Weibo: Smartisan Hammered; Qihoo Hints Of Shake-Up

It’s rare that one issue dominates the blogosphere among the many tech executives who like to tweet about their companies on their microblog accounts. But the past week saw one such debate occur around a spat between 2 old friends in the smartphone space. In one corner was Luo Yonghao, a well-known English teacher who has recently moved into the highly competitive smartphone space. In the other was Wang Ziru, a self-styled gadget critic who has become quite influential. As many might guess, the debate centered on a recent critical review by Wang for Luo’s newly launched smartphone model under his Smartisan brand.

While the Luo-Wang spat kept the blogosphere well supplied with musings from a wide range of tech executives, a few other tidbits also provided some intriguing hints of things to come at other leading tech names. A couple of posts from Qihoo 360 (NYSE: QIHU) CEO Zhou Hongyi suggested that a major restructuring could be on the way; and separate musings from an executive at e-commerce giant JD.com (Nasdaq: JD) also hinted at potential similar moves.

Let’s begin our weekly round-up with the Luo-Wang spat, which became a sparring match between the older, more established Luo and up-and-comer Wang. Luo is a household name for many in China who have used his English language instruction materials over the years, whereas Wang’s rise as a tech critic has been much more recent.

Seeking to expand his horizons, Luo expanded into the competitive smartphone business with the launch in May of his Smartisan brand. (previous post) Banking on his academic and high-brow reputation, Luo sought to differentiate his phones from the many cheap models flooding the market by positioning them as a higher-quality, highbrow brand. That was reflected in the derivation of the company’s English name, which came from the combination of the words “smart” and “artisan”, and in the company’s logo as a craftsman’s hammer.

It seems that Wang wasn’t too impressed by Smartisan’s maiden model, the T1, and published a review that was critical of the smartphone’s hardware and performance. Needless to say, Luo wasn’t too happy and published a series of microblog posts expressing his displeasure. In one of the latest of those, he tells others who receive similar reviews to come and talk with him, and also hints that Wang may be accepting money in exchange for writing positive reviews. (microblog post)

The list of tech executives who weighed in on the matter is quite long, and most didn’t take sides but instead made relatively neutral observations. That list included Cheetah Mobile (NYSE: CMCM) CEO Fu Sheng (post); LightInTheBox (NYSE: LITB) vice president Lin Jiashu (post); Qihoo CEO Zhou Hongyi (post) and JD.com (Nasdaq: JD) vice president Xu Lei (post).

One executive who did slightly take sides was Li Xiang, the plainspoken founder of auto website Autohome (NYSE: ATHM), who defended Wang as an honest and upright man. (post) Frankly speaking, I also would probably tend to side with Wang, as I know that Chinese entrepreneurs often react very negatively to criticism of any type, especially when they think it is coming from someone of lower status than themselves.

That said, people like Wang Ziru are also known for their corruption, and similar individuals often build up reputations and then use their clout to earn money from companies in exchange for writing positive reviews. When companies refuse to pay for such positive publicity, critics also may do the opposite and write negative reviews.

From the Luo-Wang debate, let’s look quickly at the other interesting blog posts from Qihoo’s CEO Zhou Hongyi and JD.com vice president Xu Lei that both imply shake-ups could be coming at their companies. Among the pair, Zhou dropped the strongest hints in a series of 2 posts bemoaning the direction his company has taken as it has grown into a major corporation. In particular, he says, many people have lost their entrepreneurial spirit and become complacent as Qihoo has became a massive company worth more than $10 billion. (microblog post)

Xu’s post is a bit less direct, and largely reflects his thoughts on firing people. (microblog post) He recalls a recent conversation with a former colleague who said a manager isn’t a serious manager until he or she fires someone. There’s a bit of other firing-related musings in the post, and JD.com has indeed been “right-sizing” its workforce since its New York IPO in May and concurrent merging of its business with the e-commerce unit of strategic partner Tencent (HKEx: 700)

Both Zhou’s and Xu’s posts imply we could see some more layoffs and other restructurings in their companies in the months ahead as each tries to put itself on a solid long-term footing in the competitive Chinese Internet market. If that’s the case, look for each to make headlines and gossip columns as they try to recover their entrepreneurial spirit and rid themselves of excess fat, as they deal with the kinds of problems commonly seen at maturing companies.