Twitter got funding, again

When the whole valley is talking about how twitter makes money, the investors definitely are not worried. Twitter, raised $35 million from Institutional Venture Partners and Benchmark Capital earlier, making the total investment of $50 million.

Valley is always like this: users are always the first priority before business model.

Twitter Gets New Round of Venture Capital Funding (Update2)

By Joseph Galante

Feb. 13 (Bloomberg) -- Twitter Inc., the Web-messaging service used by everyone from Barack Obama to Britney Spears, raised $35 million from Institutional Venture Partners and Benchmark Capital, gaining funding to expand products.

Benchmark General Partner Peter Fenton will join the board, San Francisco-based Twitter said today in a blog posting. Twitter had earlier raised $22 million, bringing the total so far to more than $50 million.

Twitter has more than 55 million daily users who post short updates on anything from their latest date to their views on Congressional hearings. The service has emerged as a valuable source of information and news, which users can access from mobile devices or personal computers, said Todd Chaffee, general partner at Institutional Investors.

“This is going to be a very large media property,” Chaffee said in a telephone interview. “Any time you have millions of users engaging with your service multiple times a day, there are a lot of monetization opportunities.”

The company, founded in 2006 by Chief Executive Officer Evan Williams with partners Biz Stone and Jack Dorsey, rejected an offer to sell itself to Facebook Inc. last year, Chaffee said. The investors plan to make it an independent media company, he said.

anyone who figures out how to make money from radio should be a genius

seems Google can't figure out now..


Google to Shut Down Radio Business, Cut up to 40 Jobs (Update3)

http://www.bloomberg.com/apps/news?pid=20601103&sid=aS850OvFGSTs&refer=us

By Brian Womack

Feb. 12 (Bloomberg) -- Google Inc., owner of the world’s most popular search engine, announced plans to shut its three- year-old radio-advertising business and cut as many as 40 jobs, saying the investment didn’t provide enough of a payoff.

The company, which expanded into the market with the 2006 purchase of DMarc Broadcasting Inc., is seeking a buyer for software that arranges ads on radio programs. Google will stop selling radio ads by May 31 and focus instead on online streaming audio, according to a blog posting today.

The move illustrates Google’s failure to parlay its dominance in Internet-search ads into offline media. The company said last month that it would close a business that sold ad space in newspapers. Google spent $102 million in cash for DMarc and agreed to pay as much as $1.14 billion in later installments depending on performance.

Founder and CEO, who can manage the company well?

As one of the few Chinese companies who successfully expanded to the world, Lenovo is always respected. Liu Chuanzhi, the founder, is definitely a character. He appointed Yang Yuanqing, a 30-something, to succeed him as the CEO, and then Chairman. He always says "Empower the youth".

Now with a huge loss reported for the last quarter, Lenovo is struggling among the pressure from investors. Liu is coming back as Chairman, and Yang resigned from chairman to be CEO. The official reason is that Yang will be mainly in charge of domestic business since that's where he came from. I can understand the pressure Lenovo is having now, but the question staying on top of my head is who can manage a company better, a founder or a CEO.

Probably Levono is learning from Yahoo to have its founder back. However, we see Yahoo went still can't get rid of the destiny to be acquired by Microsoft. One of the companies that Leveno may learn is Cisco. Founders already cashed out, while the company has been going through two generation of CEO, John Morgridge, and John Chambers. Even in bad time, Cisco can still survive.

Founders usually have a lot of emotional attachment to the company, such as its original business plan. That type of connection makes it hard to get to a good decision since emotion is hard to control. That's why when company grows bigger, professional managers are needed because they are the one who made the decision for a better future, instead of a planned future.

All I can say here is "Good luck, Lenovo".

Look for one or two experienced website developers

I am working on developing some web application in China, and looking for a rockstar developer. Please let me know if you are or you can connect to someone. Appreciate!!!

Meeting Marc Andreessen, the founder of Netscape

He is someone in the valley with a big ego. He is outgoing and speaks fast but in a very organized way. I am a big fan of his blog: http://blog.pmarca.com/ though he stopped updating it for months.

He said that a successful entrepreneur has to hire a killer architect, watch closely on the change in the technology industry. He said it's hard to be a person who can both building the company and run the company. He said the silicon valley used to be a high-tech driven company but now turned more into consumer driven. He said the timing is very important.

One thing surprised me is his wide knowledge beyond technology. He is interested in media, and once spent a lot of time on reading the media history. He is also interested in financial service industry, and predicts to see a big change in the next 12 to 18 months.

I always respect smart people who work hard, and he is definitely one of the few.

Support Andy Xie

I shouldn't try to support someone on my blog since it is not an unbiased report. But Andy Xie worths this. He is an independent economy research and once Morgan Stanley's chief economist in Asia, and is now blamed for "being a US citizen". (see the reports from Standard)

It is not a citizenship problem; the cause is Mr. Xie's bearish reports on China's stock market. An article for an editor on Securities Journal blamed Xie's negative speech as being a US citizen. All in all, it is a big cap that tried to make readers hate Xie.

Not to mention if Xie is Chinese citizen or not. People have freedom of speech if this speech doesn't affect other's safety/security. People have freedom to choose their citizenship if this change doesn't affect other's safety/security. We see a lot of non-Chinese speak good things on China, and a lot of Chinese took bribed money from China to overseas. A citizenship means nothing; for someone who dare to say something different, it's unfair to close his/her mouth. It's also dangerous to a country. China needs much more of those types like Xie.

I just saw an annecdote on Obama today. He is going to bring blackberry to the White House though it is dangerous for his securitiy.

He said: "If I'm doing something stupid, somebody in Chicago can send me an email and say, 'What are you doing?'

The pain of financial crisis

1. US postal office just sent a mail on the adjustment of the mailing schedule after a decrease of 8 million first-class mail in 2001.

2. Jackson library in our school will be closed on Sat and Sun because of the lower budget caused by the financial crisis.

It's surprising on how the public system and education industry got affected by the financial crisis. Obama is going to be the President today. There are lot of things for him to do. A word "change" definitely can't change that much.

3G in China: not a long for now

China finally launched 3G. It is a good news to the telecom equipment manufacturers, considering the over $35 billion investment in the next two years.

lucky or not, I tried 3G phone for two weeks in Beijing this winter. The phone is from Datang, and the network belongs to China Mobile. Frankly speaking, there's no advantage at all; network coverage is poor and the phone is a pain to use. For consumers, it will be hard for them to upgrade their nice phones into some ugly handsets with poor signals.

Definitely don't long on this one for now.

Chinese banks' efficiency

I must be spoiled by HSBC and Wells Fargo; now in Beijing, I found even China Merchant Bank, the so-named China's best retail bank, still has a long way to go.

I was in the Dawang Road branch of CMB yesterday to apply for a new account. It took over half an hour waiting and half an hour to process. The other customers have same situation too. In fact, there are quite a few ways to improve the service, just a bit effort.


Ways to improve the customer experience based on the operation theory:
(1)
Reduce paper work and word-typing process. There are so many paper work involved in each service, while customer don't necessarily need it. For example for easy service such as deposit, signature is not necessarily needed. Another example is to reduce the required blank for applying new account, such as office phone/home phone.etc.


(2)
Add the number of customer rep in the normal service counter. Right now, there are three customer representatives serving in the hall(one manager, two intern), six reps in four normal service counter, three reps in the wealth management counter, maybe a few in the VIP room, too. Among the four normal service counter, one is in charge of easy service, and the other three are dealing with complicated service. The whole bottleneck is here. CMB can try to move the reps from the wealth management counter to the normal service counter to reduce the waiting line. Reps in wealth management counter basically doing nothing, while reps in the normal service counters are busy to death. CMB should increase the utilization in the other counter by letting them doing normal services.

(3)

Entertain customer while they are waiting. There are a lot of ad post but they are not entertaining at all. CMB should add some newspaper/magazine or some TV screen to attract customers' attention from waiting. Those entertaining tool will dramatically reduce customers' complain.

Good luck to CMB and other Chinese banks on the way.

bad service in Lotus Beijing Lotus Supercenter retail store in Beijing

If you are ever in Beijing, never ever go to Lotus Supercenter retail stores. It might be close to your place, but you will sacrifice your good mood for this convenience.

I got a very bad experience in a Lotus Store in Beijing near Chaoyang park. I left my basket in a corner, and went to get something else. The basket just disappeared. I asked one customer rep, and she said she doesn't know. I asked another customer rep, and he said he is charge of the other area. There's a manager-look lady asked a rep to help me, and the rep's answer is she can't help since she just got off the work. I asked totally six employees, and no one ever felt responsible for an annoyed customer.

It turns out Lotus has this rule of return every goods left in five minutes, and someone may mistake my basket as a leftover. I understand this, but that can't be the reason for them to collect the goods basket the customer is still shopping with in two minutes. The rule is a burden to the customer, just because the store wants to keep the goods in order. Shame on them.

More importantly, no one takes an ownership on a single customer. i don't know how Lotus trained their employees, and how they got paid(definitely not for customers but probably for the speed of returning the goods). Every rep looked at me like there's nothing to do with them, instead of trying to take the responsibility to help me. When I asked to see the manager, a rep even said he is not allowed to cross the level to report to the manager.

I used to think the service in Asia is much better, but if you ever in Whole Foods or Safeway in U.S., you can feel like being helped. Reps will approach you and say "do you need help", the countermen or counterwomen will say "did u find everything ok. It's a pity that Lotus is founded by Charoen Pokphand Group, a well-respected Thai conglomerate.

With such a bad service, no wonder Lotus is losing a lot of money in China. It hired two senior WalMart excutive, Jim Haworth and Terry Pharr to save the loss in the beginning of the year and changed the company's Chinese names. My only words to the Jim and Terry: train your people to be customer-centric, instead of rule-centric; or everyone will stop going.

I have to spend 73 rmb in the store today, and will never pay them a cent in the future. Will go to Carrefour though it is a bit far.

If Lotus has a stock, definitely go short.

happiness can be contagious

Happiness can be contagious, even happiness from strangers. so how about an idea of happiness social network?

From New York Times:

How happy you are may depend on how happy your friends’ friends’ friends are, even if you don’t know them at all.

And a cheery next-door neighbor has more effect on your happiness than your spouse’s mood.

So says a new study that followed a large group of people for 20 years — happiness is more contagious than previously thought.

Reform Chinese media just like reform banks?

It's a shame for English media to miss this interview in Chinese newspaper Southern Weekly.Liu Binjie, the director of General Administration of Press and Publication in China, said the state-owned media organization should be restructured in the way as banks did. This is a strong signale on an incoming big reform in China on media organizations, and also a sign that Chinese press and publishing industry have to reform in order to survive.

If people, can remember, Chinese banks did restructure itself a few years ago, while the big four already or are going to list in the stock exchange, making the organizations more transparent.

If what Liu said is true, the impact will be huge on the media industry. For example, the newspaper industry in China prints over 44 billion pieces of newspaper every year; if each piece costs an average 2 rmb, it's gonna be a US$12 billion industry just by selling newspaper, not to mention advertising and so on.

For the book publishing industry, Liu said it will legalize the private capital's role in the industry. This means the private capital can directly publish books in the future, which will make the book publishing market more efficient, and I expect more innovative content will be generated.

Liu also talked about the plan to set up three big media groups with annual revenue over $10 billion. This is an easy part, since right now there are already three including CCTV, SMG and Southern Daily Group. This may not be a good thing for a media start-up, but at least their operation will be more transparent when they are listed.

Hope emerges amid the global financial crisis.

Best wishes to Mumbai

The world peace is hard to remain, and there is always something going on in a corner of the world.

Let's pray.

the impact of financial crisis on MBA

A lot of people asked me how the global crisis affect a MBA. In fact, the impact is much bigger than expected. A lot of companies canceled their campus recruiting, while even companies came are hesitated to give a full-time offer. I heard a lot of consulting firms only hire one or two people in a regional office, which is much fewer than they used to hire. Not to mention banks and private equities. I had lunch with a friend today, and our conclusion is that the MBA job market will not recover quickly even if the economy turns better.

People started talking about how difficult to get a job now, though Stanford MBAs don't usually take the offer from campus recruiting. Entrepreneur career seems more attractive since at least you can start cheap. Luckily, I am on this trek.

one year older

Just celebrated my birthday this week. Time flies. It's already a year since I first came to Stanford. and I've now learned so much.

An old friend came to visit this Saturday. We talked a lot on the Internet in China, and especially social networking website. To me, there's still a lot of potential to explore. Now I have this dilemma if I should stay or go back after the graduation. My heart told me to go back, but there's still a lot of things to learn here. Hope I can get a sure answer very soon.

A good time to invest?

It's a tough time to work in real world, but it is not bad to sit in the classroom now and learn about investment.

In Stanford, we have a class called the Investment Management and Entrepreneurial Finance taught by Professor Jack McDonald. He was once the Chairman of Nasdaq advisory committee, and is well connected in the industry. In the class, he invites all type of investment experts, from the founder of TPG to the Chairman of Capital Group Research. In the past few months, they talked on the downturn of the market usually in an optimistic way; interestingly, a lot of them mentioned the opportunity. One of them, founder of a US$15 billion PE firm, said the next 5 to 10 years is going to be a big opportunity to get a huge return. He said US's opportunity will sit in its advantage to deliver goods and services to other countries. More importantly, US should think more of the real problems such as energy dependence, climate change and food safety by working together with countries like China instead of treating it as adversary.

Clearly, there is a misconception in the US media that the US is going to an end. There are a lot of smart investors quietly observing the volatile market, waiting to be in the best deals. Looking at the past 100 years, a lot of great investors often emerged in the bad time. and who will be this time?

good time, or bad time, to start a business now

Economy downturn finally spread to the VC industry, while Sequotia Capital called an urgent meeting to all its portfolio CEO last week. Definitely it holds a somber view on the economy.

I was talking to my business partner on if it is good time to start a business now. He is conservative, while I am optimistic. On one hand, it's hard to raise money, but on the other hand, there is less competition. Start-up takes time to develop and the downturn is a good time to prepare it well. When economy begins to fly, your business will start to fly too. Maybe this is too ideal, but isn't that entrepreneurs have to be passionate and persistent to succeed?

Excerpt: (if you need the slides from Sequoia, let me know)

http://blog.weatherby.net/2008/10/a-ceos-sequoia.html

Today, Sequoia Capital hosted a mandatory CEO All-Hands Meeting on Sand Hill Road. There were about 100 CEO’s in attendance and let me tell you, the mood was somber. I’m not one to perpetuate doom and gloom or bad news, but let me underscore this for you: We are in a serious economic downturn and this is just the beginning. Immediate, decisive and swift action is required, along with frugal, day-to-day management of expenses and our business is required.

***Here are my notes from the meeting. Keep this note in your in-box and read it every day. I’m serious folks, this is for our survival.***

Speakers:

· Mike Moritz, General Partner, Sequoia Capital (he moderated the speakers).

· Eric Upin, Partner, Sequoia Capital (Eric ran the $26-Billion Stanford Endowment Fund and knows a few things about Economics and investing.)

· Michael Partner, Sequoia Capital (Michael was recruited to start Sequoia’s very first hedge fund, coming from Maverick Capital and Robertson Stephens. I know him from my BEA days.)

· Doug Leone, , General Partner, Sequoia Capital

best wishes to the friends who left us

Today Dean Joss sent us a bad message: three of my classmates were caught in an accident on Highway 1 and left us. They are all young bright people who are going to make an impact in the world, but left us too early. Our heart and prayer to them. Wish they would know they are missed by us.

short selling in China

First, sorry for being absent for a few week. I don't have a good excuse, since students are not supposed to be busy. But actually I am pretty busy. The classes in the second year are so good that I scarified some writing time for reading cases. I am also planning to do a start up on consumer Internet. hopefully I will bring more updates soon.

The biggest news this week is China started the trial on short selling, a big improvement in the capital market. I remember people have been talking this for many years, and the CSRC is smart to launch this now because the market is too low, almost at the bottom. Short selling will not hurt that much.

FT article:

Short selling may be out of favour, widely blamed as one of the most dangerous of the unregulated excesses of market capitalism, but China’s stock market regulators are apparently not worried by that.

Just as many countries have banned or restricting the practice, China announced at the weekend that it would proceed with the trial introduction of both margin trading and short selling of shares, in spite of the global turmoil.

Initially at least, the Shanghai stock market was unimpressed: the benchmark Shanghai Composite index closed down 5.23 per cent at 2,173 points on Monday, shrugging off the positive impact of the announcement entirely, and giving in to concerns about the health of the global economy instead.

Shanghai stocks were also playing catch-up: the mainland markets were closed last week for the Chinese national day holiday, so they were unable to react to market falls elsewhere in Asia until Monday.

On Sunday, partly as a further effort to support the flagging Shanghai stock market, the China Securities Regulatory Commission (CSRC) announced the cautious introduction of margin trading and short selling. The measures were meant to introduce “new vitality” to the stock market, the regulator said on its website.

It said only carefully selected brokerages would initially be permitted to offer such services, and the scale of any margin trading – buying shares with borrowed money – would far exceed that of short selling since brokerages have much more cash to lend to clients than shares. Traders expected the measures to lift the market.

But investors appear to have been too preoccupied by global market travails to care much about long-term reforms to the Chinese markets. “The fall today is a negative response towards the external market worldwide during the long holiday. The introduction of margin trading and short selling is a . . . technical enhancement with more long-term effect than immediate impact,” said Zhang Jichun of United Securities. “There is still a big lack of confidence among investors at the economic fundamentals,” especially a continuing slowdown in corporate profitability.

But the goal of the long-anticipated reforms is “much more than a simple market-saving effort. It is geared towards the institutional build-up of the Chinese financial market”, says Mr Zhang. The measures will increase liquidity and weed out amateur investors: “Those who can’t read the market will ultimately be filtered out.”

Jing Ulrich, head of China equities for JPMorgan, said: “The new trading mechanism will fundamentally change the ‘one-sided’ nature of the A-share market, allowing investors to profit from falling as well as rising markets.” She added that in the long term, securities lending should contribute to the stability of mainland markets.

But in the short term it could lead to further volatility “leveraging market participants’ capacity to engage in momentum trades on the expectation of falling or rising markets”.

a big Wall Street Show

When people were talking about U.S. was going to gain back its strength in the first half of Septembers, now two of the biggest five investment banks on the Wall Street are disappearing. It's like a drama in the past few months, while it's interesting to watch from an outsider's perspective.

Henry Paulson, the Finance Secretary, said American should remain confident in American financial system. However, just saying so will not help. Henry Paulson refused to use the Federal money to help with the liquidity of Lehman Brothers, after he led the U.S. government to take over the Fannie Mae and Freddie Mac.

However, this show will never happen in China. Chinese government owns all major banks and brokerages. If one goes for bankruptcy, the others will be hugely impacted as well. The government has to transfer money from left hand to right hand to make up the loss. It's a good thing for small investors, but not healthy for the total market, since all general investors are overconfident on the government's capability.It is also the reason for Chinese market's isolation from other markets.

Today, the central bank of China cut the rate, though it didn't save the Chinese market from tumbling. This is a good thing. Now Chinese should realize that the local market is closely connected to the global market, and a single government can't control the world market. Now they need to learn how to play the game.

Let's continue watching the show, and there's several stocks on my watch list.