QUICK NEWS AND INTERESTS 04/15/08

Railway saves Tibet
Flying in from Beijing to attend the BOAO Conference in Hainan, I had the distinct pleasure of speaking to government ministers and leaders of different levels about Tibet (They were not too enthusiastic). My favorite response came from Shi Dahua the chairman of China Railway Group Limited, who proudly claimed that his railway line into Lhasa is actually saving the Tibetans. China is not only bringing them culture (really??) it is bringing them a way to save themselves as there is not too much oxygen in Tibet. Nicely put it is a way for Tibetans to leave and live in China, easily and efficiently. Wow. I nearly choked on that last point. Just thought I would share this wonderful pearl of wisdom.

BOAO Conference Hainan
This yearly conference is similar to Davos in Switzerland, except more focused on Asia. Business and Political leaders gather to share opinions, dispute ideas and find solutions to the challenges of the region and the world. It is a well-organized and high profile, 3-day event that brings together individuals who can actively make change in our world. The focus this year was the environment and what we can do as leaders to enact change. Our forums included Hu Jintao, Pervez Musharaff, Kevin Rudd, Nambar Enkhabayar, The President of Chile, The Prime Ministers of Sweden, Kazakhstan and Tonga, Nobel Prize Winners, Heads of companies like Google, COSCO, O and M, Samsung, SK, CCTV, Tata, and other notable organizations that my poor memory fails to recall. It was the first year I have been invited to this conference and I must say it was quite an intellectual feast. Putting this many people of varied and influential backgrounds together in one room is the best way to nurture and generate ideas that can make a difference in our world. For Filipinos, we represented a small delegation that included politicians and businessmen in the fields of banking, real estate, consulting, logistics, and distribution. While this year it felt like the Taiwanese + China negotiations took the stage, The Philippines can still be, politics aside, an excellent source of projects with solid returns. There were four of us who met in private with Vincent Siew to help strengthen business relations with Taiwan.

It is through conferences like this that I feel we can grow together as a region. With China in front, Asia can become a power to balance Europe and America.

NEW OLYMPICS, NEW BEIJING: MANY PROBLEMS

Tibet is still closed off to foreigners and the mood of local government leaders is certainly not pleasant. As briefly expounded by one of the vice ministers I attended a forum with recently: The reason Beijing is so irked with the Tibetan situation (over the humanitarian reasons of course), is because for the last few years the PR line and public mindset has focused and relied on the 2008 Olympics to be THE representation of all that is modern and impressive in China. Why does the Olympics need to be the opening act of Chinas entrance to the world stage? Is it not enough for it to be a great success? Why does the slogan chanted in the city have to be “New Olympics, New Beijing?” What is wrong with New Olympics, Old Beijing?

To host the Olympic games is certainly a great honor and responsibility, but this country has hyped it to an extent that any bad press has an almost double effect on the international view and mood on China. They will need to sober up a little bit, because this negative public view does not look to dissipate anytime soon. With the torch making its way to Beijing and with comparatively quite bit of stops to make (over 20), I would think there will be quite a bit of damage control in the coming months.

FAKE FERRARIS

Car Enthusiasts are purchasing Fake Ferrari's. Well, kit cars have been in the market for years, I do not necessarily see how this is different? For all those drivers purchasing these fake Ferrari's, I really do hope that it is a Porsche hammered into a Ferrari and not the usual Pontiac Fiero or you will be in for a fat, embarrassing dose of reality at the corner light.

http://edition.cnn.com/2008/WORLD/europe/04/03/counterfeiting.luxury/index.html

For non-car enthusiasts, kit cars are most often kits that can be used to modify an existing vehicle. This is usually the bargain option for a driver interested in getting some extra mileage from the old family hauler (and an added dose of mojo). As you move up the price ladder, you can get some seriously tuned kit cars that perform better than the original and look identical!

I may be a purist at heart, but I have nothing against kit cars. I would love to purchase an old Daytona or Shelby Cobra kit and drive it to work every day. At least you would not be terrified of scratching or denting the car. Of course it would stay well hidden and out of site for my weekend jaunts. Kit cars are made to be enjoyed and driven to the ground-- not for show!

QUICK INDUSTRY NEWS (04/06/08)

Yahoo drags, Ballmer irked
“It has now been more than two months since we made our proposal to acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the day prior to our announcement. Our goal in making such a generous offer was to create the basis for a speedy and ultimately friendly transaction. Despite this, the pace of the last two months has been anything but speedy.”

t seems that Steve Ballmer is showing his claws as Microsoft loses its patiences with Yahoo. April 26, 2008 is the day we will all be waiting for. If Yahoo has not answered (favorably), Microsoft will take its offer to the shareholders at what I would guess would be a reduced purchase price. For Yahoo, I am still curious as to why they think they can hold out for better? They were not doing doing well before the offer nor were they strategically placed to challenge Google. This Microsoft bid was the best thing that might have happened for the board, who will be able to leave semi-gracefully, before getting clobbered further by their competition.

What I am sure has become a major concern for Microsoft is the new anti-monopoly law being put into place by Beijing. Yahoo is quite invested in Alibaba and since a major factor behind the Microsoft/Yahoo merger is the Chinese Market, I wouldn't be surprised to hear further aggressive statements coming from Microsoft, as they work to complete this merger expediently.

The end of 1 year multiple entry visas to China?
I received a call today from a friend in HK complaining about the new regulations being imposed on foreign businessmen in China. He read an article stating that 1 year, multiple entry visas would no longer be issued. Aside from being a major revenue boost for China, it also minimizes the number of foreigners that enter the country (they have been at this for a few years). This is going to hit a lot of businesses, specifically the small and mid sized entrepreneurs. Business in todays world necessitates travel. China requires a greater attention to relationship building than most. I am sure many of us old China hands have our own little stories of how weak local relationships have led to missing shipments, delayed licenses and similar “irritations.” Worded in a more direct manner-- you want to do business on the mainland, you make sure you are there to eat and drink with the local government, sing songs with the company management, and pace the floors with the factory workers, or you may be in for quite a ride. Guanxi and restricted visas do not go well together.

FOCUS MEDIA NIPS THE 800 POUND GORRILLA

Focus Media and China Mobile have been dealing with serious public backlash these last few days. Any company that can rattle an 800 pound gorilla like China Mobile deserves some attention. Presently, success stories in China involving hundreds of millions are not as uncommon as one might think. Contracts and licenses are still reliant on close relationships, whether nurtured or blatant-- like token board seats and “partnerships.”

Focus Media was started by a young entrepreneur, whose connections and adept assessment of the local market, has resulted in all of the LCD screens you see in the many elevators and building lobbies throughout cities like Beijing and Shanghai. These screens play expensive advertisements that are justified by the fact that millions of Chinese have nothing to do but stare when riding overcrowded elevators. Clever. Lucrative.

Venturing beyond screens and into your mobile handsets, the article I was forwarded read: “Chinese authorities said Monday they are investigating complaints that millions of cell phone users were spammed with unwanted text messages from advertisers...the uproar over what China's media has dubbed “Text-message gate” has drawn apologies from a major advertiser and the country's biggest mobile phone carrier.” This spam hit more than 200 million mobile phone users through China Mobile and China Unicom. Wow. That is 4 times the total mobile subscriber population in the Philippines.

So, what exactly is the problem here, spam messages are common in other countries? Well, for one, my guess is that Focus Media used the profiles garnered from one of their other existing services (Screens, Online, and a few others). That is a big deal and one that the rest of the world has not been able to address. Just who owns your information?

I have invested in the Mobile and Advertising field because I feel that information, specifically, personalized information, can change the Mobile Phone and Computer into a completely different experience for the subscriber. It can become a gateway for advertisers to give that personal touch, One that is welcomed by the consumer because it is both entertaining, relevant and interesting. Your life can create this personalized bubble-- at least with regard to how the world interacts with you.

SPAMMING does the complete opposite. It turns the Mobile Phone and your computer into a source of irritation. What really goads me is the fact that first impressions count. Look at how China Mobile and China Unicom have reacted: stronger rules and regulations; limiting Focus Media's gateways. This company has made it that much harder for the rest of us to operate. The public is now up in arms, complaining about the privacy they expect (they do not realize their profiles have been used in many other forms for many years). They feel cheated—violated. As the effects of this ripple outwards, you will find other telecommunications companies taking a similar stance. I do not blame them, the best way to protect the consumer is to design rules that weed out all but the most promising and value added services.

For Focus Media, its a big drop in their share price and a less lucrative future. For the rest of us, it is the start of the battle between how far we will allow advertising companies to go. the information is out there and in their hands, we will just have to see whether it becomes the interactive and personalized future that I would like to see? An annoying, “pop up” windows experience? Or that small and balanced, middle ground...