INTERNET: Big Local Names, No Substance at Internet Pow-Wow

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Bottom line: The lack of news or attendance by major worldwide executives at China’s global Internet conference this week shows the country’s Internet remains relatively closed and under strict government control.

Global Internet pow-wow takes place in Wuzhen
Global Internet pow-wow takes place in scenic Wuzhen

I had big hopes for the second edition of China’s World Internet Conference happening this week in the picturesque town of Wuzhen, as all of the country’s top executives are in attendance at an event intended to showcase the country’s online prowess. The list of domestic executives in attendance certainly hasn’t disappointed, and many are undoubtedly there to network with China’s top Internet bureaucrats and President Xi Jinping, who gave this year’s opening speech.

But a look at some of the comments from names like Alibaba (NYSE: BABA) founder Jack Ma and Baidu (Nasdaq: BIDU) founder Robin Li turns up mostly empty talk, mixed with the expected self-promotion. What’s more, I also find the near-absence of any major foreign names from the conference somewhat puzzling, since China is trying to bill this as a global conference.

It’s hard to know what’s going on behind the scenes, though this abundance of pageantry without any major substance is quite typical in face-conscious China. The probable reality is that no one wants to upstage the big boss President Xi Jinping, who gave an opening speech detailing how China’s longtime censorship policies that date back well before the Internet are really just a form of protecting the country’s national security.

That contrasts with a lively onstage dialogue last month between Alibaba’s Jack Ma and US President Barack Obama at an event here in Asia, which produced an engaging discussion on how to support the entrepreneurs who form the backbone of the Internet community. Ma also gave a speech at this year’s China event in Wuzhen, though it was filled with mostly general talk about things like the need for transparency on the Internet.

Somewhat ironically, most of the latest big news about China’s “big 3” Internet companies, Alibaba, Baidu and Tencent (HKEx: 700), was related to places far from Wuzhen, showing just how irrelevant this event is.

Tencent, Alibaba Vie for Bona

One news bit saw Alibaba and Tencent engage in their latest of a growing number of clashes, with word that both had joined a group aiming to privatize US-listed film producer Bona Film (Nasdaq: BONA). (company announcement) Bona first announced the bid back in June, as part of a broader wave of privatizations of US-listed Chinesse firms due to low valuations on Wall Street. (previous post) But the joining of Alibaba and Tencent to the final buyout group is new and reflects a recent tug of war between the 2 giants for a dwindling number of attractive assets to buy with their big cash piles.

Baidu was also in the news, with media reporting the company was eyeing entry to Russia and might consider such a move with local Internet giant Yandex. (Chinese article) That news came from Robin Li in comments to Russian media that did come in an interview in Wuzhen, though the plans were obviously quite preliminary. Russia would certainly be a logical next step for Baidu, which has recently expanded beyond China into Thailand, Brazil and Egypt.

While the big China executives weren’t saying much of interest, the Wuzhen event was also notable for its paucity of foreign executives in attendance. In the extensive coverage of the event in the Chinese media, the only big foreign name I could find in attendance was Phil Libin, CEO of the popular note-taking app Evernote. (Chinese article)

I’m sure mid-level executives from many foreign Internet companies were also there, though it appears big China-friendly names like Apple (Nasdaq: AAPL) CEO Tim Cook, Amazon (Nasdaq: AMZN) CEO Jeff Bezos and Facebook (Nasdaq: FB) CEO Mark Zuckerberg were all absent. It’s impossible to know if these big names were simply not invited, or if perhaps they declined to attend due to political sensitivities. But regardless of the reason, the result is that this event wasn’t particularly international, nor was it particularly enlightening in terms of industry news and trends.

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