The next IPO?

I have been very grown-up this week and manfully resisted the temptation to post on the house that Jack bought.

Instead, we'll speculate that the next B2B IPO, riding on Alibaba's coat tails may well be made-in-china.com.(as opposed to madeinchina.com which is different and run by HC International). Blogger David Lau Wei has written a long post (in Chinese) on the company in which, amongst other things he says:

• Made-in-china will have revenues of Rmb200 million in 2007 (US$26.5 million) and profits of around Rmb80 million (US$10.5 million).
• In March 2007, the company which was founded in 1998 received a strategic investment of $5 million.
• They have considered IPO in 2006 and spring of 2007. They are now looking at an IPO in September 2008.

Our highly unreliable (there, I'll get that in before the phone rings) Alexa-based rankings place made-in-china.com as #2 in the Asian B2B league behind Alibaba.com with around 950,000 regular users.

Update: Hmmm. It appears that Mr. Lau may have 'borrowed' that content from the China Finance Online site as it pops up here too and it looks as though it's one of their reporters who covered it.

Paying in China

It's a joy to be back in Beijing where you can cut the air with a knife and post to the blog but not read it. Not to mention traffic being stopped for 20 minutes on the Airport Expressway to allow a departing dignitary a misleading view of Beijing traffic.

Seeking Alpha carries a Chinese Tech Stock Weekly Summary which is always worth a browse. To pieces got clipped into my Google Notebook today and both refer to online payment systems.

Firstly, Paypal in China:

PayPal disclosed that it is cooperating with China International Travel Service [CITS] to offer a new payment service on CITS' web site.

Alibaba to distribute Thinkpads?

This is an odd story. Alibaba can comment here if they want to on whether or not it's likely. The piece comes through Sinocast and I picked it up on Trading Markets. The basic thrust is:

• Lenovo thinks that online distribution of PCs will become more important. That might seem like a "duh" conclusion although I read something the other day suggesting that Dell was going the other way in China.
• They are looking for an online distributor in the mainland.
• Alibaba.com looks like a serious option to them.

Now, Alibaba has no physical infrastructure which would allow it actually to distribute. So, it would be more of a sales channel than real distributor....unless there are plans afoot over in Hangzhou of which we're not yet aware.

Watch this space.

Righteous indignation against the Economist

We've written about Ken Carroll's Chinesepod business before (and here). It's very interesting, well done and, as far as we can see, represents a novel take on technology and language teaching. Thanks to Fons Tuinstra, we see that Ken has started a blog and this post is a blast.

Like most of us, he holds the Economist in high esteem but takes them to task with great gusto over what he sees as a case of very sloppy reporting about Chinese teaching:

...this is probably the worst article I’ve ever read in the Economist. The writer seems to have put this together so quickly and superficially you have to wonder if he did it purely to fill a column space on a bad morning. As I said, I read and love the Economist, but this is appalling. Tell me this was written by an intern with a bad hangover, please!

The Economist article addresses what I think is an important topic: the value of the current "fad" (their word) for the teaching and learning of Mandarin/Putonghua. Read Ken's piece to find out what he thinks is the matter with the piece.

My concern focuses on the bad teaching of Chinese to unwilling kids by teachers whose main qualification is being Chinese. It's a reversal of the old problem with English-speaking
youngsters paying for their backpacking trips around the world by 'tutoring' English. Never has so much damage been done by so few...etc. If it's going to be done, it needs to be done much better and with much more careful thought.

It probably also needs to be done either much earlier or much later. Trying to drill 13 year old boys who are not interested in tones, China or Chinese must make for misery all round.

All Hail Diller-xiansheng, China expert

When I first travelled to China in 1985, I was given sage advice and a good warning by an American who is still there and running what is now a listed company. Stay for a week she said, and you'll feel prepared to write a book on the place. Stay for a month and you'll be up for an article. Stay a year and you'll be so thoroughly confused that you won't want to write anything.

So, I was intrigued to read this Seeking Alpha post of Barry Diller's plans to conquer China:

Diller commented that he was not especially worried about the complications of running a business China; he plans to spend a couple weeks traveling and meeting successful internet entrepreneurs.

That'll do it then; 2 weeks and a handful of bright boys with pony tails. Forget eBay and Yahoo!'s failures and the struggles that Google has had to establish itself in China.

Demonstrating his absolutely mastery of Chinese regulation, Diller reportedly said "online gambling, a booming market in China, would be on the top of his list". Hmmm. I think there will be quite a line of people waiting in Beijing to relieve him of his $100 million.

Listing the whole thing in China

Although there appear to be a number of Chinese media companies listed both in China and outside, a closer examination will generally reveal that what has been listed is not the whole business. The publications themselves and associated editorial operations have typically been excluded. What has been listed is the commercial arm of the business. A typical example of this is SEEC Media in Hong Kong, the ad sales division of the publishers of Caijing magazine. The magazine itself, though, is officially published and produced by a different, Beijing-based company.

That may be about to change. Zero2IPO picks up a China Daily story about the "State-owned Liaoning Publishing and Media Company Limited [which] was approved by the China Securities Regulatory Commission on Tuesday for an A-share initial public offering". This, the article says, will make it "China's first wholly listed publication company, which will include both its editorial and operational business in the listing entity".

Censorship on our mind

We really ought to leave this topic to the real experts on the subject such as Hong Kong University's Rebecca MacKinnon. However, two pieces caught our eye today:

• There's a good piece in today's FT by Mure Dickie in which he talks about the pervasive but often relatively undetectable heavy hand of censorship in the Chinese media and Internet. He is sceptical of those who suggest that, at a local level, the Internet and other local media are more open than we believe. He asks "How much does this matter? I will leave the last word to Zhou Xiaozheng, a Beijing professor..."If people do not have the right of expression, there can be no 'rise' to speak of," Prof Zhou said in one remark that, ironically perhaps, did make it to broadcast. "[And] even if you do 'rise', nothing good will come of it."
• Meanwhile, over in Thailand, it seems the Wikipedia founder Jimmy Wales put the cat among the pigeons when he spoke frankly about censorship in front of those responsible for putting the screws on Thailand's freedom of speech. The FACT - Freedom Against Censorship Thailand blog reports that he was a keynote speaker at the government's ICT Expo. The Bangkok Post apparently reports '“Thailand should recognise that censorship is a barrier to progress,” [Wales] said. Later, when asked if he realised that his hosts at the Ministry were the ones responsible for censorship in Thailand, Wales said that he was glad he had been talking to the right people…'.

We're sadly not convinced that the powers that be around Asia will buy for the foreseeable future the argument that clamping down on free speech, online or elsewhere, is going to be a barrier to progress or the rise of their countries. But, we can live in hope.

P.S. Global Sources also up strongly

Interesting to note that Global Sources also had a cracking day on NASDAQ yesterday when the market overall wasn't doing anything too exciting (up less then 0.5%). GSOL posted an almost identical gain to Alibaba, up 9.63%.

They did make an announcement yesterday about linking up with Semicon to produce Taiwan's largest IC event. It's hard, though, to imagine that this alone could great US$112 million in increased market value.

Alimama, that's Ali that's going on

Thanks to the South China Morning Post for answering yesterday's question about what spooked the Alibaba share price up almost 10%. No thanks to the Kuoks for keeping it behind the paywall.

It seems that the market got itself all excited over the official launch of the Alimama ad network (we first wrote about that back in August). It is part of Alibaba Group, not the Alibaba.com B2B division which is listed.

That, however, is not stopping the Hong Kong analyst community working itself up into a froth over the possibility that Alibaba might inject Alimama into the listed company, something which spokesman Porter Erisman outright denies. Denials clearly didn't cut any ice with the boys in the finance houses who see their year-end bonuses shriveling with the markets and are keen to pour something inflammable on the dying embers.

Now hear this for silliness: JP Morgan's Dick Wei suggests that "It's possible, especially when Alibaba's share price is weak...". Is WHAT? I hope he's referring to the theoretical possibility that it might be weak in the future. If he thinks its weak now, I simply despair.

Update: Free for all is the Standard's version of this story which explains the 'cute' Babas and Mamas play on words as well as suggesting that investors weren't really aware that this was outside the listed Alibaba.com company.

Ali-oop. What's going on?

The Hang Seng index recovered a bit today, up 1.13% at 27,721. Alibaba, however, had a cracking day, up 9.89% at HK$35.55. That added HK$18 billion or US$2.3 billion to its market cap which now stands back up at HK$179 billion (US$22.9 billion). At one point, the price hit HK$38.10, approaching it's all time highs.

What's got the market all excited about them again? I have no idea.