Last.fm is a great Web2.0 example – social networking, tagging, free, user generated playlist…

Last.fm is the flagship product from the team that designed the Audioscrobbler system, a music engine based on a massive collection of Music Profiles. Each music profile belongs to one person, and describes their taste in music. Last.fm uses these music profiles to make personalized recommendations, match you up with people who like similar music, and generate custom radio stations for each person

Truth be told, the Last.fm’s Player is a bit, well, weak, but, that aside, I’m really happy with the music I’m getting pushed, for example: Laura Pausini’s “Viveme”; Jurassic 5’s “Hey”; and Long Beach Dub All Stars’ “Kick Down”.

There’s a lot of talk about increasing royalty payments for streaming services – we’re not sure if this would be the best move given the weaker economics (at least, with early adopters) of web streaming v traditional radio – what we’d like to see would be some type of blanket licensing – thus allowing for numerous subscription opportunities/possibilities.

Today, Kevin Newcomb wrote a ClickZ article (okay, its a press release) titled “AOL to Implement E-mail Certification Program” discussing how AOL will implement Goodmail’s cryptographic CertifiedEmail program and phase out its IP-based Enhanced Whitelist (which is, more or less, reputation based).

In October, Yahoo said they too would roll out Goodmail’s product.

This sort of gets away from the whole permission based marketing thing, doesn’t? I can only see this as a bad thing moving forward for both consumers and the industry…

Last week, news hit that Shanda is partnering with Hong Kong listed electronics retailer Yolo to distribute Shanda’s EZ series of home entertainment products got me scratching my head (again) about the present and future of e-commerce in China, specifically, where is it going?

Consider the Shanda and Yolo relationship:

(1) Shanda is one of the largest web based companies in China with a hyper active — first adopters of e-commerce — and loyal customer base, and yet they’ve been unable to successfully sell their EZ home entertainment products via Shanda’s platform

(2) Shanda has structured a deal whereby Yolo will not only subsidize EZ Pod purchases (RMB200 below sticker price), but also share revenues from EZ Pod (i.e. fees generated from paid subscriptions)

So the question is, why is Shanda moving offline (and asking Yolo to subsidize EZ Pod) when they have a captivate audience, solid branding, traffic, and a solid payment platform in place (could you ask for a more fertile e-commerce environment)? And, what does this say about the future of e-commerce in China (ex-out gaming and mature content)?

I have some ideas, but I’ll leave it up you, the reader, to fill in the blanks…

Yesterday’s, Asian Wall Street Journal ran a story by Rebecca Buckman discussing the new white paper published by US-based venture capitalist Pascal Levensohn titled, “Rites of Passage: Managing CEO Transition in Venture-Backed Technology Companies”. It is definitely worth a read.

Sage and his team from Pacific Epoch did a great job organizing last night’s talk on e-payment universe in China – unfortunately, the three panelists (99bill / Smartpay / Yide), while nice guys, were about as interesting my 5th grade Latin teacher.

In hindsight, as I review my notes, I realize that their lethargic attitudes totally reflects their universal opinion of the China e-payment and e-commerce environments in 2006 – FLAT!

To be more exact, I think the boys on the panel harmonized that “…2006 was not going to be the breakout year for e-payments in China…” and the “…e-commerce would likely not gain traction until specific regulations are relaxed and customers learn to trust online retailers…”

My general China e-commerce thesis assumes the catalyst sparking e-commerce/e-payment’s break out (i.e. fantastic rampage) will be when vendors start accepting returns and replacing broken products. If you look at the US model, for example Best Buy (who operates stores in China), I whole hearted believe their value add to the customer goes beyond “pricing” — quite simply it is customer service (including knowledgeable staff and after-service support).

This model doesn’t exist in China (or Hong Kong, for that matter) but it should — manufacturers need to make retailers more accountable for the products they sell — this would not only improve overall customer experience, but also demonstrate a certain level of “buy-in” from the vendor with regards to building a long-term relationship with their customers – (i.e. TRUST)!

With that said, there were some interesting “bits, pieces and sound bites” that are worth noting. I’ll list them in a Q&A format:

Q1. How many users has your company signed up?

(a) 99bill: 4m
(b) Smartpay: 500k
(c) Yide.com: 600k — also, 65% of all Yide transactions are conducted through an e-payment provider, this is up from 40% in 2004

Q2. What % of China’s Internet users purchase goods/services online (e-commerce)?

(a) 99bill: Latest data reveals 15-20% of all Internet users

Q3: What are the major obstacles confronting e-payment moving forward?

(a) 99bill: (i) consumer trust, (ii) logistics, and (iii) weak user experience
(b) Smartpay: (i) government regs
(c) Yide.com: (i) size of transactions limited to RMB1,000/day, yet Yide’s average order is about RMB1,200 – to process this order, Yide is must split the transaction into two

Q4: After mature content and gaming, what is the most popular good/service purchased online?

Split between clothing and jewelry

Last week, I attended the UBS Greater China Conference in Shanghai. UBS does a nice job keeping this conference focused and intelligent. Ymer hasn’t touched too much on the status of 3G in China, but given the fact that all “big four telcos” (China Telecom / Netcom / Mobile / Unicom), as well as Huawei, Datang Mobile, and Spreadtrum were at the conference, perhaps this is a chance to reveal what was reported (nothing overly dramatic, mind you, hold onto your hats):

(1) Most agree China will issue 3G licenses this year — likely in 2H06.

(2) Most companies are expecting three licenses, which means some restructuring is needed among the Chinese telcos — this is old news, though.

(3) Maturity of TD-SCDMA is the biggest bottleneck today — again, the market assumed this was the case for sometime — the government’s licensing decision will largely be dependent on the maturity of this technology. The next stage of TD-SCDMA trials is critical in raising overall confidence in this technology which is expected to be completed at the end of 1Q06.

The upside — the fact that my Dopod 818pro isn’t 3G compatible won’t be an issue for at least another year…

Earlier this month, Starbucks won its copyright infringement case against Shanghai Xingbake Cafe Corp. Ltd. — surprisingly, Starbucks is the first international company to prevail under a 2001 Chinese law meant to protect well-known international trademarks. According to a report on Yahoo! Finance:

A Shanghai court ordered Shanghai Xingbake Cafe Corp. Ltd. to stop using the name Xingbake, the name used in Chinese by Starbucks Corp. “Xing”, pronounced “shing,” means “star” in Chinese, and “bake”, or “bah kuh,” sounds like “bucks”.

This news, while very encouraging (big thumbs up to judge Lu Guoqiang), is chronically overshadowed by daily reminders of blatant IP infringements, such as the photo I took this afternoon of my favorite candy bar, KitKat:

KaKes is manufactured by Hongyi Food — I couldn’t bring up the website so I don’t have much information to report back, my bad.

Anyhow, in the words of the incomperable American singer and dancer, Paula Abdul “…[we] take-two steps forward, [we] take-two steps back…”

Shailendra Bhatnagar, a writer for Reuters, reports that Indian mobile phone companies are taking cheap handsets and life-time prepaid services to India’s hundreds of millions of low-income earners ; the new service guarantees a number for life for just over $20. In the past, a prepaid number would cease to exist if it was not topped up after a certain period of time.

Less than 40 percent of India’s total area is covered by mobile networks, and fewer than 8 in every 100 Indians use mobiles — compare this with China where 30 in every Chinese use a mobile — sort of amazing how far China has come in such a short period of time…

What is also amazing is how fast technology becomes a commodity — even in a country like India with a lower mobile penetration than China (i.e. so much growth potential), carriers are forced to slash prices and design creative marketing campaigns — makes you rethink some of those business plans touting “breakthrough proprietary technology” as the core barrier to entry?!

So really, at the end of the day, I guess it does all come down “stuff” like controlling a proprietary network/database, branding, team and yes, execution. Funny ol’ world, ain’t it?

I was at a dinner the other night hosted by MIT’s Shanghai alumni club where the new president of MIT, Neurobiologist Susan Hockfield, gave a very interesting speech how the predominant development trend at MIT over the next decade will be “mashups” of life sciences, technology and business applications.

During the Q&A session President Hockfield mentioned something called “Open Source MIT” – I didn’t know about this but apparently MIT has placed all of their curriculum online (e.g. class notes, etc) for free. They get an average 34,000 new users a month, of which 50% are international users.

This “free access” reminds me of a line from the movie “Good Will Hunting” — I think it was Matt Damon who said, “…you wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library.”

Not to harsh too much on Shanghai’s evolving advertising and marketing community — in all fairness, it’s improving by the day — but the agency that created this campaign for a Shanghai hospital should be taken out back an politely flogged.

The photo below was taken with my mobile in an elevator in the office building of my Chinese language tutor – by the way, it is a Grade A building that charges premium rent.

If you can’t read the heading on the photo is says “Shanghai Kowloon Man’s Hospital” and the Chinese below reads “…arriving in Shanghai”.

This campaign is right up there with the IPSTAR commercials showing satellite dishes fastened to the huts of Chinese farmer eating pizza…

My little sister, Sara, is a doctor who just graduated from Columbia Medical School in New York City – she started a side business with her husband, Mason, called Lil’ Monkey Designs — the company designs and manufacturers baby carriers.

This is their first product – The Kangi.

What is cool is that they did a little market research and came up with two styles that fits NYC’s bi-polar populous: (1) leather (upper west side NYC); and (2) leopard skin (lower east side NYC).

Also, interestingly enough, they went with a manufacturer in the USA rather than outsource to China — my lil’ sister told me it was “…cheaper…” and “…allowed for a faster turn around time…”.

This got me to thinking about the fast retailing (not to be confused with Japanese retailing giant Fast Retailing) trend that made fashion retailer Zara, well Zara. According to an article on Harvard Business School’s Working Knowledge website:

This “fast fashion” system depends on a constant exchange of information throughout every part of Zara’s supply chain—from customers to store managers, from store managers to market specialists and designers, from designers to production staff, from buyers to subcontractors, from warehouse managers to distributors, and so on. Zara’s organization, operational procedures, performance measures, and even its office layouts are all designed to make information transfer easy.

It makes sense that the Mainland’s fashion retailers would eventually adopt a similar strategy given the crazy amount of competition and access to abundant manufacturing base (even if a majority of capacity is allocated to manufacturing exports).

Maybe Sara and Mason are on to something — maybe they represent a growing trend in the US (foreshadowing China) — localization.

The three biggest electronics and home appliance retail chains in China are – GOME Home Appliance Group, Suning Appliance Chain Store (Group) Co. and China Paradise Electronics Retail Ltd.

GOME is the largest with 420 outlets in 100 cities and only 5% market share. Moving forward, the company looks to have at least 1,000 outlets by 2008 when they expect China’s electronic market to be worth RMB800 billion (about US$100 billion).

At first glance seems like the market is quite fragmented and filled with opportunity — consider this article from China Economic Net article titled, “Electric retailers not a best buy stock” about China’s impending electornic retail chain battle royale — it might change your mind.

I bought the amazing Dopod 818pro two-weeks ago – by far one of the best PDA/mobile products I’ve seen on the market in some time. The 818’s usability, wireless capability, MS’s Mobile 5 and storage capacity are tremendous…

As a result, admittedly, I’m now addicted to the convenience of WiFi and (along with my colleague David) have made it our mission to identify all the WiFi Hot Spots in Shanghai. This must sound fanatical but for anyone who has recited this familiar phrase (made famous by US-based Verizon) while on their mobile, “can you hear me now”, you’ll understand the importance of fast, continuous connectivity.

Long and short, my WiFi impotence got me thinking about peer-to-peer network sharing – sort of the Holy Grail in the wireless universe – and whether there were any companies in China working on this. So, this morning, burning up the phones was I, reaching out to all the wireless guys I know in China to see if they had any information on companies working on peer-to-peer WiFi sharing applications.

My quest ended in disappointment – at least on the China end. Thanks to Google, I was directed to Jon Gordon’s public radio show, Future Tense, where I learned of two startups working on new peer-to-peer wireless technologies. Gordon writes:

Both Mushroom Networks of San Diego and WiBoost of Seattle plan to sell technology that will gather unused Internet capacity from neighbors. One possible roadblock is possible opposition from Internet service providers, which have fought the sharing of Internet connections in the past.

A couple thoughts: (1) I like how WiBoost mashed up Google maps into their homepage; (2) I’m not entirely clear on the how the applications work, but given China Mobile and Telecom’s virtual monopoly I wouldn’t imagine there would be that many roadblocks for this technology in China; and (3) I have some lingering questions about security/encryption

I am working to on a new logo for Ymer – I thought the most difficult part of the process would be coming up with a funky, creative, meaningful design – Wrong!

Surprisingly, the most challenging aspect of this process has been the positioning and font size of Ymer’s Chinese name. I never realized what an explosive/sensitive area this is…

The non-Mainlander perspective (inclusive of Hong Kong ren) is English should be the most prominent feature of the logo – if the Chinese name couldn’t fit, so be it.

The Chinese Mainlander perspective is English and Chinese should be on the same line and the same size – if the Chinese name couldn’t fit, make it fit.

What surprised me the most was how immaculately consistent these views were – in other words there were no exceptions – group stratification was absolute.

What does this say about cultural subtleties? I’ve been in Asia for over 10 years and it never occurred to me that this would be an issue – in fact, it never occurred to the Hong Kong ren living across the boarder, either.

This begs the question, can a non-Mainlander truly understand/relate to Mainland Chinese? Or is the question, can Mainlanders come to grips with the fact the not everything breaching China’s boarders will be localized/sterilized to satisfy local sensitivities – and that size doesn’t matter – it’s only a logo.

The net result of the conversations above is the logo below:

I haven’t decided if Ymer will go with the above design or with the logo the “way cool” and talented designers at US-based Sukamishi are working on. If you care, stay tuned…

It is funny how in the US/Europe everyone is talking about “Seamless Connectivity” while in China we are still working on “Connectivity” — are we really that far behind in China?

Maybe the question should be, “do we really want seamless connectivity?” Do you really want your watch talking to your computer talking to your radio talking to your TV? Where is the value-add in this — I don’t see it and I don’t want it!

Robin Williams riffed about a conversation you might have with your TV once all your devices can work together:

“I want to watch a movie.”

“Porn again?”

“No!”

“I’ve been talking to your computer, and I know what you like.”

“Shut up!”

If you are interested in a full review of CES click to Kevin Maney’s USA Today article.

What were they doing with a headcount that high to begin with? So much for user generated content…

from Asian Private Equity News:

Bokee.com, one of China’s largest blogs, is reportedly planning to lay off one-quarter of its 400-person staff some three months after raising a $10 million second round of venture capital. For those readers who don’t recall, BlogChina (later re-named Bokee) is one of many Chinese web sites distributing illegal music, videos or pornography that have attracted U.S. venture capital. Chinese readers will recall BlogChina first gained notoriety for its controversial re-use of materials from other websites. Later, Bokee announced it had become one of China’s most popular web sites after Chinese internet pioneer MuZiMei began posting her nude photos and the supposed diaries of her sexual exploits online. When Chinese regulators told the site to cease the “Dear Pekinghouse” style columns, the Bokee moved to Japanese-style non-explicit pornography which allows it to remain one step away from Chinese regulators. No word yet on whether investors Bessemer, Mobius, Granite Global and Softbank will be able to parlay their portfolio company into a listing on the Nasdaq during 2006.