By ?Robin
Li
Looking back at over a decade of progress, one may track and
break down the development of the Internet in China and Asia into
four major stages.
First came the portal phase – The earlier successful Internet
startups primarily served the public as Internet portals. Due to
the relatively limited level and diversity of online content, large
and comprehensive portals were the first wave caught by Internet
surfers. During this stage, both in terms of market impact and
visitor counts, the larger portals remained dominant. The major
players included Yahoo Japan, South Daum in South Korea and Sina in
China. And this trend was prevalent throughout the industry in
Asia.
Then came the games – The next rising commercial crest in the
market was driven by the developers and providers of online games.
Along with the ever-accelerating supply of and demand for
broadband, cyber games prevailed, and the industry concurrently
expanded with the advancing technology. Accordingly, a rising and
substantial number of online game providers captured their segment.
The major players included China's SNDA and NetEase, and South
Korea's NCsoft and Neowiz. During this phase, among all Internet
firms, cyber game developers and game operators realized the
highest profitability.
The third was the avatar. Exhibiting growth paralleling a
remarkable tidal surge in the number of Internet users, volume in
the trading of avatars grew steadily. It was during this stage that
those companies that based their business model on avatar promotion
were recognized by the market in a very big way. Strongly
representative of success in this realm are China's QQ, with 65
percent the firm's income derived from avatar trading, and Hangame,
which operates under the umbrella of South Korea's NHN.
Fourthly, search and e-commerce rose. Development trends in
Asian countries have channeled search and e-commerce firms to the
mainstream of the Internet market. A prime example is Naver of
South Korea. Beginning in 2002, Naver's traffic counts surpassed
the numbers of Daum to lead among South Korea's Internet industry
players. In 2005, Baidu bested Sina's stats in the China market,
and today Baidu is the world's largest Chinese-language web portal
operator. Not surprisingly, the rapid expansion in the number of
users has driven the rising popularization of Internet businesses.
A concurrently rapid development of e-commerce was
inevitable.
?
Although Asian nations may now be at varying stages of Internet
evolution, due to factors such as differing growth rates and
developmental level, generally speaking, their respective
industries will all follow a similar path.
Searching out e-commerce
In recent years, along with the development of e-commerce in
China, a high-profile group of high-performance e-commerce firms
has emerged. But due to varying factors, the application of
e-commerce in China, in scale and in depth, still lags in pace of
development – especially when one considers the enormous potential
of the Chinese market.
To understand why we consider e-commerce in China to be at the
early stages of development, consider a study on the scale of the
search market. In surveying the operative modes of diverse nations,
we see a mutual-dependence and a mutual-promotion relationship
between the families of search and e-commerce.
On the one hand, the development of e-commerce promotes demand
for the application of Internet business and increases the public's
reliance on the gathering of information with a preferred search
engine, and so the search market expands. In turn, search engines
serve as the prime facilitating portal for e-commerce, and as such
these tools are the prime driver in the development of e-commerce.
And so the scale of the search engine market serves as a barometer
useful in evaluating the development of e-commerce.
But in China, the present scale of pay-per-click search services
remains relatively minute. At only about one-tenth the volume of
Great Britain, the segment is very small in comparison with the
overall economic strength of China. From another perspective, this
also reflects the fact that the Chinese e-commerce market remains
at the very early stages. And these numbers also reveal the
enormous potential offered by the search market.
At the mainstream center of today's Internet industry, search
engines have become one of the most commonly used technologies in
the developed world, while offering enormous market opportunities
and the greatest developmental potentials in the IT field. Search
has thus become an arena in which some of the world's top IT
companies compete, obvious examples being Google, Microsoft, and
Yahoo.
?
Search Market share – break it down
According to the iResearch data which track the visitor counts
of search engines in China during the first three months of this
year, Baidu captured 66.7 percent of the market share, followed by
Google and Yahoo, the latter two collectively accounting for 24
percent. This, to some extent, reflects the competitive status of
China's search market.
Baidu is today the leading web portal operation in the eastern
hemisphere, and, quite clearly, its rapid growth has impressed the
capital market. The market value of Baidu is now about US$11
billion, and the firm's daily stock trading volume averages US$1.8
billion. Both indexes rank Baidu as the first among hi-tech
companies in China. Needless to say, Baidu has become one of the
most watched Internet firms in the world.
?
Citizen systems – links and learning
Concurrent with the development of the Internet, and especially
with the dramatic rise in the search engine segment, the capability
of the Chinese public to obtain information has reached an
unprecedented level. Search engines offer efficient delivery of
information while enabling that information to be rapidly and
effectively shared. Accordingly, China's netizens are exhibiting a
dramatic and rapidly rising enthusiasm for publishing information
on the web.
Seven years ago, when Baidu first introduced its search engine,
only 5 million Chinese web pages were indexed, accounting for a
mere 2 percent of global cyber information.
Today, the number of web pages published in China exceeds 4.5
billion, amounting to 20 percent of the world's volume. The power
and influence of this rapidly accessible Chinese-language content
is undeniable. Data volume, content quality, and information
delivery systems continue to expand and improve, while the citizens
of China continue to learn at a pace like never before in
history.
One might say that the facilitation of this growing
enlightenment and sophistication is the most important result
delivered by the search engine.
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Profile of Robin Li
Board Chairman and Chief Executive Officer,
Baidu.com.
Li has a bachelor's of science degree in Information Management
from Peking University, received master's of science degree in
Computer Science from the State University of New York at Buffalo.
As one of the earliest Internet technology researchers, Robin Li is
the initiator of ESP technology, and successfully used it in
INFOSEEK/GO.COM search engine. Another of his important innovative
achievement is the picture search of GO.COM. In 1999, Robin Li
founded Baidu, which was listed in NASDAQ in August 2005.
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(China.org.cn November 26, 2007)