Imported Ideas Don't Fly

All of which suggests that, at least when it comes to reaching consumers, importing ideas from abroad doesn't makea lot of sense. Whether it's taxes, customs, shipping, habits, delivery systems or demographics, "taking modelsfrom the U.
Written by Joe Rebeiro, Contributor
All of which suggests that, at least when it comes to reaching consumers, importing ideas from abroad doesn't make a lot of sense. Whether it's taxes, customs, shipping, habits, delivery systems or demographics, "taking models from the U.S. and trying to just bring them over doesn't work," AsiaTech's Fan and BCG's Michael said.

Still, people keep trying. Portals are all the rage in Hong Kong, which is about a two-hour train ride from Guangzhou.

There, Antony Yip, co-founder of myRice.com, makes no bones about his copy-the-winning-ideas strategy. From downloadable books to free-mail to free home pages, Yip has "rolled up" a band of 15 Web sites - spending just US$200,000, he claimed - with marginal traffic individually to create a portal that now purportedly generates 1.5 million page views per day.

Yip, 21, has his hand in just about any Web-related business he has enough creativity to imagine, from Inktomi-like software to help Web sites expand their operations without burping to job listings to online yellow pages and online customer support. But Yip is nothing if not emblematic of the Web's ability to raise individual fortunes based on timing and willingness to take a chance. Five years ago he dropped out of Tulane University to found a computer gaming company. It failed. He went on to become a grunt at China.com for 2.5 years before trying again with myRice.

The point? Picking winners in China is still a hit-or-miss proposition. The would-be Bill Gateses of China are names such as Alibaba's Ma or William Ding at Netease. But Ding is the kind of entrepreneur who stares at ceilings.

"Two and a half years ago, nobody bet on him [Ding]," Yip said.

And it's still too early to tell whether free markets will reign online in China. In a much celebrated case, Sina.com was precluded from raising money to expand abroad. When Beijing finally relaxed its grip, China's Information Industry Ministry imposed severe restrictions on overseas listings. Net companies were told to exclude their mainland Internet operations from any stock they raised overseas. Sina and other information portals were also barred from delivering foreign news. And China's cabinet created an office to regulate news on the Internet. The Net equivalent of a Radio Free China was not in the cards.

Indeed, even Alibaba's Ma and the various B2B exchange founders aren't out of the woods yet. If Beijing seems more at ease with supporting freedom of economic expression than open politics, its ambivalence is still evident. Tony Ki, president of Greater China at TalentSoft, the Hong Kong offshoot of a Minnesota software firm, said his company and about 100 others were invited to Beijing in March to discuss with the ministries of post, communications and logistics what it would take to create a federally run B2B exchange.

That China could put a chill on the development of its own Net economy is not surprising The government funds five media Web sites belonging to Xinhuya, the official news agency; China Daily; the People's Daily; the State Council News Office; and the China International Broadcast Station. The Ministry of Information Industry also is believed to be behind the launch in March of a portal named CCIDnet.com, which could compete against Netease and Sina.

No matter. The infiltration of China by the Net has started. "I personally believe e-commerce is a trend that cannot be stopped," AsiaTech's Fan said. "With the efficiencies, I can't see the government coming in and stopping this."

And from a practical standpoint, access to the Net - and the commerce conducted on it - can't be arrested in Beijing, even if the government wanted to. Alibaba, for instance, has mirror sets of data servers in Beijing and Fremont, Calif. "You can cut off every server in China," Alibaba's Daum said, "but you could bounce things off Silicon Valley in an instant." Even in China, he said, "The Internet can't be stopped."

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