I’m off to China on Sunday for the Fourth Annual Piper Jaffray China Growth Conference, March 6-8 in Beijng. I will be a panelist on "Emerging Internet Companies" talking about Maxthon. Piper Jaffray is known for organizing top events (invitation only) and judging from past events – this one looks very promising indeed with a great line up.
It will be a great opportunity for networking and potential Maxthon deals. Top executives from Chinas major Internet , Wireless, Game and Technology companies will be there. I am in particular interested in the Chinese focus group conversation, since I many times wonder what makes Chinese Internet users tick‘.
Following the conference I am meeting with Maxthon Fan & supporter No 1: Kaiser Kuo, rockstar & Group Director at Ogilvy Interactive in China, followed by a Maxthon boardmeeting. It will be great to meet Bill Tai (CRV), David Zhang, Yuzhu (WI Harper), Jeff and Carol (Maxthon) again – just hope it will not be as cold as the last time..
If you want to meet up in Beijing please let me know, schedule is quite tight – but long is the night..;)
Who knows, maybe I even will have time to shoot some cool Beijing street scenes?
Piper Jaffray just published a fat report called "The User Revolution: The New Advertising Ecosystem and The Rise of the Internet as a Mass Medium". Here are some of its key findings:
- We expect global online advertising revenue to reach $81.1 billion by 2011, representing a 21% CAGR (2006-2011).
- The User Revolution. The advertising world is going through a revolution, one that we call the "User Revolution" as it is happening primarily with the consumers, who are taking control of content consumption and branding. We believe this trend will cause a significant rise in prominence of the Internet as a major content consumption and marketing medium.
- "Communitainment." The Internet has increasingly become a principal medium for community, communication, and entertainment–three areas that have collided together and are impacting each other’s growth–generating a new type of activity that we call communitainment.
- The Internet Is Mainstream. The Internet has become a mainstream media outlet that now rivals traditional media for reach and advertising dollars.
- Media Fragmentation. The proliferation of online and offline media outlets has resulted in shrinking television audiences and an increasingly fragmented media landscape.
- The Golden Search. We believe search continues to gain ground, driven by the rise of search as the New Portal, the increasing use of search in branding campaigns, and the local search opportunity.
- We believe Google’s wide variety of non-search-related products creates a virtuous cycle of brand affinity that drives incremental search volume.
- Video Ads Could Drive The Next Wave. We believe Internet video ads could become a game changer for large brand advertisers, who are used to the 15- or 30-second TV commercial
- Internet Usage Patterns Are Changing. Portals maintain the highest reach, but the fastest growing category of destinations is communitainment sites such as MySpace and Facebook.
- Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding, and increased site visibility.
- Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.
- Companies to watch: Google (and YouTube), Yahoo!, Disney, News Corp, Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix, Wikipedia, MobiTV, Digg, and Hakia to be the most important players to watch.
Like my good friend Kaiser Kuo, Group Director for Digital Strategy, for Ogilvy China, mentions in this new (and great) blog " Ich bin ein Beijinger" : none of this should come as a surprise, but the report is full of eye-opening finding regarding the decline of TV viewing, changing viewing and decline of broadcast TV ad as percentage of total ad spend.
Kaiser who has a unique insight to China (and was very much responsible for Maxthon getting discovered and funded..) is confident that advertisers will flock to video ads and all the opportunities that are opening up for digital media advertising in China .However, he wonders how ready people really are for pre-roll commercials stuffed in to things they want to watch.
I tend to agree with Kaiser, although there is a fantastic opportunity for advertisers, the Internet savvy users might very well prefer to block ads if possible. This is something we have learned at Maxthon and seems to be especially true for Chinese Internet users. Al the sophisticated ad-blockers and filters that come pre-installed in Maxthon has definitely been one of the key driving factors for Maxthon success in China.
Anyway, next week I am flying down to Beijing again to talk on Piper Jaffrays Annual China Growth Conference on behalf of Maxthon. I will then have a chance not only to meet up with Safa and rest of the Piper Jaffray gang, but also to meet with Kaiser again and plot how we can deliver some interesting advertising opportunities together in China.
Thanks to Mark Pols for sending me this fat report!
Bonus: Video Interview with Kaiser I made just before he left the Red Herring.
Piper Jaffray summed up China’s 2005 Mobile Market Share, revealing these takeaways:
- SMS still remains a major revenue contributor
- KongZhong, Hurray! and Tom Online dominate WAP and are best positioned for the transition to 3G
- KongZhong and Tom Online are the most diversified players
Piper Jaffray held their third Annual China Internet & Technology Conference in Beijing last week. From the discussions & presentations held at the conference, the following key take aways emerged:
1. The economy is less of a risk, compared with last year
2. Leaders are emerging within the sector
3. Companies are more realistic about market opportunity and margin leverage
4. Regulation is helping moderate growth rate, preventing potential bubbles
5. New areas are emerging in blogs, social networking, etc.
6. Adoption of advertising and online medium by small businesses is increasing
7. Local companies enjoy home-grown advantage
Focus Media and Ctrip are emerging as leaders, Baidu and TOM Group as well. Baidu is dominating search and Google will have a difficult and uphill struggle in challenging Baidus domination. Online advertising is expecting to grow 35-40% during 2006 (an amazing oppertunity here). What I find particulariy interesting is the new areas that are emerging in blogs and social networking. According to Piper Jaffray, blogging is the big new trend catching on very rapidly. They also believe that it will continue to grow, and the existing players such as Bokee, Blog CN, Sina and surprise: MSN Spaces are likely to be market leaders. Other rapidly growing companies are: online match making, phone agencies and travel search engines.
Against this background I must say that Maxthon is very well positioned in China, we are already driving a huge percentage of Baidu’s search traffic, we are the second biggest browser in China and our user growth in China (as well as outside of) are just exploading.
Tags: Piper Jaffray Tags: China Tags: Internet Tags: Technology Tags: Focus Media Tags: Ctrip Tags: Baidu Tags: Tom Online Tags: Advertising Tags: BlogsTags: Social networks Tags: Bokee Tags: Blog CN Tags: Sina Tags: MSN Spaces Tags: Maxthon
“Maxthon has passed a classic Internet success test, having achieved significant following entirely through word of mouth and without any marketing spending. This rapid adoption is a testament to Maxthon’s innovative features and advanced functionality that have made the browser a much more useful tool for its users. Unlike other browsers that directly compete with Microsoft’s Explorer, Maxthon take advantage of IE’s wide adoption and improves on that. We believe this strategy, which has the support of Microsoft, could prove to be crucial in gaining Maxthon even wider adoption. Over the next five years, we expect the browser market to undergo significant changes and Maxthon’s technology and innovation are valuable assets for a successful positioning in this market”
Thank you Safa! Your reports and recommendations in the Internet industry will continue to be very valueable for us, particular with regards to China.
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