China IT Review

Half year after Sogou’s Cloud Input, Baidu (NASDAQ:BIDU) and Tencent (HKG:0700) are going to provide Cloud Input Method to their users.

Talking About IME

Different from the Lartin languages, typing Chinese on a computer requires an IME. Because there’s no Chinese word on the keyboard.

There’s a long history about Chinese IMEs but Sogou Pinyin was the 1st one who broke the rule and combined IME with Internet. After Sogou Pinyin, Google China relased Google Pinyin, as a competitive product.

The war of IME also started on mobile devices. However, now, Cloud may become the next battlefield.

Baidu’s IME for Search Box

Baidu’s Cloud Input is still in alpha version and only Baidu staff can access. Form the leaking out screenshots, Baidu’s new Cloud IME is an option in the Preference Settings page.

I think this can be an enhancement for Baidu’s Search. With this IME, Baidu can know better about what the user really want, especially for those lazy users who type pinyin directly in the search box. So far, there’s no idea about whether other products are taking advantage of Baidu’s cloud IME.

Tencent’s IME as a common tool

Comparing with Baidu’s new IME, the Tencent’s is more likely to be a cloud IME that can work on any web page which contains a input area.

What’s more, Tencent’s IME also works well on senior mobile devices.

While more and more client applications became web applications, IMEs followed the same trend. For cloud IMEs, only an interface is not enough, the power of data learning is more important for these IME service providers.

On Apirl 28th, 2010, Baidu (NASDAQ:BIDU) announced the Q1 2010 earnings. The revenue shocked experts, and Baidu’s shares soared 14 percent after the bell.

Baidu switched their customers to a new AD platform called Phoenix Nest (Feng Chao) in 2009. And now, the strong revenue growth, proved that Phoenix Nest is a more powerful tool. From the mass observer’s point of view, Phoenix Nest is totally nothing new but changed the display form of ADs. However, in deep, the new platform allows competitive terms as Google does.

Once the competitive terms can be bid, I’m pretty sure the term price will grow higher and higher. This explains why Baidu’s revenue has improved so much, while Baidu has been weak in Q1 in so many years.

Recently been found, image-ads appeared in Baidu Image Search results. While other search engines (like Google) still put text-ads on top of  Image Search result. Check out the snaps below:

When search “长城” in Baidu Image Search, the result may contain ads about tour of the Greate Wall (“长城” means great wall, in English). From my perspective, I think this type of ads is fairly intuitive, however, I don’t know whether the ROI is higher than those normal text link ads.

As a comparison, I’d like to take a snap from Google.

Well, Baidu is exploring various forms of advertising, in order to raise the income. And placing image ads in image search results, is a really great idea.

It’s about Alipay again .

Today, Alibaba announced that, the Alibaba Group will invest 5 Billion RMB to Alipay. This is a long-time-investment which will last for 5 years.

Notice that Alibaba Group is not the company named Alibaba.com Limited (HKG:1688), but the mother company of it. Alibaba Group is also the mother company of Taobao and Alipay. However, Alibaba Group has also invested Taobao 5 billion on 2008.

Nowadays, Alipay is the leading company in the 3rd payment service field, and holds nearly 50% market share. So I don’t think this huge investment is for Alipay to expand in China, but to speed up the internationalization process in the world. It’s opponent is now Paypal.

There’s one thing I still wonder: where’s comes the money? From the financial report, Alibaba.com Limited, the most profitable subsidiary of Alibaba Group, earns about 1 billion through a year. Whereas, Alibaba Group is to invest 5 Billion in 5 years. Where can Jack Ma get so much money from?

There’s always big news about Alibaba and its subsidiaries, today is about Alipay.

Gossip from Twitter said that, Alipay is going to acquire a bank. Considering another news about Alibaba’s financing 100 Million via PricewaterhouseCoopers, the news about Alipay is worthy of belief.

Here goes the reason: The bank regulators in China, is launching a new  platform for cross-bank transactions. And those 3rd party payment companies such as Alipay, TenPay, BaiduPay, etc, may not able to take advantage of this platform. Once Alipay acquried a bank, it can easily plugged onto the new platform.

However, It’s just a gossip.

I wounder how many percent of Taobao’s users, would like begin their shopping from the mass category list on the homepage. But recently, I’ve found the category list is having something new. Here’s the screenshot:

As languages differs, I’d explain in brief. Taobao adds a Category named “Digital Entertainment” at the top of the category list. This new category contains links about hot Videos, different types of digital magazines, but nothing about goods.

When Taobao Video (Actually, it is based on joy.cn, which is a poor video company in China) came out, experts surprised. However, once take a look at other new services of Taobao, like DaTing(not dating), digital magazines, etc, they may not be surprise any longer. For one thing, as is the biggest trading platform in China, Taobao cannot get an explosion increase on its market share. For the other thing, it it hard to meet the expectations of investors if Taobao is just a trading platform.

For Taobao, free or not is no longer a problem. Taobao is profiting from multi types of advertisements. This made taobao became simmliar with Baidu (NSDQ:BIDU), and also make taobao became a media platform. The users and the traffic came with users, are the most valuable asset of the platform. This explains why Taobao is introducing new products which are not firmly related with ‘trading’. Taobao also advertises on TV, which is proved effective. The alexa rank of Taobao is now higher than two of the three largest portal website in China: Sohu and NetEase.

Where to IPO, is a new problem for Taobao. It cannot be HongKong: Alibaba(HKG:1688) is a bad sample, it IPOs at HKD 14 and after 2 years raised to HKD 18. NSDQ is a better choice, but EBay, Taobao’s sample, is going down these years. Taobao needs to make some difference to claim it’s not another EBay.

BTW, the noun “Media Platform” is not clearly defined yet.

Yesterday, Sogou released an IME called “Sogou Cloud IME“. However, sogou innovatively took advantage of Javascript, and produced a IME that can run in browser. As it runs in browser, it becomes a cross-platform IME — All the operating systems with a browser, can use this cloud IME.

Sogou is the leader on Pinyin IME field since 2006. Google.cn has also released a pinyin IME short after Sogou Pinyin, but was found plagiarized Sogou Pinyin’s thesaurus. Sogou is a subsidiary of Sohu.com(NASDAQ:SOHU), and focuses on search engine. However, its IME is much better than its search engine.

This is the 1st hand news from ChinaItBlog. Alipay, the biggest online payment platform in China, is experiencing site downtime on Thursday Afternoon. It’s an accident caused by a careless deployment.

Alipay is considered as  “The Paypal of China”, and processes over 1 billion RMB trading everyday . This sudden maintenance has also affected taobao. The users of taobao, are not able to pay for transactions they’ve created.

Alipay said it would be back in an hour, in its annoucement.

Today, with the release of Q3 financial report, Baidu (NASDAQ:BIDU) annouced that it will close the old bid ranking service, and migrate the customer to new system called “Feng Chao“. Feng Chao is a new marketing tool that developed by baidu, to replace the bid ranking service, it went public on Apirl 20th, 2009.

And the bid ranking service, which was the most profitable one, and which supported Baidu’s eight years of rapid growing, will be finally closed in December, 2009. However, Baidu has also lowered profit forecast in the financial report, which lead its share price drop.

“About 70% of our customers are now taking advantage with Feng Chao, so it’s the right time to migrate all customers to the new platform”, said Robin Li, CEO of Baidu. It is no less than a phoenix‘s nirvana of Baidu; and in Chinese, “Feng Chao” means “the nest of phoenix”.

Best wishes.

Last week, Taobao, the largest personal online trading platform in China, the second biggest subsidiary of Alibaba (HKG:1688), has launched a standalone search engine with a subdomain search.taobao.com.

As a large trading platform, Taobao manages tons of information of products.  As a open platform, Taobao has a strong desire to label all e-commerce websites “powered by Taobao”. Actually, this is the blueprint that called “Big Taobao”.

Thus, a search engine for “Big Taobao” is required.

However, this new search engine is no more than a alpha version. For one thing, the domain “search.taobao.com” is quite funny: the first section is a English word “search”, but the second section is pinyin “taobao”. This is really hard for those primary users in China. For the other thing, taobao’s lack of tech hurts the result. “Taobao’s search even don’t know word segmentation”,  said a Baidu’s Senior Engineer.