The Chinese government seeks a harmonious society. But it’s Facebook’s social games that are cooperative, while China’s closer resemble the Ultimate Fighting Championships. Of China’s top 10 social games, 9 feature competitive actions that hurt other players (see graphic); the one exception is Renren Restaurant, an exact copy of Playfish’s Restaurant City on Facebook. Of Facebook’s top 10 games, only 1 features competitive actions. Chinese players cherish intense competition.

The post has more details on the game actions, which include enslaving and humiliating friends, bombs in the hospital, and looting at the farm.

Mischief Accomplished: worms added to friend's farm

Why all the Schadenfreude, Stealing, and Status?

Three speculations as to why Chinese games are more competitive.

1) Chinese Education System

Are Chinese children hard-wired for competition at a young age? Do Chinese become accustomed, even fond, of the tools required to succeed in a hyper-competitive education system? Are social games a lifelong detox from the gaokao?

2) Culture

Though ambiguous and slippery, culture is often cited as a source of societal differences (and even geopolitics, in Samuel Huntington’s Clash of the Civilizations) But real-life crime rates, including theft, are not notably higher appear in China (though harsher punishments and lackadaisical reporting muddle the issue). So why should they be in social games? Luxury goods, booming in China, help make the case that status is especially important in Chinese culture.

Nasty actions in the Wonder Hospital game

3) Specific to Social Games

Perhaps Chinese are more apt to add “friends” on social networks, even if there’s no close personal relationship. That could lead to fewer reservations about stealing from your “friends.” China’s prolific online friendships are evidenced by the finding that Chinese have more online than offline friends. Or perhaps Chinese netizens simply have a better sense of humor than Westerners when it comes to the value of virtual goods.

The new China Social Games Blog

China Social Games is a blog dedicated to tracking the hottest games, networks, and trends. Though already wildly popular in China (and on Facebook), social gaming is still in its infancy. Games are just starting to become truly social, so the China market is evolving, innovative, and yes, extremely competitive. China Social Games offer up-to-the-minute coverage as the market grows, consolidates, and Western players enter.

Our latest guest posts:

• TechCrunch: China To Police Social Games
• VentureBeat: China’s growing addiction: online farming games
• VentureBeat: The year it exploded: 10 hottest Chinese social games of 2009

China Social Games is brought to you by the BloggerInsight team, regular contributors to CNReviews. Follow @CNsocialgames on Twitter.

Hello there!

Teenagers are apt to experiment, and the Chinese are no exception. iPartment, or “love apartment” (爱情公寓) in Chinese, creates an online home that appeals to young, affluent women (about 60% of the site’s users are female). “The logic is [as] straightforward as ‘Boys like girls, girls like iPartment,” they write at The Little Red Book. If boy wants girl, he had better signup for iPartment, and not forget to water the virtual flowers and feed the virtual dog!

The ultimate experiment in digital love is for boy and girl to move into a virtual apartment together. Shanghai University student Gao Yi, 23, wistfully told China Daily: ”If the relationship with my boyfriend (on iPartment) deepens, I might go out and see him someday.” But if Gao Yi never goes to see him? Irrespective of their real lives, iPartment aims to make young women (and their suitors) feel at home, online.

From a loner in a naked room to a fly guy in a love pad, complete with lady, dog, and stylin’ pink pants. Virtually living the dream.

Are Ladies Luring in the Men?

iPartments are a hot digital property. In 2003, iPartment was launched in Taiwan where it has 1.8 million users. In 2004, iPartment entered the mainland where it now boasts over 20 million registered users.

Moreover, the ladies are certainly luring in the men in suits, the investors. A first round came in 2005 from IDT (Acer Capital), a second round of about USD 3 million in 2006 from Japanese firms JAIC and Cyber Agent Company, and a third round of USD 8.5 million in 2007 from a Singaporean investor. The company is targeting an A-shares or Hong Kong listing in one to two years. The “Ladies First” strategy is working like a charm.

Girls Just Want to Have Fun!

The main attraction is the decoration of a “love apartment” and the search for someone to share it with. But girls like accessories too and iPartment boasts a number of accessory features: pets, diaries, gardens, and games (like Parking Wars and Friends for Sale!) These simple SNS games are already ubiquitous across the Chinese internet, but one iPartment rep comments, “it’s like knowing one nasty character and one dear friend. With the former, even a feast might be disagreeable. But with the latter, sharing just an apple would be indescribably marvelous.” Cheers to like-minded communities.

Funny-looking little ones? 0.8 RMB a piece. Avatar (dress, shoes, haircut)? 4.6 RMB. Garden background? 5.7 RMB. Flower bouquet? 10 RMB. Online love? Priceless.

SHOW ME THE MONEY!

Monetization is the existential question for SNS today. Fortunately, iPartment is better positioned than most. The company is already profitable, a rarity amongst SNS, with revenue of $3 million in revenue for 2008 and an expected $10 million for 2009.

On the Chinese mainland site, 80% of revenues come from advertising. Leading brands also lust over iPartment ladies: Dior, L’Oreal, Estée  Lauder, Avon, Nivea, and Lancôme all want a piece. Advertising ranges from traditional banner ads and sponsored sections to in-game items and promotions (e.g., Starbucks promoting a new store opening). Starbucks, Adidas, Samsung, Aupres, Acer, HP, and Nescafé also all have stores on the “iPartment block.”

The remaining 20% of revenues come from micropayments & memberships. With VIP membership (10 RMB or 1.50 USD per month) a user has access to free and exclusive items and is featured in search results. For example, the site has piggybacked on the explosion of farming games  (see our coming BloggerInsight post) with a flower garden. Ordinary members: 3 flowers per day. VIP members: 6 per day!

An iPartment rep comments, “[the daily watering and harvest] creates a form of dependence. Our flower garden’s most vigorous user has already surpassed 16,514 virtual flowers—you can imagine our users’ enthusiasm!” Micropayments are testament to the site’s addictiveness: “water your flowers everyday lest they wilt.”

Nothing says “I Love You” like a bunch of virtual flowers. Price: 10 I-dollars (10 RMB = 1.50 USD), but free for VIP members!

Virtual Property for Real Money

On the Taiwanese site, the revenue sources are flipped: 80% comes from micropayments & memberships, 20% from advertising. Users are younger and richer, and the site offers more premium items. The Chinese mainland iPartment is focused on growing its 20+ million userbase (already more than 10x Taiwan), but “virtual property for real money” is clearly the model of the future.

World Domination?

Can iPartment conquer the world? Chinese SNS game developers are eyeing the Facebook market, where “FarmVille” has followed in the footsteps of the Chinese game “Happy Farm” and exploded in popularity (see our coming BloggerInsight post).

But the cultural translation challenges are much higher for an SNS platform than for a game. iPartment captures a certain Chinese lifestyle that might not fly elsewhere: “Honey, did you feed the online dog?” sounds like a tedious demand of Western internet users, even if pet food is but a click (and micropayment) away. A potential expansion to Japan was once reported in the media, but that is no longer in the immediate plans according to iPartment. For now, China’s 1.3 billion potential tenants will have to suffice.

Contributed by Kai Lukoff & Ying Xue.

Kaifu Lee "running away" from Google. Source: YNET

On Saturday, Google China President Kaifu Lee resigned. On Sunday, CNReviews tracked the news on his next step, Innovation Works, an early-stage investment fund and startup incubator. To track the Chinese blogosphere, BloggerInsight asked Chinese bloggers for responses to three questions:

Q1 : Why did Kaifu Lee resign from Google China?

There was early speculation that government politics led to his resignation (which Kaifu Lee has adamantly dismissed), but internal Google politics do seem to have played a role. Remaining at Google China meant enduring continual corporate pressure and cultural conflict. Google didn’t offer him the freedom to grow Chinese entrepreneurship as he envisions it.

Blogger comments:

“Because of the suffocating constraints of a large company, Kaifu Lee was not free to localize Google into China. He was likely a mere figurehead, unable to capitalize upon his abilities or realize his dreams.”

“To outsiders it looks like Kaifu Lee lived the high life as Google China President, but there must have been hardships that we cannot imagine. He mentioned his entrepreneurial aspirations as early as August 2008, but had to shelve them because of the financial crisis. While sick in the hospital this June, he became determined to make his move into entrepreneurship.”

Q2: How will Kaifu Lee’s resignation impact Google China?

Opinions are mixed on how Kaifu Lee’s resignation will impact Google China. While his efforts led Google market share to double (from 16.1% in 2006 to 31% at present), the consensus is that Google still has a long way to go in China.

Blogger comments:

“With the loss of a man of Kaifu Lee’s character and vision, there will certainly be a slight change at Google China. It’s uncertain if his successor will be able to localize Google’s products as well, a key determinant of the company’s success in China.”

“[Kaifu Lee’s resignation] will not have much influence on the competitive balance between Google and Baidu. With its extensive coverage online and in the traditional media, it may even bring Google extra traffic!”

Q3: What can we expect from Innovation Works

Chinese bloggers’ expectations are tempered by realism. Angel investing is in its infancy in China, so it will likely take at least ten years to reach success. Finding a model to identify, assist, and profit alongside Chinese innovators will take time.

Yet that doesn’t stop bloggers from having lofty dreams for what Innovation Works could incubate—if not the next Google, then something close. And if anyone is up to the task, it’s Kaifu Lee. With his extensive R&D background in China, Kaifu Lee has a deep understanding of how to nurture innovation. Perhaps his strongest asset at Innovation Works will be his personal charisma and ability to connect budding entrepreneurs: the next Larry and Sergei with Eric, or Bill Gates with Steve Ballmer.

Blogger comments:

“The primary challenge will be how to screen people. With the domestic education system as it is and the underdevelopment of creativity, Kaifu Lee with have plenty to ponder.”

“Success at Innovation Works will not come easily or quickly. The first concern is that VCs are well-established, so Kaifu Lee will have to convince the market that his model is also viable. The second challenge will be managing relationships. Will young Chinese entrepreneurs embrace his model? How will they share profits? Will entrepreneurs submit to management from Innovation Works, and if so, in what format?”

“The first hope is that he will incubate companies of Google’s caliber with Chinese characteristics. This may just be a dream of course, but it’s a dream shared by all of China’s technology industry.”

Contributed by Kai Lukoff & Ying Xue.

The fact is that Chinese users approach online social networking differently than Western users. In order to stand a chance against local competitors, foreign social networking companies should take the time to understand these differences and adapt their sites appropriately. Here at BloggerInsight, we tapped the knowledge of our expert network and identified four key characteristics that distinguish Chinese SNS users.

(1) It’s all about entertainment – Chinese users rely on online social networking sites as their primary source of cheap, quick, and accessible entertainment throughout the week. As a result, online social networks are used less for practical communication and more for killing time and amusement—whether it’s playing a quick game at work or chatting with other users after school. Take ‘Parking Wars‘ for example – one of today’s hottest games on Chinese social networking sites, especially among white-collar workers. Users earn virtual cash for parking on their friend’s lots and for ticketing their friends when they park “illegally”. After earning enough money, users can buy more expensive cars. Millions of white collar professionals are hooked; many check their Xiaonei or 51.com profiles several times each day to update their parking status. And why? For fun, of course. After all, that is the primary motivation of Chinese netizens when logging onto a SNS.

Chinese netizens are addicted to Parking Wars, a game that allows users to earn virtual currency and upgrade their car model. Entertaining games like this one keep users actively engaged on Chinese social networking sites.

(2) Higher tolerance for intrusiveness – While Western users are often sensitive to “clutter” around their social networking profiles (remember the initial backlash against Facebook’s flurry of new applications?), Chinese users dig the extras that come with social networking platforms. Viral games, contests, forum discussions, and other add-ons drive traffic because young Chinese netizens don’t hesitate to send message after message to friends, inviting them to get involved on social networking platforms. For instance, on a site called QQ Show, developed by China’s SNS giant Tencent, users dress up their avatars and compete in virtual fashion shows. Teens will IM their friends fervently, asking for votes on QQ Show. And while some of us are tempted to label this as “spam,” it’s just another way for Chinese SNS users to engage and interact with each other. As you can imagine, these SNS applications are huge in creating user stickiness and encouraging users to repeatedly visit the site.

Teen netizens use QQ Show to show off their dressed-up avatars and compete in virtual fashion shows. Winning competitions requires votes from friends, introducing a viral component to the QQ platform.

(3) SNS as a public space – Many Western users see social networking sites as an extension of their real-life relationships, and their online social circles often reflect this perspective. Chinese users, on the other hand, are more likely to add strangers via the Internet and generally accept most friend invitations. And instead of keeping online conversations within their own networks, Chinese netizens gravitate toward bulletin board systems (BBS) to express themselves and participate in completely public discussions. As one of our bloggers notes, “privacy is not as important as interesting conversation.”

(4) Building an online identity – Young Chinese netizens view their SNS profiles as representations of themselves to the world, establishments of self territory outside of their parents’ and schools’ oversight. For them, social networking is about standing out and building a reputation in an online world. Local social networking sites do a great job of catering to this need for self-expression. For instance, on QQ – China’s largest social networking portal in terms of user base – users make micro-payments of 1-5 rmb to customize their profiles by purchasing virtual goods, such as accessories, clothing, and new hairstyles. In fact, this handy feature generated a large portion of QQ’s revenue last year.

One of many QQ virtual stores where users can purchase clothing and accessories for their avatar using QQ coins.

So despite foreign efforts to “figure out” the much-discussed Chinese market, local social networking sites are simply cooler and more entertaining to the country’s netizens. Companies need to realize that the cut, translate, and paste strategy will never work for a unique market with its own preferences and idiosyncrasies. New features need to be added, and entire websites need to be tailored and adapted to suit Chinese netizens.

Some additional questions to consider (and we would love to hear your thoughts):

1. Are there any foreign social networking sites that are on the right track to tapping the Chinese market?
2. What will it take for foreign SNS to snag and keep users from QQ, Xiaonei, and other domestic giants?

Contributed by Mindy Zhang from BloggerInsight

Can Apple stay fresh with Chinese consumers?

We’ve all seen young professionals on Shanghai Metro trains, tapping away at  a game of Solitaire on their new iPhones. The iPhone has transformed into a global phenomenon, and China is no exception. Its sleek design, innovative touch-screen, and ability to support thousands of applications have generated over 20 million units in global sales since its original release in 2007. Although the device hasn’t officially launched in China, trend-conscious consumers flock to electronics markets to purchase imported (but completely unauthorized) iPhones from vendors.

For a while now, Apple has been eying the Chinese market, home to the largest population of mobile phone users in the world. But Apple being Apple, making sales requires an exclusive, tightly controlled contract with one of the country’s leading mobile service providers. For the past couple years, Apple has been flirting on and off with China Mobile – the largest provider with over 415 million subscribers – alas, to no avail. Despite the immense opportunity that China Mobile would’ve provided, a battle of egos resulted in both companies backing out of the potential deal.

There have been rumors of recent talks with China Unicom, China’s second largest mobile provider with a less impressive 130 million subscribers. Experts speculate that the two companies have settled on a three-year deal to bring legit iPhones into China, although no public statements have been made by Apple or China Unicom.

An iPhone with simplified Chinese characters, posted by Sina. Apple and China Unicom have yet to announce a finalized deal around iPhone distribution.

Apple’s modern design and well-guarded brand image has certainly made an impression on the Chinese consumers, and there are already an estimated 2 million black market iPhones in the country. Chinese users are willing to go through the hassle of unlocking the phone, purchasing a flurry of adapters and accessories, and suffering malfunctions and technical problems with no warranty – all to possess one of the most stylish new devices. If the authorized iPhone is a hit, China Unicom could benefit from a boost in customers. Chinese consumers use pre-paid cards instead of signing a one- to two-year contract with mobile service providers, so the cost of switching between providers is minimal. China Unicom would ideally use the iPhone as an incentive to snag some of China Mobile’s most valuable customers. Additionally, China’s expanding middle class will generate new demand for affordable luxuries; the China State Information Center estimates that by 2010, 25% of the Chinese population will earn above 50,000 rmb in annual income.

Despite being a coveted brand in a growing market, Apple still faces potential challenges in launching a legitimate version of the iPhone. While China Unicom is planning to subsidize the devices for mobile subscribers, cheaper copycats continue to exist on the market, satisfying demand from the lower end of iPhone aspirants. And in addition to these fakes, electronics vendors are still bringing in unauthorized iPhones and selling them without the burden of import tariffs; some price-sensitive consumers might decide that a lower price justifies the extra hassle. Despite these cheaper alternatives, would enough upper-middle class Chinese consumers be willing to purchase iPhones through legitimate channels? Even if the demand exists, Apple will need to deal with its relative lack of control over distribution.

Furthermore, much of Apple’s success comes from its App Store, where 1.5 billion applications have already been downloaded. Most of these applications range from 1 to 10 USD. In China, users of unauthorized iPhones have downloaded free applications from various websites and bulletin board systems (BBS).  Would Chinese consumers be willing to pay for these applications? Seems like developers would have to charge a much lower price for Chinese versions of their applications.

And finally, there’s the brewing battle between the Apple and Google for presence in the Chinese market. In response to Apple’s contract with China Unicom, Google announced that it would launch two Android-based devices through a partnership with China Mobile. Google’s earlier entry could dampen Apple’s efforts if Android steals potential market share from the iPhone, which is scheduled to debut sometime within the next year.

Contributed by Mindy Zhang from BloggerInsight

Jimdo started as a group of three friends selling basic site creation tools for businesses. The site’s innovative array of creation tools has since developed into a consumer version available in seven different languages (English, Chinese, Japanese, German, French, Italian, Spanish and Russian). Jimdo hosts JimdoFree sites with “dot Jimdo” URL addresses, limited storage and integrated ads. JimdoPro, the premium version, allows users to host their own pages with more storage and no ads.

Almost immediately after launching, Jimdo brought it’s Pages to China by way of George Godula, who attended university with one of the company’s founders. Seeing the huge potential of the site for China’s small companies–most of which do not have a Web presence–George and Web2Asia, a market entry consultancy firm he runs out of Shanghai, jumped at the opportunity to fill the gap in the market. There were over 31.5 million small companies in Mainland China in 2006. Reports indicate that the total number of small to medium sized enterprises will reach 50 million by 2012. Currently, around 70-80% of these small companies do not have a corporate website, with high costs being the main inhibitor for them to be online: fees range from 2,000 – 10,000 RMB. Small companies also lack the resources to have professional technicians for the maintenance of their sites. Clearly there was a great demand for easy, inexpensive, DIY site creators in China.

In just two years, Jimdo has been used to create over 100,000 personal and business sites in China. Jimdo was instrumental in expanding the reach of businesses and in providing a means by which people in China can connect with more people. Check out the site of this 70-year-old retired teacher, who despite not being able to pronounce Jimdo is one of its biggest fans.

JimdoPro landing page

Coming to China was not without difficulties and setbacks. Jimdo competes with large Chinese players like Sina and Sohu in the personal space/blogging market. Stiff competition also comes from other DIY site creators, with the biggest being state-owned and backed NET.cn. According to George, a key lesson in localization for Jimdo was to “prepare for a much longer timeframe than for other countries.” As such, it was imperative to manage the expectations of headquarters in Germany: ROI will take time. Taking the local situation and preferences into account, the China team found that scaling Jimdo required targeting the business community. Unlike Europe, where private users tend to spend more money for their personal websites, it is much different in China where free options for websites are plentiful. People were not interested in paying for JimdoPro pages. For small businesses, however, there was great appeal in affordable professional-looking websites that were easy to set up and maintain.

The company is now undergoing a total shift in strategy, targeting businesses more because Jimdo offers a low priced solution for this market. Jimdo gets businesses on board with its new landing page which includes video on the features and benefits of the product. It also beefed up its marketing efforts in three key channels: 1) paid keywords on search engines, 2) affiliate and resesller program and 3) BBS marketing and online PR.

“Content management was one of the hardest lessons learned,” says Sam Fan, Jimdo Country Manager in China. The Chinese government’s censors blocked the site for three weeks in its first few weeks of operation because content deemed inappropriate and vulgar was found on Jimdo-hosted sites. Jimdo is now vigilant about user content control, putting filters in place to swap out controversial words.

The team at Jimdo China continues to localize and tweak the product for the Chinese market. With the help of BloggerInsight and its network of expert techies, Jimdo was able to pinpoint exactly what needed to be changed for local users.  For example, while the current design templates were positively received, Chinese users did not like the fact that they were pre‐populated with content that they had to delete before personalizing it themselves. This problem will be remedied soon.

Jimdo user interface

Jimdo China’s still got much to do. In the pipeline are plans to implement more features to make the site more business-focused, encouraging even more of China’s small enterprises to build their web presence through Jimdo. There will also be improvements to user experience such as web-based restore points for backing up content. Expansion in Asia continued with a successful launch in Japan through KDDI Web Communications, a subsidiary of Japan’s second largest telecommunication corporation KDDI. The Japan deal is Jimdo’s first with a publicly traded company. More Asian countries are in the works.

Even new start ups can go global and bring their product to China. If you have the right technology and the right niche, making the move to China might be a good idea. Of course, you need to have have your eyes and ears on the ground to get a good idea of the market realities; Jimdo’s got the right idea with support from headquarters in Germany and its team in Shanghai.

Contributions by @MikeFung and Ying Xue

Enter co-working. Co-working is working independently with the added of advantage of possible synergy that can take place when you put innovative and talented people together in the same room. These people share one big office space with perks not available at the coffee joint or at home, such as conference rooms and opportunities for networking and socializing. Co-working sites generally charge daily and monthly rental rates per workstation.

This new trend in working started in 2005 in San Francisco where an inventor and open-source software developer coined the term “co-working.” BarCamp, another trend in the era of Web 2.0, also lent inspiration to the current co-working model. BarCamps are user-generated conferences, organized around a shared interest, where participants bounce ideas off one another. Wouldn’t it be great if going to the office was like going to BarCamp everyday?

From San Francisco, the work model came to Shanghai as an increasing number of intrepid entrepreneurs and independents look to do their own thing rather than pursue careers with large multinationals and state-owned enterprises. According to official figures in the annual employment report, since 2002 the number of freelancers in Shanghai doubled to 564,900 by the end of 2007, representing over 6% of the overall workforce.

Both 88 Spaces and Xindanwei offer the amenities available in traditional office settings, such as workstations with ergonomic chairs and ample table space, conference rooms, pantries stocked with coffee and tea, printers, copiers and fax machines. The rates are 100 RMB per day and 2,000 RMB per month. Commemorating its launch in late June 2009, 88 Spaces is offering a Founder’s membership rate of 10,000 RMB for half a year. The sites will also host monthly events for members and their friends as part of their community-building and networking initiatives. With exciting sites like 88 Spaces and Xindanwei setting up shop, the future looks bright for Shanghai’s entrepreneurs.

Xindanwei. Photograph by Luo Hao.

We at BloggerInsight recently moved to our new home 88 Spaces, an awesome co-working space in the heart of downtown Shanghai. Since our inception over a year ago, we’ve been based out of our homes, coffee shops and the web2asia startup incubator. Fully incubated now, we’ve got the chutzphah to set up camp at 88 Spaces where we are thrilled by the prospect of joining a community of likeminded techies, geeks, creatives and entrepreneurs.

Contributed by Mike Fung, Ying Xue

BloggerInsight collected Chinese tech bloggers comments on the matter to learn more, all quotations are direct translations from their responses.

1. Why Google was singled out?

Common opinion believes Google is a well-known international company that is influential with Chinese netizens, businesses and the media.  If not Google, then who?

First, it was Google’s fault for linking to a huge amount of inappropriate content. When Google was launched in China, they knowingly entered into an agreement with the Chinese government in which they would do their utmost to make pornographic and indecent material inaccessible to the public. Clearly, Google had broken this agreement by linking to a great deal of pornographic material.

In the pursuit of profit and visitor maximization, Google’s system automatically associates and links certain keywords with pornographic content so that more visitors will use it as their preferred search engine. Based on visitors’ popular searches, it must come as no surprise that search results yield large amounts of inappropriate material.

Teenagers can easily find a lot of pornography through Google, and this kind of content is not allowed in China.

Secondly, Google is a big, international company.

There is a pretty good reason for Google to be singled out in this situation. As a well-known foreign company, Google represents a significant share of the market in China. After a series of campaigns forcing local sites to overhaul their webpages to eliminate inappropriate material, this campaign can be viewed as the Chinese government exerting pressure on international sites. Here, Google is a symbol by which the Chinese government proclaims a job well-done on cleaning up things on the home front and sends a clear message to international sites that they can’t get away with indecency.

The attack on Google may have arisen at this point because the government wanted to take some of the spotlight off the controversial Green Dam order. At the same time, by taking on a company with as much clout as Google, the Chinese government sends a clear message to corporations about their resolve and intentions for the Green Dam.

Thirdly, Google was not fully complying with the Chinese government’s internet control policy, and hasn’t been fully cooperating with government when disputes and controversies arose.

Google has always been unwilling to be investigated and blocked by the government when it comes to many issues such as Gmail.

Applications such as Google Reader and Google Documents are useful platforms for users to easily share information that the government does not approve of.  Google is adamant about providing comprehensive https services to ensure the security of SSL encryption, which makes it more difficult to be blocked by the GFW.

Fourth, Google does not run advertisements on CCTV. Google is not obligated to buy airtime on media outlets such as CCTV. Exposing that fact to the public will not influence medias’ revenues and cooperation with other advertising partners.

CCTV has no need to promote Google, because CCTV doesn’t get any ad revenue from Google, so CCTV has nothing to lose in reporting that Google’s not a “socially responsible” company. In the past, CCTV featured a story on the fake ads on Baidu. After Baidu spent over 40 million RMB on ads with the network, all the bad press went away.

What’s more, a couple of negative news stories about CCTV were revealed on the internet, including the one about CCTV terminating contracts with over 1,600 of part-time or temporary workers after the New Labor Law took effect in 2007 . CCTV’s negative news can’t hide on the internet.

Fifth, Google is an advanced search engine and is the only search engine that provides comprehensive international content to Chinese netizens.

As the largest search engine website, Google controls enormous amounts of information and data. Compared to other domestic search engines, which mainly focus on Chinese results, Google provides information from beyond China. Consequently, as long as the government wants to supervise the internet, Google will definitely be the first targeted one.

If not Google, who else? Only Google meets the conditions for this kind of assault. Additionally, there is a rumor that Google.cn’s market share has been growing, so Baidu was one of “black hands” behind this incident.

2. How do you see this incident affecting Google China’s strategic planning and user trust?

Most people think Google.cn has to and is already becoming more cooperative with the Chinese government. The fact of the matter is that from June 22nd Google.cn no longer provides international content. Google.cn has agreed to regularly report progress in restricting inappropriate material to the Chinese government. This might affect different users differently.

I think Google.cn will operate more in line with the government’s policies to a large extent. In other words, they will agree to more regulation and oversight. But I don’t think it will influence experienced Chinese internet users who trust Google more than Baidu. These users also have advanced knowledge of using Google. And most of them are familiar with the tools for accessing websites that been blocked. As less savvy netizens, Google.cn can fully meet their demands by providing what Baidu can give them.

Some people who haven’t been using Google as their primary search tool may use it less frequently, which may decrease its market share. However, a large group of new users may be drawn to it after all the media attention. Good or bad, there has been a lot of publicity for Google.

The government’s admonishment of Google will accelerate the company’s localization, which will lead to its further separation from Google.com. On the other hand, Google.cn will develop more business such as free music and Google pinyin for more profit in China. As for user trust, it has actually indirectly increased its credibility. Although it got some flack from the government, it does not change the fact that it is still a great search engine, meaning its mainstream customers will not leave. The media coverage effectively introduced Google to more new visitors.

Some people who are more trusting of traditional media, such as CCTV, who have never given Google a chance may now be even more unlikely to go there. Parents may be unwilling to let their kids use Google. This would be a great loss for the site. All the new regulations will decrease the quality of Google search results.

Human beings like doing what they are told not to. People are more inclined to do something if it is banned. I believe if customers know Google.cn has been forced to delete large amounts of useful information, they will be more likely to use Google.com.

Most bloggers said they would keep their eye on Google.cn’s developments.

3. How will this effect the way other international companies operate in China?

The international business community has been warned: what works in other countries might not work here.  China remains a unique market in terms of consumer tastes and regulations.  Companies need to follow the governments rules to succeed.

Generally speaking, in the process of localization, international companies tend to focus on consumer tastes and market share.  They make technology and content a priority, especially in the IT industry. Google merely having a quality reputation with customers is not enough to be a successful company in China. Google should have paid more attention to their public relations efforts to prevent the unexpected attack. On the other hand, they could have also cooperated with the government and adjusted their business model accordingly. For example, their Chinese subsidiary should be more independent instead of linking and indexing content from the headquarters. Also, to accelerate localization, more and more new business models are being developed locally while many traditional or new foreign products and services are simply avoiding the Chinese Market.

Increased operational costs are necessary cooperate with local government.

The direct influence of the Google event on other international companies in China is that they must reconsider the important issue of localization now. They have to regulate information more strictly in the process of localization. Internet companies will be most influenced, so it is them who have to think about the additional costs of business in China.

To the Internet industry, the Google event indicates a more severe surveillance of the internet by the government, so others have to be more careful if they want to enter the market.

To the IT industry, the event is just a warning sign telling companies that the government still has a tight control on economic development. To be more specific on the recent event, this is a message that could force companies to support the Green Dam and other similar extreme measures.

There will be greater attention placed on the problem of Internet control and the world will need to keep up with China’s attempts at internet censorship and there will definitely be more discussion on the Google case. At the same time, Chinese netizens are reminded by this incident that the Internet is not a free space.

As for the industry, IT companies that operate in China must be more cooperative with the Chinese government and enhance its internal censorship efforts.

Contributed by Mike Fung, Lucas Engehardt, Ying Xue

Disappointed to the Point of a Sick Stomach

In the last post , I predicted that Google’s traffic would increase dramatically after China Central Television’s (CCTV) reporting on the vast amounts of pornographic and vulgar content accessible through links on Google China. I made this prediction based on my understanding of communication and the psychology of netizens. I got this message today:

Hecaitou, you were right!

On June 18 at 6:00pm, the Google.cn’s comprehensive traffic ranked 22nd with 25,100 people per million visiting the site. And today (June 21 at 8:00pm), the Google China climbed to 20th place with 26,700 visitors per million.

On 18th June:

On 21st June:

If the manuscript for The Heart of a Teenage Girl（少女的心 by Simone de Beauvoir）had not been banned, it would not have gained such hype and people would not have clandestinely copied it by hand at the risk of being exiled to Xinjiang. In actuality, the plot of the book is pretty simple, the writing is not particularly great and it lacks originality. In an attempt to tarnish Google China’s reputation, CCTV just got more people to visit the site – free advertising.

For all the flack thrown at Google in China, it can never be blocked. It would be really bad press for China if it were to restrict access to the search engine, especially with Obama making a visit in the fall. For now, we can expect to see more small attempts to undermine Google from the likes of CCTV. Google will reciprocate accordingly, while knowing full well that their brand is secured.

Regretfully, despite the increase in visitors to Google after CCTV’s attacks through various channels, its ranking only went up three places. What this means is that CCTV’s influence is on the decline. I often hear that many TV programs on CCTV reach less than 5% of viewers but I could not believe it, thought there were so many people were fooled by TV media. However, I was wrong, people really have become wiser. According to the online statistics, a large percentage of the CCTV audience only watch TV series and the weather forecasts. (Even when the audience watch news on CCTV, very few of them believe its content) If CCTV had any kind of true influence, this kind of attack on Google should have yielded far more dramatic outcomes.

I had thought that after this event Google would have been able to capture more market share and to be a close competitor with Baidu. However, I would never have imagined CCTV’s influence has declined to such an extent.

Note: BloggerInsight is collecting more Chinese blogger’s comments on the Google China situation, more coming soon!

Huang Zhaolei, Mike Fung and Ying Xue contributed to this translation.

Many people see 3G as another big opportunity for businesses in China. For consumers, however, there’s still a lot of skepticism out there. Some say that 3G in China is fake as it doesn’t match international standards. There are rumors that China Telecom and China Unicom are merely interested in keeping their monopolistic control in the market and guarding against competition from more mature international 3G providers. Right now, Chinese consumers are not exactly crying for 3G.  Those who are adamant about 3G are in the business and stand to gain from the 3G revolution.

Below is a blog post commenting on this topic from an advertising angle. It is by Xu Dawei (pictured here), a well-known planner, advertising man, brand strategy expert, and chairman of Beijing XuDawei Advertising Co. Ltd.

Why are 3G ads so hard to understand?

From outside the window, the noise is loud, the zipping cars and bustling people never stop. This window is Beijing. It is also China, the Oriental Express that never stops.

In high speed, China enters the era of 3G. It is supposedly a great leap for China. But there are so many great leaps in China in recent years that people have gotten used to them. Today it is increasingly difficult to keep up. Hard to keep up materially, spiritually and sometimes both.

Perhaps the telecom companies know that consumers are totally clueless about what 3G is, what 3G can do, and how 3G can change our lives. They launch these crazy ad campaigns aimed at educating the public. China Telecom’s 3G advertisement was really expensive and featured celebrities like Kai-Fu Lee [President of Google China] and William Lei Ding [Founder & CEO of NetEase]. After seeing it many times, I still have no idea what Lee is talking about. Ding’s language was also vague. The ad seems to be saying that 3G allows us to access the internet and email anytime anywhere. But haven’t we already been using these services for a while now? If the message is 3G can provide much better service for these applications, then how exactly is it better? Is it faster? Is the network more stable? The ad’s producer fails in sending a clear message and merely uses things were hear over and over. How can that possibly help people understand what is 3G and what is the era of 3G?

Another confusing 3G campaign comes to us from China Telecom. Their slogan was “Wonderful in Wo(沃)” (“精彩在’沃’”). I have no idea what it means.  ”Wo” also means “in hand”? If that’s what they were trying to say, why not use the character “握” instead? The play on words is totally unnecessary. There’s no creativity here. Did they actually think this would become new slang for young people? Replacing “握” with “沃” is not exactly cool. Who were the geniuses behind this piece? What were they thinking? You need to tell people exactly what is so “wonderful” about 3G.

China Telecom and China Unicom are rich and powerful companies with marketing departments that are primarily concerned with spending tons of cash and getting the most airtime for campaigns to show the boss that they are actively promoting 3G. They are not too concerned with whether their ads are clear to the public. They would rather be playing golf.

I’m not exaggerating here. The reality is that ad and marketing execs are completely out of touch. They fail to notice the changes in target audience’s mind and they don’t care whether the audience is getting the message. The ad agencies are solely concerned with producing campaigns with exaggerated ideas or “creativity”, while the client companies have total confidence in them and give them license to do whatever they want.

As a result, many ads can only be understood by their producers. For the companies paying the agencies, they might have a slightly better idea after repeated pitching and brainwashing from the producers. The general audience is left finding the ads extremely difficult to understand. They know nothing about the content of advertisement, the advantages of the product and its points of differentiation. They don’t know why this product is more expensive or what the selling points are.

Have our ad campaigns lost their essences? What’s more, have we as advertisers lost ourselves? Do we still hold naivete, goodness, sincerity, justice and love in our hearts? How do we measure up as good people? In your spare time, ponder what is advertising? What does it mean to be in the ad business? What value or meaning do ads bring to the world and the individual?

Translated and edited by Johnvee Yin, Ying Xue and Mike Fung from BloggerInsight.com