Different from many other industries, the Internet and mobile Internet are just like catfish. Their growth rate not only dazzles us but also stirs up the whole fishpond. One industry after another has been changed and even subverted by the creation and growth of the internet.
How do we understand the characteristics of the Internet? Also, how can we more deeply comprehend the relationship between the Internet and traditional industries?
The 20th of December 2013 witnessed the 20th anniversary of the National School of Development (NSD). This was also the 15th anniversary of BiMBA (Beijing International MBA at Peking University). For this occasion there was a series of lectures, called Langrun Management Frontier where heavyweight entrepreneurial genius of Sina Corporation, Wang Zhidong, also CEO of Beijing Dianji Technology Co. Ltd was invited to share his experiences. His lecture entitled ? Internet Reverts to Tradition and also Subverts Tradition ? lasted for more than 2 hours.
It is what we created. The Past and Present of Sina.com
What did the Internet discover? This is the first question that Wang Zhidong posited and considered with us.
In 1995, Wang Zhidong had just gotten familiar with the Internet. This was also the time when the Internet was made available in China. Three years later, he began to use the internet for business, becoming one of the earliest pioneers of Internet industry. In 1998, he rendered a great service when he opened up his business in Silicon Village with his team “Stone Rich Sight Information Technology Ltd (SRS)” and purchased Sinanet.com
“I had a sense of foreboding that the Internet represented and even influenced the future, which was a good opportunity. But neither of us knew how to do business with the Internet. So we went to the Silicon Valley to acquire experience, because the Internet had made its way to the Silicon Valley.” said Wang Zhidong.
Sinanet.com was the biggest Chinese website in the United States at that time. When Stone Rich Sight Information Technology Ltd (SRS) merged with Sinaet.com, Sina.com appeared on the 1st of December 1998. At this time there was a new team, new website, new market; everything had taken on an entirely new look. However, this was only the very beginning.
“After the takeover, we sat together to have a meeting. Suddenly we realized that in fact all of us were muddled up.” Wang Zhidong pointed out, in order to exploit a unique way for Sina to survive; we studied Yahoo as a reference, which was a success at that time. We established the website pattern of Sina in China, which was the mode of “3+2”, namely: search, news, community, plus games and sports.
“At that time, Yahoo oriented itself to be a ‘portal’. And we had discussed for several days, but we failed to figure out what a ‘portal’ was. We decided to ignore it because we didn’t know much about it, much less its users. We only considered what services and products we could provide, and what experiences we could take to users; We focussed on these elements and succeeded. ”
The growth of a successful enterprise requires decisiveness and courage. Looking back, Wang Zhidong said with much pride, “What is a ‘portal’? We made it what it is, which is the advantage of early entrepreneurs. We can define the market and the new concept.”
When the basic framework was set up, it was the time to determine the major content. At that time, all websites devoted themselves to being search engines. However, Wang Zhidong had a low opinion of this approach because he “didn’t want to fight with other companies”. Besides, there was less Chinese content to be ‘searched’ 15 years ago. News was considered as the main content of Sina.
At the time, there were many obstacles and many more risks domestically in the Internet news business. For example, they couldn’t get the qualification of a news collecting and editing agency, nor did they have their own reporters, and they would encounter copyright issues if they copied articles left and right. After deliberate consideration, Wang Zhidong was determined to continue on this road of internet news coverage. High risk is an obstacle. Difficult as it was to surmount, it also obstructed many powerful competitors.
After calm consideration, Sina decided to focus on news and followed the way of “Network Digest”, which had a special solution to solve copyright issues. They oriented themselves to “cater to Chinese people around the world”, and successfully bypassed many obstacles, winning their own survival and development space.
“In that era, Chinese people had a large demand for the news. Our main characteristic was ‘quickness’. We could focus on the breaking news, which newspapers, TV shows and broadcasts had no chance to publish and which was inconvenient for them to publish. We scrambled for this kind of news, which a certain group of people would be very interested in, (not all Chinese are interested, but a certain portion of the population). Gradually, we conducted in-depth research on this ‘news’.”
Afterwards, Sina took full advantage of celebrities, and gathered a large quantity of bloggers and micro-bloggers, becoming the Sina which we are familiar with today.
“Looking back, I think everything in Sina was done following the way of news. Even though it seemed to be a portal, actually it is a typical news website. Games, education, blogs, and micro-blogs followed the way of news.”
The growth history of Sina.com answered his question. But what has the Internet discovered and what has Sina discovered?
“Sina.com and the news on Sina rediscovered transmission.” Wang Zhidong said, with the advent of Sina, the mode of transmission for news and free press has changed.
For a population of 500 million ( statistic from the database of Sina.com, from Feb. 20, 2013) Sina micro-bloggers in China, what he has said is not exaggerated.
Subversion of the old is not tradition but rather answering to the tradition of market competition.
Wang Zhidong stood on the platform, with the audience standing off the platform in every corner of the classroom. Some of them were students; some were his followers who were attracted there to listen to his lecture and who wanted to make a difference in the Internet industry. The common question, which all of us were interested in, is what opportunity we could get from the Internet industry.
This required answering Wang Zhidong’s second question: What is the commercial mode of the Internet? Why can it make money?
Different from other people, Wang Zhidong, while looking back upon the successful wave of Internet giants, believes that the root cause contributing to their success was neither a dazzling new concept, such as B2B and B2C, nor supernatural insight. It lies in the fact that every website analyzed the demands of a target audience and returned to tradition.
“Take Baidu as an example, what is the essence of Baidu from the traditional point of view? If you don’t know, you can think about it in another way. What is replaced by Baidu? You will find that the powerful search function and storage of knowledge has taken the place of libraries.”
If Baidu is a huge online library, by analogy, Taobao is actually an “online market”, which combines the trust mechanism and incorporates a large quantity of resources. At the very beginning, Ctrip could only realize online ticket sales. (After clients placed an order, a salesmen had to deliver the tickets to clients’ homes and asked them to pay in cash.) After improving their online system of pay and delivery, Ctirp turned into an excellent “online travel agency”; at first, Tencent oriented itself as the “ICQ”, which was its original operation mode — “QQ Telecommunication”. Video websites, represented by Youku.com, is struggling to explore their profit pattern. In fact, they are all online televisions. The “tycoons” left are absolutely clear to see. JD.com is an online market place; yhd.com is an online supermarket; Shanda Games is an online game center; 360.com is a computer technology service provider.
The profit patterns, which are described as “subversiveness”, can be reflected in traditional daily life. What is subverted is not tradition, but competitors who still make use of traditional ways in their new products.
“Actually, new economy is also a kind of economy. The Internet is a kind of business, which should follow various laws in doing business. When we step into the Internet industry, we should not be confused by all kinds of new concepts and terms. Don’t think new economy means subversion of tradition and replacement of the original economy. As a matter of fact, all successful Internet companies have a counterpart in traditional industries. The difference only lies in the fact that Internet companies take more advantage of methods, technology and patterns of the Internet industry, when they do the business of traditional industries than compared with traditional competitors. It is in this way that they bring their superiority into full play and then achieve their success.”
At last, Wang Zhidong showed us the real “subversive value” of the Internet. That is the incessant “Enclosure Movement”, transformation of profit model and power of information integration by network. Just like Sina integrated news, Baidu integrated information, Alibaba integrated supplies and demands, and Tencent integrated relationships. If the power of people and various resources are integrated together, an amazing large-scale effect will occur.
Wang Zhidong thought that in constant “regression” and “subversion”, the Internet entrepreneurs should learn to “cope with shifting events by sticking to a fundamental principle”. This insightful mode of thinking will definitely bring about the biggest wealth in the future.
About Wang Zhidong
Mr. Wang Zhidong graduated from the Department of Radio-Electronics in 1988, was the founder of Sina.com, and the developer and chief designer of some famous Chinese platforms, such as BDWin, Chinese Star, and RichWin. He lead teams of Sina.com to become the biggest Chinese portal, and in 2000 it was successfully listed in NASDAQ. Having been engaged in the Internet industry for 15 years, he was once granted with a series of awards and honors, such as part of the “Top 10 leaders of China’s software enterprises”; “TOP 10 China’s Technology Leader”; “Top 50 influencing informatization”; an “Outstanding Contribution Award for 20 years in China’s software industry”; ”China’s IT Innovation Award” etc.
Introduction of Langrun Management Frontier Lecture Series
This series was one of the lecture series for the celebration of the 20th anniversary of the National School of Development in PKU and the 15th anniversary of BiMBA. The core purpose of the series was to share and discuss frontier issues, experiences and lessons from enterprises attempting to survive and develop. It provided true case studies for MBA students and alumni to discuss and learn through. Previously, many lectures were held. Please see related reports in the following link: http://20y.nsd.edu.cn/lr/gl/index.html.
