:

http://chinese-net-gaming-stock.blogspot.com/2007/04/sohu-sogou-gift-for-sogou-part-1.html

http://chinese-net-gaming-stock.blogspot.com/2007/04/sohu-sogou-gift-for-sogou-part-2.html

That was when Google got caught with their hands in the cookie jar. Sohu developed a Chinese Internet Input system called Sogou Pinyin. Google stole their technology and was caught.

At the time, I thought Sohu shall make a big deal out of it and even go to the length of suing.

Sohu did try to make a PR battle to milk their product.

But surprisingly, they didn’t push for Sogou search engine. They pushed the Sogou Pinyin system.

It seems they valued Sogou Pinyin system more than they valued Sogou Search engine. That really puzzled me.

First, we all know how much profit a great search engine can bring. Secondly, the Pinyin system is going to be free. There is no way Sohu can ever charge for it.

In addition, there is no way you can put ads on it. Users wouldn’t tolerate it.

Interestingly, both Google and Tencent seem to believe in this type of product.

Google Pinyin method is continually being worked on. Actually, Google is doubling their effort to coming out with patches and upgrade to make their product better.

Now, Tencent is going to come out with their QQ Pinyin soon. From the early reviews, it is clear that Tencent had spent a lot of effort to develop this product.

Sohu is continuing developing the Sogou Pinyin. They just came out with the version 3.0 final beta. The final version should be out any day.

The following is a link of a comparison review between the Sogou Pinyin v3 beta and QQ Pinyin Beta:

http://www.pcpop.com/doc/0/227/227439.shtml

The result is really not that surprising. QQ is an excellent product considering it is brand new. Actually, it is not even a version 1.0 product. But still, it is behind Sogou Pinyin in pretty much every aspects.

I can’t find any survey on this segment. But from anecdotal evidence, it seems it is a two headed horse race between Sogou and Google, with Sogou Pinyin (possibly significantly) ahead.

But QQ Pinyin could be a big threat to Sogou Pinyin. As the dominant instant messaging platform, QQ Pinyin could be on every computer in China by default.

For Sogou Pinyin to stay ahead, Sogou have to have functionalities significantly ahead of QQ Pinyin for average users to stick with Sogou.

Finally, why are all these big shot companies spending so much effort on a product that would never make any money?

I don't really know. But I can speculate...

First, it has some tangential benefit. A user might want to customize the Pinyin so it includes individualized characters (such as his or her name), his preferred skin, etc. To do that, the user has to get a Sohu user name and password. This Sohu user name can then used across all Sohu products (Sohu’s PC games, Sohu websites, etc.). Thus, it become easier to use other Sohu products. That is, the Pinyin method become a gateway for a new user to use Sohu's other products.

Since it is required (at least highly preferable) that users is connected to the internet, who is to say that the characters the users typed in are not being send back to a Sohu database. In addition, who is to say that these Pinyin system won't send where the users being back to a Sohu database (it might actually provide some useful functions to the users. As more information is sent back to the company's mainframe database, it allows for the predictive alogorithm to more accurately customize for that particular user. It might result in more accurate prediction of what the users might type later).

A database like that could be extremely useful to a company like Sohu because it gives them a snapshot of the behavior of the Chinese internet users. In addition, if they want to sell these information (as long as they don’t keep track of individual user’s behavior), I think it will be an extremely profitable business.

Again, the above is purely my speculation. This input system war reminded me of the browser war between Netscape and Microsoft back in the 90s. Microsoft won that war, but they never really monetize the Internet Explorer. It will be interesting to see who will be the winner of the Chinese input system war, whether the winner can monetize the product, and how can it be monetized?

China’s Internet Market Survey

On 9/17/2007 – China IntelliConsulting Corp (CIC) published the survey results based on users in three of China’s most important cities, Beijing, Shanghai, and Guangzong. The result speaks well for Sina and of course, Sina is all over this news.

The link is as follows:

http://tech.sina.com.cn/i/2007-09-17/13541744194.shtml

The result is more clearly shown in the following link:

http://tech.sina.com.cn/focus/2007search/index.shtml

For the search market,

9/2006 9/2007

	9/2006	9/2007
Baidu	61.9%	69.5%
Google	24.1%	23%
Yahoo	5.2%	2.3%
Sogou	3.2%	1.8%
Others	5.6%	3.4%

For the portals:

	3/2007	9/2007
Sina	34.5%	36.2%
sohu	26.1%	23.4%
Ntes	20.1%	17.7%
Yahoo	10.8%	8.8%
QQ.com	7.3%	7.5%

The following article gives the name recognition of the search engine

http://tech.sina.com.cn/i/2007-09-16/17321742430.shtml

Search Engine Name Recognition

	3/2007	9/2007
Baidu	81.7%	86%
Google	61.5%	67.1%
Yahoo	28.9%	23%
3721	3%	1%
Sogou	32.1%	27.1%
Soso	4.6%	5.2%
Sina	12.4%	10.1%
Ntes	4.1%	3.1%
MSN	1.5%	1.1%

First, the result gives a snapshot of the users preference for the three cities in the east coast. There maybe difference between the cities in the east coast and west coast. But more importantly, this survey doesn’t take into account of rural population.

In addition, some “independent” survey is not very independent at all. But I don’t know CIC and therefore can’t verify whether it is biased or not.

A quick summary:

For the search market:

Baidu is doing really well. Google went down from last year but went up from 6 months ago. All the smaller search engines are getting smaller.

For Sogou, it may have an extremely small market share (1.8%), but it does have a very large name recognition (27%). It may not be the 1^st choice for many users, but it is probably the 2^nd or 3^rd choice for a lot of users.

It strikes me that Baidu is really running away from the field. Google is a very distant second. Yahoo and Sohu’s Sogou may have a fighting chance to survive if the top two stumbles.

For the portals:

The result shows that Sina is increasing its distance from Sohu. The numbers for Sohu’s other properties (such as 17173, Focus, Chinaren, etc.) are included in Sohu’s number.

It is a little surprising in that Sohu had been pretty hot recently. Again, if rural population and west coast cities were included, Sohu won’t be fairing this badly. Sina had a reputation for users with higher education levels. Thus, it will have an inherent advantage for this survey.

But the trend is confusing as well. A possible reason could be that Sina had its blog, youtube, TV stations ready a good 6 to 9 months earlier than Sohu. Sohu just started these services and it hasn’t catch up to Sina’s head start yet. In addition, the effect of the Olympics hasn’t been felt yet.

In summary, Sina and Baidu have to be declared the winner at this point. Google is making a small comeback. But Google is not able to take market share away from Baidu. For Yahoo, it has to be disappointing in both Search engine and portal. For Sogou, it needs to keep on updating its technology and user friendliness. It still has an ace in his hand, the Olympics. For all other search engines, it maybe too late for them. Netease’s new search engine is still not out yet, but it may be a few years too late.

For the portals, Sina is sitting pretty. Its head start in coming out with blog, youtube, and TV stations, give it a competitive advantage. But Sohu has all of these now. In addition, Sohu seems to have an inside track on the Olympics. The game is not over by any means. Netease got to develop these web2.0 and video functions if its still want to stay in the game. China can support three major portals. Both Sina and Sohu are here to stay, if Netease screws up, then another will take its place.