One of the reasons we’ve decided to co-invest in Kwestr, an innovated Beijing based start-up analyzing social networks and gaming, has a lot to do with the management team. Frank Yu, a Senior Venture Partner with Ymer for many years, and co-founder of Kwestr may just be one of the most in-tuned social gamers in Asia. Frank is joined by Calvin Chin, Chris Tou, and Prashnth Hirematada. We’re pumped to be included as one of their four seed investors and advisors. Stay tuned for more information as to when Kwestr goes live.

Today’s New York Times ran an article titled “Studios Try to Save the DVD” which mirrors an earlier post we filed titled “Why Warner Bros. did Toshiba a massive favor by going with Blu-ray (Rock Lobster)” after Toshiba bowed out of the HD format race in early Jan ’08. The Times article reads:

But the victory of Sony’s new Blu-ray high-definition disc over a rival format, Toshiba’s HD DVD, masks a problem facing the studios: the overall decline of the DVD market. [US] Domestic DVD sales fell 3.2 percent last year to $15.9 billion, according to Adams Media Research, the first annual drop in the medium’s history. Adams projects another decline in 2008, to $15.4 billion, and a similar dip for 2009.

We suspect the decline in DVD sales will accelerate in 2008 falling more than 11% to about US$14.3 billion in the US (need we even talk about China?) on the back of the proliferation and growing acceptance of the Internet based ad supported digital content model (free stuff), lower bandwidth costs and fatter pipes. Indeed, five years from now DVD sales will be 50% lower (conservatively) then where they are now.

Why the doom and gloom?! I mean, won’t the Studios come up with cool new interactive features that will pull consumers into their DVD web?! Not going to happen.

Okay, so what about all those ad supported models, you know those ones that give streams away for free yet charge for digital download or physical DVDs? This must be the answer the industry is looking for…right?! Hey, we’ve got all those social networks to monetize. Those dudes totally want our stuff. Hoorah! Hoorah! Hoorah! We’re saved…

Well, boys…you might want to sit down with Google and ask them about their ability to make money off social networking. Better yet…let’s chat with Google’s CFO George Reyes about 4Q 07 revenues. Hey Reyes, what’s up with Google’s US$900 million deal to supply ads to Myspace? According to a recent BusinessWeek article Reyes states:

“…[in 2007] social networking inventory is not monetizing as well as expected…”

Anyway you look at it…this whole selling content (both online and offline) is a genuine mess. Mark our words: 99% of all ad supported content models are doomed for failure. Why? For so many reasons, such as: (1) Because once a content provider does a deal with Google why would you go anywhere else to consume the same content? and (2) Ad revenues are going to polarize around “non-trendy, Web1.0 sites”, such as CNN.com where consumers are accustom to seeing advertising; and as a result of this polarization we’re going to get a lot of very unhappy dissatisfied studios, labels and artists hoodwinked by flashy sites promising sacks of cash. Whatever!

Moving forward, we think on-line ad supported content models will be the main catalyst (second only to online piracy) behind the continuing eyeball popping deflationary pressure on content for the foreseeable future. And no one will make any money (sans one or two sites) to boot. Talk about a pissed off world looking for CHANGE!

There is light at the end of the tunnel (cue soapbox) but a lot still needs to be done: The answer is blanket licensing at the ISP level…full stop. This is the only way to to properly compensate content providers and ensure some amount of recurring income those companies aggregating and distributing content on-line.

In late 2005, I happily connected with Hank and Steve, two of the three co-founders behind Shanghai based education service Chinesepod. I’ll be honest, Chinesepod was such a fresh service there weren’t many comps to look at, thus it was truly difficult to determine whether or not user acceptance and demand would hold-up long enough for the company to reach critical mass and turn a profit. Basically, we had to wait and see what happened as the business matured a bit more.

In the meantime, I tucked in, did some crawling around the Web, held a dozen or so focus groups (online and offline), and became a user of the service.

As part of my research I placed adverts on Craigslist (and a couple local Chinese bulletin boards) looking for Chinese Mandarin tutors – I wanted to see if there were alternatives to the traditional offline courses or CD/web enhanced lessons. What I started noticing was a significant number of duck taped Web2.0 Chinese and English tutoring services – these tutors had cobbled together real-time virtual classroom on the back of Skype. The only problem was I had no way of determining if any of these tutors were good value or a waste of space.

This got me thinking – why not create a web based on-demand professional tutoring service for Chinese mainland students of all ages, across all subject – some possible service features could have been: (1) no required minimum session time; (2) tutors selected based on student/parent ranking, relevance, or dialect; (3) sessions held in a browser based 3D virtual meeting room; and (4) various social networking tools.

Sure, there were some challenges in hiring and qualifying tutors, monitoring the quality of sessions, and 3D environments were bulky but the platform was scalable and required few full time employees – definitely an execution play rather than a capital intensive venture. However, I got busy and this concept melted like the polar caps.

Fast forward to February 2008 – so, I’m surfing around New York Times’ website and I came across an article by journalist Michelle Slatalla titled “On Demand, on Time and for a Fee, an Army of Tutors Appears”. The article is a narrative of what happened after Slatalla unleashed her kids on a couple US online tutoring services – indeed, it is worth a read – more importantly, it jarred my memory…

Granted, it has been a couple years since (and, sure there are some people playing around in this space in China) but I still think this is a very interesting business – especially, given recent advancements in 3D environments, increased popularity of computers in the home, and the fact that Chinese students (and uniquely so) have completely blurred the line separating the real world (offline) and the virtual (online) space.

To wit, American students are drawn to a service, such as Tutor.com it’s heard to imagine a similar service not succeeding in China.

UPDATE (13/2/08): This morning, we got an email from Steve Williams (Chinesepod) that provides some additional insight into China’s tutoring industry – we don’t normally post comments/emails on our site but this one is particularly interesting. Many thanks.

I’ve seen a fair bit of interest in the space from Indian call center firms, looking to extend into English tutoring in the China market. I think they’ll have a hard time building brand awareness, given the spend of big chains like English First and Wall Street, but if they partnered with off-line schools they could have a good opportunity.

Scale is another problem, as is stopping freelance tutors poaching customers and servicing them off-platform. Another huge gap is the lack of online support materials. A key piece of offline school ‘technology’ is the textbook, but what do online tutors use? A lot of them send the student a link to an Amazon page, where the student buys a book and waits a week for delivery. Insane! I think there is an opportunity for Praxis here, with on demand syllabi.

For the past 12-months, the market’s been buzzing about Beijing’s partnership with MindArk (creators of Entropia Universe) to build a second dam on the Yangtze River…er…I mean they could possibly build a second dam assuming their joint Beijing Cyber Recreation District project (the world’s largest 3D virtual world capable of supporting 7 million concurrent users) throttles up and launches free and clear.

In fact, not only could the Chinese government build a second, third or even fourth dam, they just might figure out how to (competently and securely) connect western consumers and retailers directly to Chinese manufacturers (sidestepping our friends at Alibaba along the way).

As Vic Keegan reports in a recent Guardian article titled “Virtual China looks for real benefits” this is:

“…a bold attempt to repeat what China has done in manufacturing (i.e. conquering the world) in services. Be warned. It doesn’t stop there. This site, now under construction, will have all the infrastructure (server farms, communication links, electricity, banking links, logistics, etc) needed to make this the world’s one-stop shop for consumers and producers.”

Full stop — this “virtual world stuff” is for real and will no doubt have an immeasurable impact on real world commerce. Yup, it could take a number of years to get it right but given the amount of capital, breath and focus China (let alone the rest of the world) is directing at this space the time is yesterday to begin toying around in this field.

Already, virtual commerce is massive (just ask the Korean’s circa 1998) and hitting the bottomlines’ of major listed Internet properties – for example, 65% of Tencent’s revenue is generated from the sales of virtual crap. Furthermore, virtual commerce is already a sophisticated market economy striated into primary (site-to-user) and secondary (user-to-user) markets – the equivalent of a US$2.0 to US$2.5 billion market worldwide.

And, over the next couple of years this industry will only continue to grow and proliferate as bandwidth increases allowing more and more users (in developing countries like China, India, and Thailand) to join 3D virtual communities, such as Chinese start-ups Hipihi and Novoking.

Of course, there are a lot of people who aren’t drinking the 3D Kool-Aid, and by some measure, they’re right…but not entirely. My most excellent friend and brother Frank Yu writes that graphics and experience has less to do with a successful roll-out than understanding the local culture. Frank writes:

“…anecdotal evidence seems to indicate that Chinese MMORPGs and Casual Games can more easily be integrated into the markets of Vietnam, Indonesia, Russia and India easier than the more higher end Western games that most industry analyst are familiar with. If this is the case, there is a revolution in gaming based not on graphics, performance or even features but one based on distribution, cultural affinity and low barriers to entry…”

Recognize! If I’m a Western gaming or virtual community operating in Asia – sure, point well taken…but what if I’m local? What if we’re all local and operating on a level “cultural” playing field? What if Beijing tosses up a platform that support 150 million avatars and recommends (in a “velvet glove, iron fist” sort of way) leading manufacturers sign up? What will happen is you’ll be forced to compete – so rather than hang around – waiting – just get going because that virtual runway is pocked marked and difficult to navigate in the best of times.

I’ve been waiting to use this video titled “Are Virtual Goods the Next Big Business Model?” for a while, granted it is from this past June’s Virtual Goods Summit 2007 hosted at Standford University, but it is really quite good (assuming you like to listen to a group of entrepreneurs, VC’s and other tech industry people who got together to talk about the emerging market opportunities for virtual goods and economies).

Today, the way digital media (e.g. video, text, and audio) is consumed in China online via search and social distribution (e.g. emailing links, blogging, etc) requires that content be virtually free to distribute and consume.

To wit, users want unprotected, legal content in quantity and at a low price.

So, one of the main barriers preventing such a content service from succeeding in China is the reluctance of major content providers to distribute their content without the protection of a Digital Rights Management (DRM) standard. Contrary to widespread belief, the fact that existing models fail in China has very little to do with the fact that illegal content accounts for more than 99% of all digital content on China’s web or the misguided belief that locals won’t pay for content, but rather because, until very recently, no one has come up with a scalable, profitable and legitimate solution that properly compensates content owners for their property.

And this is why we are so excited about our recent investment in Feilio as we believe they have the answer content providers, worldwide, have been pining for.

Feilio’s solution is a service that aggregates and distributes legal content to Chinese consumers while fairly compensating content providers for the use of their digital content.

The service works is as follows:

Content aggregation: Feilio registers content from publishers and producers of audio, video, and text media. Digital fingerprints are created to identify each media file, linked to its ownership and metadata. File usage is tracked on end-user devices using client software that also provides user interfaces, search, recommendation, and social networking functions to help people discover new media.

Content Distribution: Feilio provides content licenses to networks converting previously illegal file sharing and copying into legal activities, inoculating universities & networks against copyright infringement litigation. Users (e.g. students) need not change their current file sharing behaviors associated with free content sites.

The capital we are investing will go to scale Feilio’s platform, expand its nationwide network to +300 universities, and aggregate content.

We are thrilled to be part of Feilio, a groundbreaking company that seeks to not only remedy China’s digital content piracy problem but also ensure content owners are able to monetize file sharing.

Yesterday, around 3:15 pm, I jumped into the elevator and waited patiently as it dropped the 40 floors that separates my office from the Bloomsbury bookshop in the lobby – the sole intention of my trip was to pre-order the final Harry Potter book, Harry Potter and the Deathly Hallows.

When I rolled up to the checkout counter and asked for the sale form the sales assistant, Lucy, she asked me, “…do you want the adult version or the children’s version?” I asked, “What’s the difference?” Lucy responded, “Nothing really, just the cover…”

I didn’t hesitate one nanosecond and yelped, “Of course, I want the children’s version…it has the way cool cover art!”

Scratching my head, I’m thinking, “What’s going on here?!” Are adults embarrassed to be reading a Potter book? It’s not like you’re a Rabbi sneaking a shot of whiskey hidden in the scrolls of a Torah or something. It is just a book.

When I got back into the office, I did a little research and discovered that Bloomsbury first introduced the alternative adult cover when they launched the fifth Potter book. The reason, according to my source at London’s Bloomsbury HQ, was that “…bankers and lawyers on the high street – older people – were rather embarrassed at being seen reading a book with a childish cover…”

An hour later, I went back downstairs to the Bloomsbury bookshop and asked Lucy what percentage of people pre-ordered the adult version over the children’s version – indeed, the adult version accounts for about 45% of the total sales – up dramatically from around 15% of total sales for the fifth book.

This shift, if you will, started me thinking about what could happen to Facebook – now with over 30 million active users – as its popularity with the older crowd grows. Will the net natives – Facebook’s core user base – revolt and jump ship?

Check it out – the latest monthly figures (June 2007) reveal that the number of visitors between the ages of 25 – 34 increased 181% while the number of visitors 35 years old an older increased by 98% – definite signs of traction from the moms and pops of the world.

Will it peak? Eventually, sure, but not for while. And, if anything, the madness has only begun to build. Wait to see what happens when word gets out that US-based venture capital fund, Bay Partners, has launched a fund targeting all those odd lot developers (most haven’t bothered to register as proper corporations) responsible for the 1,500 odd Facebook applications. Tsunami anyone?!

Let’s be frank – this attention – going mainstream – is exactly what investors and creators of the site want to see – it means higher advertising revenues, more functionality, and increased credibility (eventually, leading to a fat pay cheque – cha-ching). Nothing wrong with this, of course. The issue is – what happens when the kids lose control and the adults takeover? Is Facebook in for a face lift – are we going to see brand extensions – different covers?

I don’t know for sure what is going to happen however my gut feel is that Facebook is nearing its peak. One of the key drivers or attractions of Facebook was that fact that everyone’s identity is real – that is why I use it – I actually “know” the person I’m talking to – or sending crap to – in many ways, the friends on my page are the same people I’d call up for drinks or share a joke with – it is purely social (i.e. I’m not looking to network – business cards…be gone!). However, the more random openness of the site the more opportunity there is to dilute this “real identity” flavor.

It just seems to me that when the kids discover something fun, unique and, well, pedestrian, the adults come in and institutionalize the damn thing – effectively, sanitizing the juices and mojo that shaped the community in the first place. How many kids/students want to hang out with random adults? None. How many kids/students want their parents looking at their drunk partying photos? None.

Unlike a Potter book, you can’t appeal to a wider user demographic by changing Facebook’s cover – the heart and soul of the site rests in the content provided by the members not a single author. So, no, I don’t think the answer is to have an adult version and a children’s version – the answer is, “mom, dad, you can look…I let you…but don’t touch!”

Ethan Smith from the Wall Street Journal filed an article titled “Listen to music free, buy pay to carry” which is about a new Palo Alto, California-based music distribution portal called Lala Media Inc. The way the service works is that visitors to Lala.com can listen to streamed music (through a normal web browser) from Warner Music’s digital catalogue for free however if they so desire to download and cart the music away they must purchase an entire album. Smith writes:

“It’s like a subscription music service, but without the monthly subscription fee. Lala is betting that in return for getting all that free access to music at home, listeners will pay to buy the songs they want to take with them on iPods and other music players. Lala, whose owners include Bain Capital…is underwriting thr free offering by paying major labels $6 to $8 a user each month, about the same wholesale rate paid by online music subscription services like RealNetworks Inc.’s Rhapsody.”

To be fair – it is a clever idea. I particularly like the site as a music “discovery site” and the way the platform is device agnostic (i.e. mobile phone, iPod, etc). Though that is where my love affair with the site comes to an abrupt halt. What bothers me is that the music is streaming, quality is poor, you must purchase the complete album, and you’re still beholden to some form of DRM.For the record, I’m coming at this proposition slightly biased in that we have been working with Beijing-based Feiliu Media for several months now as they prepare to launch their content platform in September at Tsinghua University in Beijing, PRC.Feiliu’s business model is quite unique in that it not only provides a blanket content license on its content catalog but also tracks content usage – thus allowing users unlimited freedom to share music, video, etc while fairly compensating content providers.We believe the hidden gem in this platform is not so much in the “professional” or “industry” generated content, but rather in user generated content – to whit, Feiliu will be the first platform in China to compensate students, bands, whoever, with cold hard cash for their original work. Quite frankly, this is going to turn the business of collecting user generated content on its head – how can China’s incumbent video blogs, file sharing, and content aggregators compete with a site that pays users for their content? They can’t because they neither track usage nor earn an upfront fee from end-users – all existing sites are ad revenue models which are highly dependent on a high volume of free content.Feiliu’s CEO, Eric Priest, elaborates:

“On the music side, we deal only in full-track downloads, which no one has ever been able to make any money from in China, so most don’t seriously pursue that business. We don’t do ringtones at all, and we don’t add another intermediary to the existing online structure of SPs, etc. We’re a complete platform that deals exclusively with internet service providers (of which there are three in China: CERNET, China Netcom, and China Telecom). Our licensed content is served up via our platform and user interface with loads of rich value-added features like recommendation engines and social networking tools to help people discover new media.We serve up not only music but video and documents as well, including educational materials (English lessons, Harvard lectures, TOEFL classes, etc.). We provide this complete platform for a small fee bundled into every user’s monthly ISP access bill, so we are paid by the ISP, not the user. In return, we license the whole network to freely download and share the content in our system. In order to fairly divide our content revenue pool among copyright owners, we count not just downloads but also plays and copies of each media file, accumulating the most detailed and extensive data on user media consumption in the world. End users can upload user-generated content into our system, promote it among their peers through our platform, and get paid a portion of total revenues for each time the media is watched or listened to. Imagine how important that feature will be on college campuses among bands and student filmmakers.”

In short, Feiliu provide ISPs with the technology and licensed content to serve up all the best content in exactly the way users want it–high quality, reliable, fast, no technological restrictions, in an attractive online environment that helps you smartly navigate content and discover new things you like. What if users prefer to download their content from illegal sites and use a player different from ours? No problem. They are still paying the bundled content fee to the network, which Feiliu still collects and distributes to copyright owners, and Feiliu can still log those users’ content usage because their counting technology is entirely player agnostic, and they need not get the file from Feiliu. Once they have it, Feiliu ID it, count it, and pay the copyright owner.We’re confident there’s no one in this space doing anything close to this business model.

Man-o-man have we received a ton of b-plans pitching video sharing sites over the past couple of weeks. By last count there are no fewer than 50 such sites in the US alone; and since barriers to entry are so low making a move in this space is challenging. However, here are four criteria we want to see even before we will consider your venture:

(1) Destination – #1 spot, #1 spot, #2 spot (if you also own the #1 spot)

(2) Captive audience – size does matter (“super size me”), but so does their length of time on the site

(3) Rich content – audience contributes content as much as they consume

(4) Control – clear, functioning copyright and mature content control/policy

USAToday reports that Toshiba, a Japanese electronics company, has developed mobile-phone technology that searches for product reviews on up to 100 Web journals, or blogs, in 10 seconds.

Although, there might be issues of trust (commentary) and accuracy (data), we like this concept very much and will be following its development closely.

In the same breath, there is a small Shanghai based venture called Kaible.com that is backed by Dragon Venture that does something similar, however its offering focuses on price comparison.

We are not a big fan of Kaible’s model as it’s less dynamic (real time pricing) and completely dependent on the participation of merchants providing reliable, truthful data. Furthermore, we don’t see the value in it for the retailers — why would they want to reveal pricing to their competition. And finally, anyone who has shopped in China knows plenty well that haggling (over the price) between customer and clerk is more the norm than the exception – how does Kaible account for this?

(One approach might be to encourage consumers to SMS/Email Kaible with price information in return for loyalty points, or a chance to with gift certificates – however the most powerful driver would be community.)

First, the creator of the MillionDollarHomepage went to ebay to auction off the last 1,000 pixels which sold for US$40,000

And, now it is RocketBoom’s turn…

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.

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.

This weekend, I was listening to last week’s Microsoft Live Windows press conference and somehow ended up playing around with Google Video… then it occurred to me that there must be a website that maps Flickr’s functionality to videos

…and so I started digging and came up with a lot of these sites, here are some of them:

Clickshack.com
gabbr.com
blip.tv
Castpost.com

I also read on Flickr’s blog that they will be adding video capabilities in the near future…

I am wondering how these sites will differentiate themselves from one another? Features? Community? Branding? Content? All these answers are so generic and yet spot on…

You know what? This started out as a platform play but it is quickly shaping up to be a drag race…

I’m late to the party, but I just started messing around with digital photo sharing site, Flickr.com, a month ago. Shame on me, I know! For those of us isolated in China who missed Flickr here is an overview of the company:

Launched in 2002, Flickr has grown along with digital camera sales and has helped popularize tagging. Named “Breakout of the Year” at the 2005 Webby Awards, the community now numbers 37 million photos and 1.2 million members, many of whom are considered to be among the web’s most creative image makers.

In March 2005, Yahoo purchased Flickr for US$25 – 30 million. Obviously, this is old news, so why dredge it up from the depths of Internet past? Good question!

The answer can be summed up in one word: DEMAND

Until very recently, there was no demand for Flickr in China, however, Bokee’s US$10 million funding changed all of that; and now, blogging, Web2.0, RSS, tagging, Wiki, etc are terms even Central Party officials recognize. Soon to follow will be hundreds of ventures claiming to be Flickr with Chinese characteristics – I already have a dedicated Flickr Thunderbird folder.

In anticipation for this event I thought it worthwhile to chat with some of Silicon Valley’s top venture capital funds and bloggers and ask them to share with us the reason Yahoo purchased Flickr. Thanks to everyone who replied.

Brad Feld from Mobius Ventures:

Why did Yahoo purchase Flickr?

1. The technology – while not hugely complex – was implemented really well and had a lot of very happy users.
2. The user adoption was incredible and growing very quickly.
3. The price was relatively inexpensive (around $25m – $30m) for something Yahoo felt it needed.

Basically, it is all about the community, technology player a very minor role, yes?

Yup – there are loads of [companies developing similar photo sharing technology] out there. The thing Flickr did was create a huge and rapidly growing community

Rob Scobles, Technical Evangelist, Microsoft

Why did Yahoo purchase Flickr?

For me, Flickr’s interface (tagging) and RSS integration were way ahead of anyone else, but really it was the community that made it impressive. Community is important. It’s why eBay is a huge business today

Takeaway: Scale that community, or bail!

We’ve been supporting a company called YDC Tech for the past year — the group has developed a search engine specifically targeting quarries in Chinese — the technology incorporates algorithms used in genome sequencing. So when a new search technology hits the air waves it peaks our interest

This morning, a new tag meta-search engine called gada.be was launched in Seattle; the two guys behind it are Chris Pirillo and Shayne Sweeney. The technology allows you to search for stuff by either going to gada.be or typing in your search quarry into that white address box in browser; for example, want to find “Chinese dog food” — simply enter the following http://chinese-dog-food.gada.be

The way gada works is by cruising lots of different sites such as Google, Flickr, Yahoo!, etc and collecting all relevant information in a permanent URL; and so becomes a comprehensive result set for a tag link. Gada also outputs search results in RSS and OPML, allowing users to easily subscribe to and organize searches. Founder, Chris Pirillo, talks below about how this is perfect for mobile search:

“It was borne out of several frustrations. If you’ve ever tried to visit a Web site over a mobile device, you know it’s a pain in the knuckle. The domain had to be simple to key-in from anywhere. gada.be is 4232.2233 on most cell phones and PSPs. Normally, when you want to find something online, you have to choose a Web site (wait for the page to load) enter the query (wait for the second page to load) then see results from that provider. With “gada.be,” you insert the query *AS* the subdomain!”

I just want highlight this tagging thing…it has been around for a while however it has only caught on over the last couple of years…I think the best hope for a semantic web will come as a function of tagging. In the US, there is a company called del.icio.us that has been around for 2.5 years, Union Square Ventures recently seeded the company, and is at the forefront of tagging.

Back to Mobile Search: …in China we already have a couple, such as start-up Cgogo.com, which offers mobile search to China Unicom and China Mobile. Cgogo claims its technology uses “fuzzy search and concept clusters rank algorithms”, grouping results in “concepts.” I’ve used Cgogo a couple times and, to be honest, it doesn’t work very well…

Another mobile search service is called Guanxi which is based in Shanghai. It is an okay service, however their database is limited to restaurants, clubs and entertainment venues only in Shanghai — sort of narrow. Guanxi is a service provided by a company called Mailman, which is one of several postcard distributors in town. I understand they are looking for angels to help them expand this service nationwide in 2006…