Tag Archives: Microsoft

Get the latest financial and business news of Microsoft in China, overview of Business expert Doug Young based in China (Shanghai).

News Digest: May 26-28, 2012 报摘： 2012年5月26-28日

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The following press releases and media reports about Chinese companies were carried on May 26-28. To view a full article or story, click on the link next to the headline.

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◙ Chinese WTO Suit Strikes Back at US Duties (English article)

◙ Alibaba.com (HKEx: 1688) Shareholders Approve Privatization Proposal (Businesswire)

◙ Nokia Siemens Accuses Huawei of Plagiarism in Promotional Materials (Chinese article)

◙ Microsoft (Nasdaq: MSFT) to Build Cloud Data Centers in China (English article)

◙ Ming Yang Wind Power (NYSE: MY) Announces Preliminary Results for Q1 (PRNewswire)

Microsoft E-Commerce: Late to the Game Again 微软进军中国电商市场最终或以失败收场

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I suppose I should congratulate Microsoft (Nasdaq: MSFT) for finally realizing the huge potential of e-commerce in China, even though it’s quite late coming to this incredibly competitive space. Then again, no one will ever accuse Microsoft of being a leader in anything these days, as this company is clearly a follower that takes advantage of its dominant PC presence with Windows to force its way into other product and service areas developed by nimbler, more innovative companies. Chinese media are reporting that Microsoft, through its MSN platform, is planning to enter the crowded e-commerce space in China following the recent end of beta testing for its Chinese-language Bing search engine. (English article) The company didn’t provide any details, but it sounds like the new e-commerce platform will be somehow integrated with Bing, as well as Microsoft’s Windows platform that is also the dominant PC operating system in China, similar to the rest of the world. First off, I have to say that I’m amazed that Bing in China is just finishing up its beta testing, as Microsoft launched the site 3 years ago. Clearly it wasn’t fast-tracking Bing in China, which is obvious from the fact that the search engine is still a non-player in the market, similar to its status in the rest of the world despite Microsoft’s putting large resources into this key Internet area dominated by Google (Nasdaq: GOOG) globally and local search leader Baidu (Nasdaq: BIDU) in China. But let’s take a rest from my sarcasm about Bing, and turn my attention instead to this ludicrous new e-commerce initiative. I use the word “ludicrous” not because e-commerce isn’t an area filled with huge potential, but rather because Microsoft will stand little or no chance of success because the space is already so crowded with other much bigger names with far longer histories in the area. In terms of actual numbers, China’s e-commerce market was worth 500 billion yuan in sales in 2010, or nearly $100 billion, and is likely to hit the 1 trillion yuan mark by 2015 if current growth trends continue. But much of that growth has been fueled by a crowded field of both home-grown and international players who will be formidable rivals even for Microsoft. Just to name a few, the former category includes industry leader Alibaba, along with challengers Jingdong Mall, Suning and Dangdang (NYSE: DANG). In the latter category, retail giants Amazon (Nasdaq: AMZN) and Wal-Mart (NYSE: WMT) are both making aggressive pushes in the space, the former with a major expansion of its China website and the latter through its investment in another domestic player called Yihaodian. I’m not saying that entry at this late stage is impossible, as Microsoft does have some advantages that its rivals don’t have. But the lateness of this arrival, combined with the presence of so many well-funded, highly experienced rivals, make me fairly confident in saying that this new e-commerce initiative will ultimately end up a failure.

Bottom line: Microsoft’s new China e-commerce initiative is likely to fail due to its late arrival to the sector where it will face stiff competition from well-funded domestic and international rivals.

Related postings 相关文章:

◙ E-Commerce: Dangdang CFO Goes, Suning’s New Trip 当当网首席财务官请辞 苏宁进军在线旅游业

◙ China: Room for How Many Amazons? 中国电商市场到底有多大？

◙ Dangdang Loss Balloons In E-Commerce Wars 当当网在电子商务大战中亏损严重

News Digest: May 23, 2012 报摘： 2012年5月23日

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The following press releases and media reports about Chinese companies were carried on May 23. To view a full article or story, click on the link next to the headline.

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◙ Microsoft’s (Nasdaq: MSFT) MSN China to Launch E-Commerce Business (English article)

◙ Qihoo 360 (NYSE: QIHU) Reports Q1 Unaudited Financial Results, Appoints Co-CFO (PRNewswire)

◙ Nissan (Tokyo: 7201) Aiming For 10 Percent of China Luxury Car Market (English article)

◙ China 3G Users Reaches 159 Mln, New Subscribers Hits New Low in April (Chinese article)

◙ Camelot Information Systems (NYSE: CIS) Announces Unaudited Q1 Financial Results (PRNewswire)

Tencent in Monopoly Spotlight; Baidu Next? 腾讯被诉垄断 下一个是百度吗？

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An important trial has just begun in southern Guangdong province, testing China’s young anti-monopoly law and its legal system in a case that could spell big headaches for leading Internet firm Tencent (HKEx: 700). Analysts also point out the case could have a domino effect for other areas where a single company dominates the Web, with online search leader Baidu (Nasdaq: BIDU) perhaps the most vulnerable to a similar lawsuit. But let’s look at the Tencent case first, as that’s the main point here. Perhaps appropriately, the case is being bought by Internet software company Qihoo 360 (NYSE: QIHU), a seasoned veteran with litigation in China, having been sued numerous times by others, including Tencent, and also filing numerous lawsuits of its own against rivals. This latest case has Qihoo suing Tencent for monopolistic practices in the instant messaging space, claiming Tencent’s wildly popular QQ service has a virtual lock on the market. (Chinese article) The case, which began on Wednesday morning，has Qihoo seeking 150 million yuan, or about $24 million, in damages. Chinese courts rarely award that much money due to legal restrictions, but even if they did such an award would be trivial to a company like Tencent that has a market cap of $56 billion and a huge cash pile. Of course the much bigger threat is that the court will determine that Tencent does indeed have an instant messaging monopoly, which it has used to quickly gain dominance in other Internet spaces such as online games. From my perspective, Qihoo’s case does indeed look convincing, as Tencent currently controls more than 70 percent of the instant messaging market. I personally don’t use QQ, but in my experience the only other platform that has any users at all in China is Microsoft’s (Nasdaq: MSFT) MSN, whose service is basically just a copy of its global product and is far less popular among Chinese users. A court ruling against Tencent would be interesting for a number of reasons, all of which would obviously be bad for the company. Qihoo and others are clearly interested in seeing the court order Tencent to de-link QQ from its other initiatives, as that would seriously hamper the company’s ability to take advantage of its massive instant messaging user base to quickly develop into other areas like search, online video and e-commerce. But the court, if it rules against Tencent, should also take steps to break its instant messaging monopoly, which is what the anti-monopoly rule was designed for. Of course, if the court rules against Tencent the next major target would be Baidu, which also controls more than 70 percent of China’s search market, the legal definition for a monopoly. Accordingly, China Internet watchers and investors should be paying close attention to this case, which could have big implications for both Tencent and Baidu stock.

Bottom line: Tencent will suffer a big setback if a court rules it has a monopoly in instant messaging, potentially paving the way for a similar lawsuit against Baidu.

Related postings 相关文章:

◙ Tencent Search: Baidu Beware? 腾讯搜搜成功关键依赖创新

◙ Search Wars Heat Up With Latest Anti-Baidu Moves 中国网络搜索战升温

◙ Baidu’s Strong Growth Underwhelms 百度业绩持续强劲增长将投资者期望抬升过高

News Digest: April 14-16, 2012 报摘： 2012年4月14-16日

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The following press releases and media reports about Chinese companies were carried on April 14-16. To view a full article or story, click on the link next to the headline.
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◙ Qihoo (NYSE: QIHU) Anti-Monopoly Lawsuit Against Tencent (HKEx: 700) to Start April 17 (Chinese article)

◙ Renault (Paris: RENA), Dongfeng (HKEx: 489) Sign Outline China Deal: Sources (English article)

◙ iCafe8 (Shenzhen: 300113) to Acquire Shanda Subsidiary Jisheng (English article)

◙ China Mobile (HKEx: 941) to Launch Commercial 4G Network in Hong Kong in Q4 (Chinese article)

◙ Microsoft’s (Nasdaq: MSFT) Leung Quits as Head of China, Prompting Reshuffle (English article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

Nokia Bets on China Telecom 诺基亚联手中国电信

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The arrival of spring in China is bringing in a sudden surge of tech and telecoms VIPs, no doubt salivating over a market with more than a billion mobile subscribers and 500 million Internet users and growing. First came Apple (Nasdaq: AAPL) CEO Tim Cook, whose visit has included courtesy calls on the nation’s 3 telcos as well as his most recent visit with vice premier Li Keqiang, tipped to become the country’s new premier next year. Now he’s being followed by Nokia (Helsinki: NOK1V) CEO Stephen Elop, who has attended a high profile Beijing event to announce the launch of company’s first smartphone in China using Microsoft’s (Nasdaq: MSFT) latest Windows mobile operating system. (English article; Chinese article) But wait — there’s more. Apparently none other than Facebook founder and chief executive Mark Zuckerberg has also been sighted in China, visiting my own city of Shanghai just a month before the company prepares to make its multibillion-dollar IPO. I already talked about Cook’s visit yesterday (previous post), so will focus this time mostly on Elop and Nokia, which used to dominate the China cellphone market but has seen its share drop sharply in the last 2 years, mirroring a global trend. Elop is hoping to reverse the slide by retiring Nokia’s old operating system and betting on Windows new mobile OS.  I found it both interesting and intriguing that Nokia has chosen the smallest of China’s 3 mobile carriers, China Telecom (HKEx: 728; NYSE: CHA), as partner for the launch of its first Windows-based smartphone in China, rolling out a Lumina model that will run on the carrier’s 3G network based on a technology called CDMA EVDO. The gamble on China Telecom looks like a smart move to me, as this telco is clearly the more aggressive and better organized of China’s 2 major carriers that use global technology in their 3G networks. The other company, China Unicom (HKEx: 762; NYSE: CHU), has been plagued by operational and management issues; and China’s third major telco, China Mobile (HKEx: 941; NYSE: CHL) uses a homegrown technology that most major developers have shunned so far. By signing up with China Telecom as its first partner, Nokia can be assured the carrier will give its phones special attention, unlike Apple’s iPhone, which is now offered by both China Telecom and Unicom. China Telecom has said it hopes to add 50 million or more 3G users to its network this year (previous post) as it aggressively chases the market in its drive to steal share from its other 2 rivals. Obviously Lumina phones will account for only a small portion of that, assuming that Chinese consumers like them. Still, that could translate to 3-5 million handset sales if the models prove popular. Meantime, here’s just a quick take on Zuckerman, who was seen shopping with his girlfried in Shanghai’s trendy Tianzfang district. (Englilsh article) The reports say Zuckerberg said he was on vacation, and I believe that’s probably true, since he was in Shanghai and not Beijing and he has much bigger issues at the moment with his company’s upcoming IPO. But he clearly still has his eye on the China market, and I wouldn’t be surprised to see him make another more formal China visit sometime later this year after the IPO.

Bottom line: Nokia’s pairing with China Telecom for its first Windows smartphone launch in China looks like a smart move, with sales of up to 5 million units possible this year.

Related postings 相关文章:

◙ Nokia Looks For Fresh China Start With New Country Chief 诺基亚中国区新官欲扭颓势

◙ China Telecom Turns Up Volume in 3G Drive 中国电信计划一鼓作气 3G市场欲再下一城

◙ Nokia Facing China Backlash After Years of Dominance 诺基亚手机在华“失宠”

E-Commerce: 360Buy Explores IM, Wal-Mart Gets Serious 京东商城内测即时通讯工具,沃尔玛有意控股一号店

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There are a couple of interesting tidbits from the e-commerce space today, with 360Buy reportedly making a dubious move into instant messaging, as Wal-Mart (NYSE: WMT) prepares to boost its online presence by taking control of its Chinese online partner, Yihaodian. Let’s look first at 360Buy, also known as Jingdong Mall, which has reportedly developed an instant messaging product that it will launch later this year, according to Chinese media reports. (English article) If you had asked me 10 years ago about this move, I would have said that maybe it looked smart, as online shoppers and merchants should theoretically enjoy chatting with each other about their latest favorite products, discounts and so forth, just like any other community. The problem is, online auctions leader eBay (Nasdaq: EBAY) tried just such a move with its purchase of IM specialist Skype in 2005, in what looked like a logical move at the time. Of course, industry watchers will know that move ended in disappointment with eBay selling Skype to Microsoft (Nasdaq: MSFT) last year after failing to reap any synergies from the company. The case here is a little different as 360Buy is a B2C specialist whereas eBay is C2C. But I see no reason why the result will be any different, especially as 360Buy’s IM product will face stiff competition from existing offerings like Skype, Microsoft’s MSN Messenger and Tencent’s (HKEx: 700) popular QQ service. In the other news bit, financial services group Ping An is getting ready to sell some or all of its large stake in online retailer Yihaodian, with Wal-Mart lining up to buy more shares to become the company’s controlling stakeholder, Chinese media are reporting. (Chinese article) Wal-Mart already bought an undisclosed minority stake in Yihaodian last year (previous post), and has made it clear it intends to become a major player in Chinese e-commerce, after largely losing out in its home US market to big names like Amazon (Nasdaq: AMZN) due to its initial dismissal of the potential of online retailing. Yihaodian has already begun to boost its activity following Wal-Mart’s initial purchase, and look for it to become even more aggressive after the world’s biggest traditional retailer takes control, adding even more pressure to a space plagued by rampant competition and non-ending price wars.

Bottom line: 360Buy’s new instant messaging product is bound to fail, while Wal-Mart will add even more competition to the overheated e-commerce market by taking control of Yihaodian.

Related postings 相关文章:

◙ 360Buy Heats Up E-Books, People’s Daily Goes to Mkt 京东商城高调进军电子书,人民网开启上市进程

◙ Wal-Mart Buys Into China E-Commerce 沃尔玛进军中国电子商务

◙ Price Wars Beat Up Online Retailers 网上零售商引爆价格战

Bristol-Myers, EMC Tap China Priorities With New Tie-Ups　　趁中国政策导向东风 百时美施贵宝与EMC联姻本土企业

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A couple of new tie-ups involving major foreign players in pharmaceuticals and computing provide an interesting glimpse at how multinationals are trying to target their China initiatives to be in sync with Beijing’s latest policy agendas. The strategy of working with a local partner isn’t all that new, but in this case what’s more interesting is the targeted approach these two new tie-ups are taking, the first aimed at taking advantage of China’s ongoing massive overhaul of its healthcare system and the second at Beijing’s push to become a leader in cloud computing. Let’s look at the pharmaceuticals deal first, which is seeing Bristol-Myers Squibb (NYSE: BMY) teaming up with local drugmaker Simcere Pharmaceutical (NYSE: SCR) to make and sell a cardiovascular compound in China. (company announcement) The compound was developed by Bristol-Meyers Squibb, but Simcere will make and sell the drug in China, drawing on its strong connections to local regulators and other health care officials. This kind of deal is smart as it gives Bristol-Myers exposure to a coming boom for quality medicines as Beijing signs a series of multimillion-dollar deals to make those drugs available under its ongoing overhaul to make basic healthcare affordable for everyone. The second deal will see faded PC firm Great Wall Computer form a cloud computing joint venture with EMC (NYSE: EMC), the world’s biggest maker of data storage devices. (Chinese article) China has repeatedly said that cloud computing will be a major focus for development in the next few years, prompting a wide range of players to get in on the action, including Huawei and Alibaba. I see no reason why a big western name like EMC should try to get a piece of the action, and indeed, Microsoft (Nasdaq: MSFT) made a similar move last month with its own China-based R&D initiative in the space. (previous post) My only cause for concern with EMC is that Great Wall is hardly a big name in China anymore, and it also has a strong legacy as a state-run company, meaning it might not be the best partner for this kind of venture that calls for a more entrepreneurial approach. But that said, at least I have to credit EMC for being foresighted enough to get into this space while it’s still in the formative stages in China.

Bottom line: New China tie-ups between Bristol Myers-Squibb and EMC with partners in their respective sectors look like smart moves to take advantage of Beijing’s latest development priorities.

Related postings 相关文章:

◙ Microsoft Looks for Place in China Cloud 微软投身中国云计算大潮

◙ Merck Finds Potent China Partner in Simcere 默克牵手先声药业

◙ Growth-Addicted Huawei Looks to the Cloud 华为渴求增长上瘾 着眼云计算

Microsoft Looks for Place in China Cloud 微软投身中国云计算大潮

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China is clearly excited about the prospect of cloud computing, as evidenced by the steady stream of big names like Alibaba, Huawei and Shanda (Nasdaq: SNDA) that have announced initiatives in the space this year. Now even Microsoft (Nasdaq: MSFT) is trying to get in on the act, announcing a major new cloud computing campaign for China. Whether any of these initiatives will ultimately work is another question, however, as China has yet to prove that it can lead in any major new technology like this. First let’s look at Microsoft’s latest initiative, which will see it build a cloud platform and trading center in the interior city of Chongqing. (English article) This comes just days after Chinese media also reported the NDRC, China’s state planner, had reportedly distributed about $100 million in subsidies for cloud-based initiatives. (English article) Since foreign companies are usually banned from investing in telecoms infrastructure like the kind necessary for cloud computing, Microsoft’s move looks designed to try and cash in on the trend from another angle, in this case from R&D that should enable it to work with other infrastructure developers. Huawei said earlier this year it was also holding out big hopes for the cloud (previous post), and Alibaba is placing a big bet on the technology through its Alicloud unit. With so much state support and some of the country’s biggest tech names behind this cloud push, perhaps one or two companies may eventually find a bit of success in the space, especially if they can team with big foreign names like Microsoft that have stronger technology. But as China has often shown in the past, it takes more than money and state directives to become a leader in a complex new area like the cloud, and I suspect that many of these initiatives will ultimately end up as failures, as major Western players ultimately develop the technology that takes cloud computing from the laboratory to the real world.

Bottom line: China’s aim to be a leader in cloud computing will produce lackluster to poor results due to its lack of experience in commercializing new technologies.

Related postings 相关文章:

◙ Growth-Addicted Huawei Looks to the Cloud 华为渴求增长上瘾 着眼云计算

◙ Shanda’s New Deal: Spinning Off Literature 盛大文学拟分拆上市

◙ Shanda Cloudary Returns to Market, Worth a Look

News Digest: November 29, 2011

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The following press releases and media reports about Chinese companies were carried on November 29. To view a full article or story, click on the link next to the headline.

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◙ Chow Tai Fook Seeks $2.8 Billion in Hong Kong Initial Offering, Terms Say (English article)

◙ E-House (NYSE: EJ) to Invest in Century 21 China Real Estate, Become Largest Shareholder (PRNewswire)

◙ Shanda Games (Nasdaq: GAME) Announces Special Cash Dividend (PRNewswire)

◙ Microsoft (Nasdaq: MSFT) to Build Cloud Platform, Training Center in Chongqing (English article)

◙ CNOOC Ltd (HKEx: 883) Completed Acquisition of OPTI (PRNewswire)

Inflated Qihoo Bounces Back on Hot Air

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After briefly considering a recent research report raising doubts about user numbers from Internet security software maker Qihoo 360 (NYSE: QIHU), investors seem to have brushed the information aside, preferring to believe the company’s hype. OK, I should probably be a little more fair and say that the recent bounce-back in shares for Qihoo, which I’ve previously criticized for its unethical business practices, was probably sparked by a strong earnings report this week that saw the company’s third-quarter profit nearly triple and revenues rise by even more. (English article) But what caught my attention were claims by the company that it now controls 57 percent of China’s Internet browser market, with about 235 million users. This sounded a bit high to me, as most people I know in China use more mainstream browsers from Microsoft (Nasdaq: MSFT), Mozilla and Apple (Nasdaq: AAPL). So I did a little analysis based on data for this site. According to that data, about half of the visitors to this site are in China. And yet the same data source says just 13 percent of visitors to this site use Qihoo’s browser. So assuming this site is roughly representative of the market, that means Qihoo browsers control just a quarter of the China Internet market at best, or less than half of what it claims. If the browser figure is so inflated, then I can only imagine how accurate Qihoo’s other numbers are. A report earlier this month from a small research house called Citron also called many of Qihoo’s Internet numbers into question, and said the company’s shares were extremely overvalued and should trade at about $5 per share, versus their price of $20 at the time. (previous post) Its shares briefly slipped about 15 percent to around $16.50 after that, but have come back following its earnings report came out and now trade around $17.60. I won’t question the authenticity of the company’s earnings, as I do believe they are probably honest for legal reasons if nothing else. But once Qihoo’s advertisers — who account for 73 percent of the company’s revenue — realize they’re not getting nearly the online audience that Qihoo claims, look for that part of the company’s business to drop considerably.

Bottom line: Qihoo 360 continues to post strong results on Internet user data that appears to be quite exaggerated, making it vulnerable to advertiser defections.

Related postings 相关文章:

◙ Report Takes Wind Out of Inflated Qihoo 奇虎遭遇Citron釜底抽薪

◙ Qihoo Goes to War With Mobile Browsers 奇虎360加强移动互联网布局

◙ Qihoo Loses Yet Another Lawsuit, But No One Cares 奇虎败诉不足为戒