Tag Archives: internet

China’s internet giants go global

Tencent is leading the acquisition spree, with Alibaba a close second

 Print edition | Business
Apr 20th 2017 | SHANGHAI
THERE was a time, not that long ago, when China’s big internet companies were dismissed by investors in Silicon Valley as marginal firms with a tendency to copy Western products. Not any more. Today they are monsters with increasingly hefty international ambitions.

Alibaba, China’s biggest e-commerce group, handles more transactions each year than do eBay and Amazon combined. Jack Ma, its chairman, pledges to serve 2bn consumers around the world within 20 years. Tencent, which specialises in online games and social media, is now the world’s tenth most valuable public firm, worth some $275bn. Pony Ma (no relation), its chairman, wants China to “preside over the global tech revolution of the future”. But as the two firms become global forces, the third member of China’s “BAT” trio of internet giants, Baidu, an online-search firm that came to dominate the mainland market after Google left the country to avoid censorship, is lagging behind.

All three firms differ from their Western peers in important ways. First, Western companies usually prefer to focus on a few core areas, whereas Chinese internet firms typically try to do everything from cloud computing to digital payments. When this works, as with Tencent’s wildly successful app, WeChat, the results can be impressive.

Second, with the exception of political censorship, the internet sector in China is lightly regulated. Facebook, Apple and Google, in contrast, face increasing scrutiny. Chinese internet firms can achieve market domination of a sort that would attract close attention in other markets.

The third difference is that they can succeed on a rapid and massive scale because the state-dominated economy is so inefficient. Often there is not even a physical infrastructure to leapfrog—so-called third-tier cities, for example, often lack big retail centres. Nationwide there is one shopping mall per 1.2m people.

A huge home market has not stopped the trio from fighting bloody turf wars among each other. The outcome to this battle is rapidly becoming clear. Tencent and Alibaba are surging ahead; a series of own goals has left Baidu far behind. The common jibe about Baidu among local experts is that it is becoming the Yahoo of China, a once-dominant search giant that sank owing to a lack of innovation and a series of management blunders.

Its revenue growth fell to 6.3% in 2016, down from 35% in 2015 and 54% in 2014. The firm gets some nine-tenths of its revenues from online ads, but this income is plunging as marketers redirect spending from search ads on Baidu to social-media networks like WeChat and mobile-commerce platforms run by Alibaba. Meanwhile, Baidu is burning cash trying to keep its various big bets on artificial intelligence (AI), online video, virtual and augmented-reality technologies, and “online to offline” (O2O) services going. One of China’s most respected business consultants is pessimistic about its future: “There is very little chance they’ll be relevant in five years.”

Of the other two giants, Tencent is probably the most fearsome. It already has higher revenues and profits than Alibaba (see chart). Its value is set to climb as it ramps up advertising on WeChat (provided that does not provoke a backlash from users). Its main weapon against Alibaba is its stake in JD.com, the country’s second-biggest e-commerce firm, led by Richard Liu, one of China’s most aggressive and successful serial entrepreneurs.

JD.com has adopted an expensive “asset-heavy” business model akin to Amazon’s in America. Thus far, its vast investments in warehouses, logistics and couriers have not come anywhere near toppling Alibaba. But last year the company saw its revenues rise to $37.5bn, up from $28bn the previous year. Its share of China’s business-to-consumer market rose to 25% in 2016, up from 18% at the end of 2014. If Mr Liu’s investments in infrastructure start to pay off, much of Alibaba’s future domestic growth could be at risk.

That threat may explain why Mr Ma is not content with Alibaba’s overall 70% share of the local e-commerce market. In 2016 it spent $1bn to win control of Lazada, South-East Asia’s biggest e-commerce firm. In March Lazada launched a new service for Singaporeans directly to shop on Taobao, one of Alibaba’s two domestic e-commerce platforms (the other is Tmall).

Mr Ma last year persuaded the G20 summit of leading countries to endorse his proposal for an “electronic world trade platform” (eWTP), to make it easier for small businesses to trade across borders. Last month Alibaba launched a “digital free-trade zone” as part of the initiative, in Malaysia. This public-private partnership, which involves simplifying both logistics and payments, will help small merchants.

Mr Ma’s chief weapon for going global, however, is Ant Financial, which was spun out of Alibaba before the latter’s $25bn flotation in 2014 in New York. In China the unit offers services ranging from online banking to investment products; it even runs the mainland’s first proper consumer credit-scoring agency, Sesame Credit, which uses big data to work out the creditworthiness of punters. Ant already has more than 450m customers in China and is going overseas with gusto.

It has investments in local online-payments firms in Thailand, the Philippines, Singapore and South Korea. In America Ant is in a frenzied bidding and lobbying war with Euronet, an American rival, to buy MoneyGram International, a money-transfer firm. On April 17th Ant raised its initial offer for MoneyGram by over a third to $1.2bn, topping Euronet’s bid.

Tencent is also making bold acquisitions abroad. A consortium that it led spent $8.6bn to acquire Finland’s Supercell last year, a deal that turned Tencent into the world’s biggest purveyor of online games. Together with Taiwan’s Foxconn, a contract-manufacturing giant, the firm invested $175m last year into Hike Messenger, an Indian messaging app akin to America’s WhatsApp. It was also an early investor in America’s Snapchat, another popular messaging app, whose parent company Snap went public in March.

One reason for these purchases is that Tencent’s earlier efforts to promote WeChat abroad (including a splashy advertising campaign in Europe featuring Lionel Messi, a footballer) flopped. Established social networks such as Facebook and WhatsApp proved too entrenched to dislodge. They also did some copying of their own: once they adopted some of WeChat’s innovations, Western consumers had little reason to switch to the Chinese network.

Such investments have been in Tencent’s core areas, away from turf occupied by Alibaba and Baidu. Sometimes, the trio end up co-operating, if not by design. All three BAT firms are backers of Didi Chuxing, a ride-hailing firm with global pretensions of its own. But in other ways their domestic war is spilling into foreign markets.

India is one such battleground. This month, together with eBay and Microsoft, Tencent invested $1.4bn into Flipkart, a leading Indian online retailer. Alibaba and Ant together are reported to have invested nearly $900m in Paytm, India’s top online-payments firm; in February, Paytm launched an e-commerce portal akin to Alibaba’s Tmall to take on Flipkart and Amazon in India.

Elsewhere, Tencent unveiled a service last month that will allow firms in Europe to use WeChat to sell on the mainland. This will let them sell directly into China, avoiding red tape. Tencent also recently invested $1.8bn in America’s Tesla, a pioneer in electric and autonomous vehicles. That is a particular challenge to Baidu, which is betting its future on machine learning and AI.

Baidu’s push abroad is mainly a way to get access to talent in these fields. The firm has just started its first recruiting campaign at top American universities, including Stanford University and the Massachusetts Institute of Technology. It has a respected AI laboratory in Silicon Valley, despite the recent departure of Andrew Ng, an AI expert. But Baidu does not have the same firepower as Alibaba and Tencent. It tried but has failed to conquer foreign markets such as Japan with its search engine. This week it opened up its self-driving technology to rivals, as Tesla did in 2014, but it has a long way to go before it makes an impact in autonomous driving.

Grandiose BAT statements about global aims should be taken with a pinch of salt. It would be an error to neglect the profitable domestic market. Goldman Sachs, an investment bank, reckons that China’s online retail market will more than double in size by 2020, to $1.7trn. As Duncan Clark, author of a recent book on Alibaba, points out, whatever headlines Mr Ma and other internet bosses make with their overseas ventures, “it takes a lot to get away from the sheer gravity of China.” But at home and abroad, one thing is clear: China’s internet titans cannot be ignored.

This article appeared in the Business section of the print edition under the headline "Three kingdoms, two empires"

 

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Google’s New Free Software To Speed Up The Internet

Paul Monckton ,   CONTRIBUTOR
I write about photography and related subjects.  

Opinions expressed by Forbes Contributors 
The common JPEG could be about to get a lot smaller thanks to Google’s new software. This could lead not only to a faster Web, but also to direct savings on storage costs for everyone from hosting services to hobbyist photographers and especially smartphone users on metered connections.

20×24 pixel zoomed areas from a picture of a cat’s eye. Uncompressed original on the left. Guetzli (on the right) shows less ringing artefacts than libjpeg (middle) without requiring a larger file size. Google Research Blog
20×24 pixel zoomed areas from a picture of a cat’s eye. Uncompressed original on the left. Guetzli (on the right)
shows less ringing artefacts than libjpeg (middle) without requiring a larger file size.

Back in 2014, I wrote about BGP, a new file format purported to deliver equivalent quality to JPEG but with much smaller file sizes. The purposes of BPG is ‘to replace the JPEG image format when quality or file size is an issue’.

Fast forward to 2017 and BGP has obviously failed to achieve its stated purpose, with the humble JPEG still firmly entrenched as the file format of choice for the vast majority of users.

However a new, and free to use, compression technology from Google now hopes to revolutionise the JPEG where BGP has failed. Announced earlier this month, Guetzli is a new open source algorithm which creates JPEG files 35% smaller than typical current methods.

What sets Guetzli apart

The crucial difference between Guetzli and BGP is that the latter requires new code to be written before it can be read. Standard browsers and image software would simply fail to read the files without specific support for the format.

Guetzli, on the other hand, continues to use the established JPEG format. So, all software which can currently read standard JPEGs will also be able to read Guetzli JPEGs without modification.

There’s some crossover, in terms of the final outcome at least, with Google’s RAISR technology, announced at the end of last year, which can blow up small images into much larger versions with significantly higher quality than was previously possible.

Both Geutzli and RAISR can cut down significantly on the required size of image files, albeit in rather different ways. There’s also no reason why the two technologies can’t be used together.

How does it work?

The Guetzli encoder works by increasing the level of compression while creating the JPEGs, leaving the standard decompression algorithms for reading and displaying the images unchanged. The increase in compression comes from a new and more sophisticated model of human colour perception than is used by current JPEG encoders.

This results in higher quality images at a reduced file size, but also comes with a tradeoff in speed. Google’s engineers say that Guetzli is currently significantly slower than a standard JPEG encoder. Users of the current Windows version are reporting conversion times of several minutes for a single large JPEG.

Guetzli is potentially great news for anyone who stores or displays JPEG images as the time taken to download and the space needed to store them is significantly reduced. However, there are other options for those who want to create smaller JPEGs.

One such option is JPEGmini which claims even bigger file size reductions than Guetzli, up to 80%, with no loss in perceived quality. The big difference here though is that JPEGmini is a commercial product with prices ranging from $29 for the basic Home User option, up to $199 per month for those wishing to use it on Web servers and large photo repositories.

At the moment, JPEGmini is still a good option for everyday use as it is a polished end-user product, complete with plugins for Adobe Lightroom and Photoshop. However, a free algorithm such as Guetzli, once the speed issues are addressed, will most definitely pose threat to paid-for products like JPEGmini which hope to charge for exactly the same final result.

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Your internet speeds will be insanely fast when 5G arrives

When the 5G wireless standard hits the mainstream, our home internet speeds have the potential to be so fast that we'll be downloading 4K movies, games, software, and any other large form of content at a fraction of the time we're used to.

5G is the upcoming evolution of wireless 4G LTE, which is mostly used today for wireless mobile networks. It'll offer incredibly fast wireless communication that can be used for a number of applications outside of mobile networks, one of which is home internet.

At Mobile World Congress this year, Samsung showcased its 5G Home Routers, which achieved speeds of up to 4 gigabits-per-second (Gbps), according to PCMag. That's 500 megabytes-per-second, which could let you download a 50GB game in under two minutes, or a 100GB 4K movie in under four minutes.

To give you an idea of how fast that is, the average internet speed in the US as of 2016 is 55 megabits-per-second, which translates to a woeful 6.5 megabytes-per-second.

As PCMag's Sascha Segan points out, however, Samsung's router was right next to the transmitting 5G cell at the time of the demonstration. That means those speeds are probably only possible in a perfect scenario, where the 5G router is extremely close to the 5G radio cell without any interference, obstacles, or network congestion.

Still, even with 50% of that performance, we could be experiencing 2Gbps speeds at home. And even 1Gbps — 25% of the perfect scenario — would be great compared the US internet speed average.

Gigabit internet speeds aren't new, but they're extremely rare to come by. There are just a handful of ISPs that offer Gigabit Internet in just a few parts of the US, largely because it's incredibly expensive to lay down infrastructure. It involves digging up roads to install miles of fiber optic cables and connecting them to your specific address.

The best part about wireless 5G millimeter waves is that ISPs don't have to build costly infrastructure to deliver those insanely fast speeds. Instead, your internet service will be delivered wirelessly through the air, much like your mobile network for your phone.

How does it work?
Samsung's 5G Home Router will use an antenna installed outside of one of your home's windows, which is connected to a WiFi router inside your home. That antenna will pick up one of 5G's "millimeter wave" wireless signals that are transmitted from millimeter wave cell towers.

We've actually seen this technology before from a startup called Starry, which is currently in the testing phase in Boston. 

Hurry up and wait.
You can't buy it yet, but the technology is here, and now it's a matter of when this 5G millimeter wave technology will become mainstream. 

We're essentially waiting for ISPs to begin rolling out 5G. At the moment, Verizon is testing 5G in a few parts of the US, and the the overall consensus for mainstream 5G is around 2020.

There's no indication of how much these routers and other equipment will cost, nor how much the internet plans will cost, either. You can get a 500Mbps plan from Verizon Fios at the moment, but that costs $275 per month. 

Here's to hoping Gigabit 5G Internet will be cheaper.

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Verizon Bought Yahoo for $4.83 Billion…Time You Bought a Share in Markethive

Verizon Bought Yahoo for $4.83 Billion…Time You Bought a Share in Markethive

Image result for market network

“The entrepreneur always searches for change, responds to it, and exploits it as an opportunity” ………Peter Drucker

Dollars make “Change” and this is why Verizon smelled the money and came a running resulting in the purchase of Yahoo for $4.83 billion dollars because Digital Advertising (Internet Advertising) generates billions of dollars for competing giants like Google and Facebook.  Nothing like owning a global Internet-Technology platform that swallows up its competition with large volumes of resources to continue the expansion into emerging global markets.  Yep, we see the emergence of a global oligarchy with corporations like Verizon, Facebook and Google, monopolizing online advertising and this is why we must act now to ensure our freedoms are not negotiated away by the pimps (corporations) and prostitutes (political leaders), who make the World’s Oldest Profession look positively saintly when comparing the gargantuan volumes of money exchanged that consummate today’s corporate business deals with government law makers (lol).  Nothing like having vigorous social intercourse between entities that essentially control the economy and the people.  Yes, Free Market Economics and Democracy at work and perfectly legal because, the lawmakers got their cut, I mean donation.

Anyway, back to Digital Advertising or Internet Advertising which is when “businesses leverage Internet technologies to deliver promotional advertising and messages delivered through emails blogs, video, banners, social media websites, social networks, market networks, affiliate programs, search engines and mobile devices”.  Indeed, multiple marketing methods with more eyeballs on products/services to maximize profits in a growing global market that reaches its audience in nanoseconds.  I guess, you can see why Verizon made its move and competitors (Facebook & Google) are about controlling and more importantly monetising content to the max.

So, dominance by these evolving Market-Networks (Facebook, Google & Verizon) continues and this is why you as an entrepreneur need to build your own Network by connecting with likeminded individuals and Social Networks like Facebook, LinkedIn, Twitter, Reddit and countless others that influenced the way we communicate and interact act with each other. 

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LinkedIn revenue and sales: 2015 ($2.9 billion).

If, you watched Rise of the Entrepreneur then, you would recognize that this company embraces change and adapts to the reality of the conditions of its customers so as to achieve a solution.  Ironically, many companies are resistant to making adjustments to satisfy their customers base.        

Contributor

Vaurn James

 

 

 

 

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