DFJ VinaCapital heats up Vietnamese teen social networking with Yeah1 investment

Vietnamese media reported on May 28, 2008 that DFJ Vinacapital has invested an undisclosed amount into SuperStar, the company behind the teen forum Yeah1. This has a little bit heating up the teen segment competition in Vietnam, but it seems there will be a lot of difficulties ahead for the players. It would be interesting now to look at the evolution of the teen segment in Vietnam and what trends are taking shape in this heavily competitive category.

 

Evolution of a hot segment

 

Vietnam’s first successful teen website would be Loitraitim (words of love hearts), which dated from 2002 from YoMost, once the coolest brand in Vietnam’s recent marketing history. With a very appealing tagline “A Very Yomost Style”, YoMost, owned by DutchLady/Foremost Vietnam, stormed the Vietnamese market with a wonderful through the line marketing campaign that quickly made YoMost the ultimate Vietnamese teen icon. Loitraitim, a teen website then, was quickly absorbed by YoMost branding team, then redesigned, and relaunched in a Valentine promotion campaign. Teen-oriented design with youthful color palette and entertainment news update, low competition and abundant marketing budget injection from YoMost branding team has quickly catapult Loitraitim to become the leading teen website at that time.

 

However, in the following years, Loitraitim was quickly dethroned by many amateur music sharing websites. Vietnamese teenagers flocked to these websites to listen and download online music, making online music the most trafficked segment in teen category. From 2004 to late 2006, amateur music websites made their names into most of the top 100 websites in Vietnam, with some representatives like Nghenhac.info, HoangClub.info, Nguoidaukho.vn and Vui.vn etc.

 

Then came in web 2.0 big players in early 2007. On one hand, music vertical search engines, including Zing, Baamboo, 7sac, Socbay, Uizaa with better services and user experience has gained most of the traffic from amateur online music. On the other hand, social networking services like Cyworld, Yobanbe, Timnhanh Cafe, MyLife has attracted a good number of teen users from web 1.0 players.

 

In early 2008, more bad news for Vietnamese pirate online music websites came when Ministry of Information and Communications issued a document requiring all pirate music websites to stop uncopyrighted online music services and strictly follow the law on intellectual property. So far only a few online companies which are heavily financed could afford the price tag by Recording Industry Association of Vietnam (RIAV), rumored to be in billions of Vietnamese dong per year, including Vui.vn (owned by 24h Group), Yeuamnhac (an invested company of IDG Ventures Vietnam), Pops Media (still in preparation for a heavily-clamored new online music service) etc..

 

Teen segment is a hard sell in Vietnamese online advertising space. Though teen oriented websites in Vietnam recorded a good user base, with monthly pageviews from a few hundred thousands to some millions, monetization from these website are still a far future. Major advertisers that have ventured into teen website in their media mix remains less than a dozen. Almost all teen websites are operating in the red, mostly financed by VCs or big Internet players. This is forecast to continue in the near future.

 

Future trends

 

Social Networking is very popular among the teenagers worldwide and most of them spend on an average one hour daily to either post or read postings. In the United States, MySpace.com, Facebook.com, Xanga.com, Tagged.com, Friendster.com, Twitter.com etc. are the most popular social networking services among the teenagers. Video and photo-sharing websites like YouTube.com and Flickr.com are fast catching on with the teens, which are creating profiles and sharing their videos and photo collections. iTunes is another favorite of the teens. In South Korea, Cyworld social networking services was phenomenally successful with more than 20 million members. Similarly, in China the IM-based social networking services QQ (Tencent) was hugely successful with 2007 revenues of more than $523 million with net income of more than $214 million, which translates to a whopping profit margin of 42% and a $11 billion market capitalization.

Inspired by this worldwide social networking craze, Vietnamese teen segment with a 20-plus million population is a lucrative market for Internet services providers. I personally think the segment, though facing difficulties adopting international business models, building platform, bootstrapping, scaling and finding a relevant monetizing/advertising platform, will finally have their days in the next few years. Vietnamese teen websites are falling into the following categories:

-      Teen Content Portal: These include Hoahoctro, the online version of Hoa Hoc Tro, Vietnam’s No.1 teen weekly magazine, with a circulation of more than 100,000 issues per week. Another newcomer is Kenh14.vn within the ChannelVN.net portal project by VC Corporation, the famous 2-million baby IDG Ventures Vietnam company. Since its debut early this year, Kenh14 has grown quickly with online fashion photo features and sensational sexual health articles. Other old players like Loitraitim are becoming obsolete, due to lack of innovation.

-       Teen Online Services: These include online music and movies, with representatives as mentioned above.

-       Social Networking: Players include Cyworld Vietnam, Yobanbe (within Zing portal from VinaGame), Timnhanh Cafe (another DFJ Vinacapital investee). Vietnamese facebook clones, including Tamtay, Guongmat, FaceViet and the incoming Zoomban and I-pro.vn from VC Corp. Disclosure: my company, Vinalive, after the biggest upgrade this year for women social networking PhunuNet in this coming June will also conduct a small facelift for the youth social networking MyLife.vn then. The competition therefore will only accelerate, especially when Friendster has just entered Vietnamese market this month (I will detail in an upcoming article).

It would be exciting to see what kind of business model DFJ Vinacapital investee Yeah1 will come up with. From my perception, Yeah1 looks more like a content provider (they are busy making a TV Show on Saigon Cable Television, a channel with very few audience and almost no advertising revenues). My prediction: with DFJV’s investment, Yeah1 will upgrade their platform to become a social networking services.

However, their current platform, which is much like an amater forum, will take them a lot of time and energy while other carefully prepared rivals are already running around in the street. For DFJV, this will buy them more on audience and media inventory rather than a strong, disruptive platform and a well-positioned powerful brand. Building these will not be an easy task for Yeah1.

Vietnamese Facebook clones’ face-off Part 2: VC’s Zoomban prepares inroad

As I wrote earlier that VC Corp is busy preparing their own Facebook clone, now its Zoomban.com is planning to go public, heating up the already crowded marketplace. Now it’s time to check the performance of the key players: FaceViet, Tamtay, Guongmat, and some predictions on the competition once Zoomban is officially launched.

FaceViet has just launched its new platform, upgraded its server capacity and adding more entertainment features. Its new interface is cooler, but less elegant than the former and, strangely enough, is somewhat like LinkedIn! I actually prefer the old interface, because of its simplicity and crystal convenience (or maybe I’m too old to like cool things). I guess FaceViet has changed both its source code and interface too. The most remarkable functionality of the new FaceViet is its “Entertainment” feature, which provides a quite big library of online music and movies. This has proved a good tactical move, as FaceViet’s Alexa ranking has rocketed in the past few days because of this entertainment function. However, as the Vietnamese government, i.e. Ministry of Culture, Sports and Tourism, has recently requested all pirate online music websites in Vietnam to strictly follow the Law on Intellectual Ownership, FaceViet’s move will be very risky in the coming time. FaceViet also provides its own vertical search engine that helps users find music and movie files.

My forecast: With all these moves, FaceViet has regained good traffic improvements, but in the longer term, its business model becomes more confused. It seems FaceViet will continue its evolution with a focus on music and movie, and become a portal like VinaGame’s Zing.

Guongmat has made almost no progress since the last time I wrote about them in November 2007, except for a new interface, and again has a strikingly similarity to FaceViet, especially the silver-colored design template. It also allows users to customize background pictures and “themes”. Actually I quite like Guongmat’s simplicity and some of its very convenient features like photo uploading process, but Guongmat has became a little bit too boring and provides no differentiation among the Vietnamese Facebook clones.

My forecast: Guongmat need to look into its inner self to find where are its core competencies and what kind of value proposition and business model it is crafting, or other players like FaceViet, Tamtay and the upcoming Zoomban will put a full stop to Guongmat.

Tamtay.vn has made some good progress in terms of traffic and customer acquisition. It now boasts more than 100,000 registered users, but most of these users have very little activity on Tamtay. From my perception, most users coming to Tamtay are teenagers, and they came there mostly because of Tamtay’s good selection of sexy photos and updated online movies! This is a smart short term tactic, but in the long term “bribing” customers with sex will only diminish the long term value proposition and brand equity.

My forecast: I’m quite impressed with Tamtay’s performance, but again it will need to redefine a long term business model and a strong differentiation strategy, or it will trail behind Clip.vn in terms of online video and the upcoming Zoomban in terms of social networking functionalities.

Among the Facebook clones, VC Corp’s Zoomban would be the most exciting to watch. With VC Corp’s tons of cash, technology capabilities and smart marketing initiatives, I guess Zoomban will soon become the biggest player and cause a lot of difficulties for both FaceViet and Tamtay. A good, fun, attractive user interface combined with delicate social networking functionalities will make Zoomban outstanding among its competitors. VC Corp’s widely reached Internet properties, including Dantri, TTVNOL, Baamboo, Sannhac, ChannelVN etc… will soon help Zoomban with a lot of free media value that FaceViet and Tamtay could never dream of.

My forecast: It’s too early to make any forecast, but I guess Zoomban will score an early home run when it is launched in the next few months. However after that it will need to define a clear business model while the original Facebook is in its own difficulty finding an appealing social ad platform after Beacon has come to a full failure.

The competition ahead between Vietnamese Facebook clones is now somewhat not very intriguing, as we’ve already sketch out the possible market leader. The more interesting thing is how the winner will find a way to make money on the back of their social graph and justify a differentiation with the original, authentic Facebook. For my part, I would stick to my viewpoint that Facebook is a uniquely US phenomenon and any attempt to replicate Facebook in another culture and country are too much risky, with China’s Xiaonei and the likes as good reference.

Microsoft offers to buy Yahoo, and the implications for Vietnamese Yahoo clones: Timnhanh, Zing and ChannelVN etc.

Now Microsoft has offered to buy Yahoo at 62% premium over Yahoo’s closing stock price, I guess Vietnamese Yahoo clones should be wide opening their eyes seeing what way to go ahead.

Microsoft is at its best a very 1.0 software company, still earning most of its income from selling operating systems and office suite. Yahoo under Terry Semel has moving, perhaps too quickly, into a Hollywood-style media company rather than a technology innovator. Both are trailing Google in online search advertising, the most lucrative part of the online ad pie. Would this marriage have a happy ending? In my opinion, yes and no.

Yes because by integrating Yahoo into its online business, Microsoft can strengthen its position in online ads, especially display and rich media, which will grow at a CAGR of 18% compared with that of 16% of search ads from now until 2012, per JupiterResearch. Yahoo owns some of the best web properties so far, especially Yahoo Mail, Flickr and Yahoo Answers. This would be the most meaningful outcome of this possible marriage. Of course the newly combined Micro-hoo can still strengthen its online services like Yahoo’s decent Zimbra and Microsoft’s Office Live, but given the importance of Microsoft’s cash cow Office, I guess Zimbra would soon disappear.

No because apart from the only meaningful strategic move above, a combined Microsoft-Yahoo can only do that far. Both Microsoft and Yahoo are in their full bloom midlife identity crisis. Microsoft and Yahoo’s problems are not technology, or strategy, or leadership, or executional problem, but more a branding problem and to a larger extend, a vision problem. At its core, Microsoft positions itself as a software company. Yahoo’s positioning is an online media/content company. A combination of a 1.0 web company and another 1.5 online giant (Yahoo did own a number of web 2.0 property, notably Flickr, Upcomings, Del.ici.ous, Answers etc.) would do nothing to create a strong enough force to overcome Google in search and a number of other web 2.0 representatives, most notably Facebook. Google and Facebook’s positioning is amazing clear and powerful, i.e. organize the world’s information and help people best connect with their friends. Where is the newly combined Microsoft-Yahoo going, and is there something new in their positioning and value proposition, no one knows yet.

It should be noted that in the past two years, a number of Vietnamese Internet startups have deployed their resources to build their own “Vietnamese Yahoo”. Marquee brand names include heavily funded Timnhanh.com (by DFJ VinaCapital), and the recently launched Zing franchise from VinaGame. VC Corp., an ambitious web 2.0 startup with clamorous $ 2 million funding by IDGVV, is also quietly testing its own portal ChannelVN.net. This is not to mention hundreds of small web companies in Vietnam that are busy preparing their own Yahoo clones. The rationale goes like this: many US Internet models can be “translated” into Vietnam, just copy the model, the interface, tweaking a little bit, and you have a version for Vietnamese people that some day will become cash generator (perhaps through an IPO or an acquisition). Also in light of this rationale, the oldest US Internet model like Yahoo, eBay and Amazon should have the highest rate of success. Easy to understand this rationale has spurn out Chodientu, Timnhanh, and the likes.

However, things turn out not to be that easy. There are two reasons. First, Vietnam is not the United States, and Vietnamese consumers’ behaviors and psychology are not the same as those of their US counterparts. Second, Vietnam’s Internet landscape is also moving at a 2.0 speed like other countries, including the United States and the South Korea. That means if Yahoo is the hottest Internet company in the United States in 2000, then 2001 would be the deadline for a Vietnamese Yahoo clone to establish its footprint. A Louis Vuitton signature bag that is a trendsetter in the United States in 2000 would never become a hot item for Vietnamese fashion lovers in 2008. Another example is Cyworld’s Vietnam exploration. How can a hot fashion item in the South Korea in 1999 become a hot item in Vietnam in 2007? Are you so dreaming?

Things would be more interesting to know that web 3.0 are now well seeded in the United States, and only Vietnamese companies that are brave enough to fast-forward the 1.0 and 2.0 models would be better positioned in 2008. One thing about web 3.0 is vertical. Vietnamese Yahoo clones are so horizontal. Worse, their dreaming of an Yahoo acquisition now seems more unpractical. Perhaps instead of cloning web 1.0 and 2.0 stories, they should think of some 3.0 models that are not even going mainstream in the United States. However, discussion about web 3.0 Vietnam should be another long story, and might be a little bit early now.

Vietnamese Dotcom of the Year 2007: IDG’s 18 “ventures”!? – PART I

This is not going to give a prediction on the looming TIME’s Person of the Year 2007 but a borrowing of their brilliant concept to Vietnam’s dotcom landscape.

If 2007 was remembered as a year that Vietnamese Internet startups going mainstream, then it is IDGVV’s activities and their “ventures” that attracted the most attention. No doubt IDGVV and its investee companies should be named Vietnamese Dotcom of the Year 2007.

However, this is not the total sum of equal parts: some of the companies in this team are highly successful, some has lost all its IDG halo effect, and some are half way checking direction to a light at the end of a tunnel. Hereunder is a brief scorecard of key players in alphabetical order.

Aha.vn
This CNet clone is adding more exclusive contents to its technology portal with news articles, shopping comparison features, video clips, product reviews. Actually Aha.vn has created some really good contents. However, it is having difficulty attracting a critical mass user base and finding a relevant revenue model. Creating quality contents like Aha should requires a lot of capital spending and editorial competency. In 2007, Aha hasn’t made any considerable progress in terms of product and customer acquisition. Meanwhile, Thegioididong and other mobile phone/computer retailers in Vietnam with decent revenues are creating even more attractive contents than Aha.vn. Expecting quite a long time before Aha.vn craft a value proposition that is attractive enough to Vietnamese Internet users and advertisers, and strong enough to fend off mentioned competitors. Now DDTH is acquired by VinaGame, maybe Thegioididong should use some small change from its $4.5 million funding from Mekong Capital to acquire Aha.vn so that all Aha, IDG, Thegioididong and Mekong Capital can say aha all day.
2007 Scorecard: C+

Chodientu
Chodientu is finding a reality that replicating a solid business model from the United States is not an easy task. It has made almost no progress in moving mainstream and acquires more customers. Moreover, it is still not completely recovered from the Huy Remy hacking scandal that tainted its founder, the companies and its stakeholders. Now ebay has launched a Vietnamese version, the rumour that Chodientu is negotiating a 1 million sell out to eBay seems unrooted. PeaceSoft would have to work very hard or its ebay Vietnam’s dream will evaporate and it would become the most clamorous web failure in Vietnam’s Internet history.
2007 Scorecard: C-

Clip.vn
Clip.vn has made some good progress in customer acquistions and product improvement in 2007. It has been experimenting with in video banner ads but with limited success and the clientele is only restricted to few small advertisers. However, Clip.vn should be careful with other YouTube clones that are preparing their inroads. Looking to China where there are hundreds of YouTube clones that no one has been successful and is desperately waiting for Google’s acquisition, Clip.vn would have many challenges ahead.
2007 Scorecard: A-

Cyvee
This LinkedIn clone had a solid business model, a good start, a promising platform, and more than adequate funding. Therefore, Cyvee is well positioned to become one of the most successful web 2.0 stories in Vietnam. However, Cyvee is having some challenges crafting a tangible value proposition to its core business executive audience. To preempt a slowdown in customer’s acquisition and traffic curve, Cyvee is launching heavy but costly advertising programs. So far it has recorded some early success, however the long term vitality remains to be seen.
2007 Scorecard: A-

Coming next: I will write on Cyworld Vietnam, Diadiem, GFM, SanOTC, VC Corp

What is happening to Cyvee, what will?

As my prior prediction on Cyvee’s booming traffic rank on Alexa that “this won’t last long”, you might find something interesting here: http://www.alexa.com/data/details/traffic_details/cyvee.com

After peaking in early November following an IDG Ventures Vietnam funding clamour, CyVee is experiencing its first challenge. Though subscribed members have climbed from 12,000 to more than 13,000, its ranking on Alexa is going downward. While Alexa should not be considered as the standard of web ranking, it is enough to reveal something about CyVee’s traffic, other factors equal.

I’ve written on Quang’s blog that CyWorld and CyVee are the two best social networking platforms in Vietnam so far. I still stand by this argument. However, even a brilliant business model with proven success in other countries (Cyworld and LinkedIn) when copied in Vietnam will find some daunting tasks repeating a similar success.

I have to admit that I use Cyvee as pure curiosity and as a “must” for a person so interested in this industry as me. In fact, I found there is almost no use for my appearance on CyVee. Most of my relationship are very “1.0″ without the need to pronounce on CyVee. Checking with some boards of directors that I happen to have a sit in, almost no senior executive over there have a Cyvee account. Some have, but almost never use CyVee’s services. Looking at Cyvee’s members, most of the enthusiasts are students and middle managers.

I guess because time is a luxury to all senior executives, you must bring something really valuable to them. Otherwise you cannot persuade them to indulge in your services by consuming their luxurious time.

Jason just posted an interesting observation on the situation of Cyworld Vietnam in his blog. Now the two best platforms, Cyworld and Cyvee, seem to see many challenges ahead, it would be interesting to wait what will happen next to Vietnam’s web 2.0 spree.

The story is now more interesting if you notice that News Corporation is planning an acquisition of LinkedIn. With News Corp.’s not very excellent track record in evolving and replicating their web 2.0 business models around (remember MySpace’s lost against Facebook, and where is MySpace China now?), expect Mr. Murdoch to turn LinkedIn into something similar to WSJ rather than an emerging technology platform. LinkedIn’s owners might be busy now working on their Open Social process with Google before selling to News Corp for a better price tag, so don’t expect them to look for Cyvee in Vietnam for an acquisition.

Another problem with Cyvee is that News Corp has developed a reputation adapting their business models in other countries on their own rather than acquiring someone else. Remember Ms. Deng’s MySpace China, and Murdoch’s StarTV expansion around Asia? Therefore, while LinkedIn can fetch its owners some $4-6 billion from Mr. Murdoch (this is my own valuation of LinkedIn based on their current revenues/profits and an estimated “social networking multiple”), a price for CyVee would be at a far horizon.

May be time for another exit strategy? Maybe, but CyVee needs to address its downward picture first.

Vietnamese Facebook clones’ face off: FaceViet vs. GuongMat vs. Tamtay vs. VC Corp vs. you name it…

More Vietnamese Internet players are joining the Facebook cloning bandwagon, and there are 15 billion reasons they may end up like their Chinese counterpart Xiaonei.

Coming earliest to the field should be GuongMat.com, an exact Facebook clone from design to functions to everything. It is rumored GuongMat is put up by an oversea Vietnamese. GuongMat’s advantage is its clean and intuitive interface and easy to use Facebook functions like photo and message. However, that’s all what GuongMat have on its face. With these assets, GuongMat might have 240 million improvements ahead before becoming a Vietnamese Facebook.

Tamtay.vn is the second guy entering the field. Actually when entering Tamtay, you should expect a buffet of web 2.0 mess, from video clips to photos to everything you can imagine. The only thing why I categorize Tamtay as a Facebook clone is its recent redesign to look exactly like Facebook. Tamtay is in a serious identity crisis, and until their management can pronounce concisely in one sentence what business model it is hatching, another 240 million improvements should be worthless.

Interesting enough is new comer FaceViet, which will launch amid fanfare from this November 20. Khoa Pham assembled a very interesting feature on FaceViet through his interview with FaceViet’s CEO, so I would not elaborate more on this. From my point of view, FaceViet has a cool name and a pretty design, taking its dark red as signature color (although this makes the site too feminine). I would say this is a very smart identity move, as it is exactly opposite to Facebook. Key functions of FaceViet are news feed/mini feed, photos, events, super wall etc. FaceViet’s clever product strategy should make it one of the first to earn Vietnamese Facebook clone marquee.

It is rumored VC Corp, one of Vietnam’s leading web 2.0 players with popular Baamboo and Sannhac services, is also busy preparing a Facebook clone. This might create a lot of difficulties for FaceViet, as VC Corp is well known for their technology capabilities and smart marketing concepts.

The face off between Vietnamese Facebook clones therefore will just intensify in the coming time, but it is easy to see a future between the two horses: FaceViet and VC Corp. FaceViet have assembled a group of passionate and well-educated management team. It has done some early good work in brand identity and technology platforms. Meanwhile, VC Corp’s people have a team of very experienced managers but not just simply theoretical knowledge. They well know the pulse of the market, and is a deep pocket player as well. One more thing that FaceViet can not match VC Corp is VC Corp’s unrivalled reach through its key web properties. My prediction is that VC Corp will soon surpass FaceViet in terms of customer acquisition and become the No. 1 Facebook clone in Vietnam.

A subjective prediction it is, but any winner in this red sea battle will find it in another challenge: how to find the vitality for its Facebook clone. I would stand by my viewpoint that Facebook is uniquely a US phenomenon. Any attempts to replicate Facebook in another culture and country are risky enough. All Vietnamese Facebook clone should look to neighbouring China to find heavily VC-backed Xiaonei, the most successful Facebook clone ever in Asia, as a good example. Vietnam, like China, has its own cultural context and any attempts to replicate international business model with “top-down” approach rather than from “bottom-up” demand analysis should have to pay a considerable price tag.

Maybe in one years’ time, all my predictions will be proved utterly wrong. In that case, forgive me for a viewpoint that has taken Vietnamese culture, context and consumer insights too far in business strategizing.

Giant FPT experiments new social networking services

As I wrote earlier, more players are crowding into the social networking services game in Vietnam. Newest comer: FPT Online, a poster child of the FPT conglomerate.

Joining Yobanbe, Timnhanh Cafe, Cyworld and hoping to take a bite at Yahoo when its Yahoo 360 services is having problems remake it Yahoo Mash, FPT Online introduced a 360 clone with the name Your Gate SNS. You can have a quick look at a member I found here: http://your.gate.vn/LeNa

Your Gate claims it is easy for its member to transfer all virtual assets on their blogs from Yahoo 360, Timnhanh or Yobanbe into Your Gate. Theme design is much like Timnhanh, but worse. Looking at the positioning, I think FPT is planning a Yahoo 360 alternative and competes with Timnhanh and Yobanbe. Is it worth doing this, while Timnhanh and Yobanbe are struggling themselves?

Jason did a brilliant work recently mentioned FPT’s new 2.0 strategies and its plan to enter the competition. However, like my comments on Jason’s blog (http://jasonlog.supersized.org/archives/96-Can-FPT-2.0-Boost-Its-Share-Price.html#comments), this is an example to prove that FPT is too big and too rich to make forays into web 2.0 space. Maybe FPT should use its stocks bubble to buy Timnhanh rather than developing a copycat in a ghost house where everyone are yet to know what to do next. This would solve both exit strategy for Timnhanh’s investors and FPT Capital’s invesment math

My guess is that Your Gate will burn some good money from its deep pocket mother and finding itself in a struggle like Yobanbe and Timnhanh Cafe. In the meantime, it would be exciting to see how another FPT web 2.0 child Xiklo debut.

My crazy comments on the future of Google

I wrote a comment on Google’s future recently on New York Times. Repost here for Vietnamese entrepreneurs as a food for thought. Some day I will come back with a fun prediction on who will be the Google of Vietnam.

WHY GOOGLE SHOULD BE WORTH MORE THAN P&G, MICROSOFT AND GE COMBINED

I would predict GOOG surpass MSFT as the biggest company in terms of market capitalization within the next 2 years and well on its way to become the most valuable company in the world. This is why:

1. Business Model. Google now is more than a search ads company. With the global ad revenues of $400b and US revenues of $300b, there is no way for Google to scale their ad revenues growth (both search and non-search, including hot growth engines display, video, mobile), notwithstanding profits and market capitalization. Still, Google is morphing itself into a true web services company by venturing into office suite software (online), web analytics ultilities, mobile ads etc. GE is the king of Industrial Age. Then came in P&G who became the king of Consumer Goods Age. Then Microsoft, the king of most recent Information Age. Google’s vision to “organize the world’s information” and what it is doing proved its potential is far and big enough to make it the king of future’s Information-based Economy.

2. Sustainablity. Why I agree with some of you that Google’s business model, i.e. search ads, is replicable, Google is quite a different species. Its brand now has unmatched equity that a second search ad disrupter would find extremely difficult to match. When Google has become the Coke of search ads, expect another century for the Pepsi of search ads to surpass its No.1 position. Moreover, Google is fueling its sustainablity by recruiting the smartest people, and building the best web services brands.

3. Core competency expanded well beyond search ads. Google’s core competency now is Innovation. And it is fueling this core competency improvement with an unrivalled free cash flow that no technology company in this world could dream of. This would make its competitors sweating just follow them and duplicate these things.

4. Learning the best of GE, P&G and Microsoft to apply to web space. Google has learnt the lesson of recruiting and developing the best people from GE, applying it to recruit the smartest tech people. It borrows the art of brand management from P&G to build, acquire and manage the web’s leading brands, including Google, YouTube, Orkut, Blogger, Gmail, GTalk, Picasa, to name just a few. It is venturing into Microsoft’s backyard, i.e. office suite and other softwares.

For these reasons, don’t think that Google is just a fad. It has become a system of core competencies, and this is what will make them dominant in the future Economy 2.0 and super valuable in that future. The only thing that should stop this engine and crash its stock lies in itself if all four things I mentioned above is not relentlessly continued to be upgraded and let other competitors step in.

Harry Do
http://harryd844.wordpress.com

IDG linked CyVee in

Vietnamese media reported on Oct. 30 that IDG has invested in local business social networking startup CyVee with an undisclosed amount. Now IDG has heated up the social networking play in Vietnam again, it might be tempting to see the scorecard of their portfolio.

CyWorld Vietnam is the first SNS that received IDG’s money. It hopes to duplicate the success story of itself in South Korea, where it is the biggest SN player with more than 20 million members. CyWorld Vietnam claimed they have recruited 100,000 subscribers since its inception early this year, and is looking at the 500,000 landmark by the end of this year. How successful is CyWorld Vietnam? So far the opinions are mixed. Many Vietnamese teens loves its Korean-style design and appearance. However, some more mature and practical teens complain CyWorld is too sweetie teeny, too “closed”, and costly as CyWorld sells their personas and other items (I guess Vietnamese teenagers might not be as wealthy as their Korean counterparts). Nearly one year after its debut, CyWorld Vietnam are still halfway checking if their fee-based business model and Korean anime style would drive Vietnamese teenagers crazy like Bi Rain. Otherwise, CyWorld Vietnam might find itself in a similar position like its US sister.

Yeuamnhac is the second player in IDG’s portfolio. It has been in a mysterious quiet atmosphere since receiving IDG’s money, except for a redesign of the website and the adding of video sharing functions. Yeuamnhac is in a heavy competition with very strong newcomers such as Zing MP3, 7Music/7Sac, Baamboo Music, Nhacvui, and a jungle of amateur music websites. While Baamboo or 7Sac’s business model has been proved in other part of the world, Yeuamnhac’s business model is uniquely Vietnam and that’s what makes them find difficult to go ahead. What Yeuamnhac should urgently do is to differentiate itself amid the mushrooming of online music services in Vietnam, or it would be ending as the weakest link among IDG’s connects.

Yobanbe is another IDG’s involvement. It is a service launched by VinaGame, which is touted to be “the most successful” invested company of IDGVV. Well equipped, but Yobanbe is losing steam in its battle with Yahoo 360. Now its parent, VinaGame, is launching a full throttle attack against Yahoo with its Zing franchise, Yobanbe might expect to receive less attention from its mum. One options is to let Yobanbe go wherever it takes before Zing can outchat Yahoo, or the Zing franchise would find itself behind its respective competitors in every war.

Clip.vn has been quite successful in drawing in viewers and boosting traffic. This YouTube clone is now trying to find the way to monetize its property. It has introduced both display ads and in video banner ads, but the results are still limited. Clip is burning more bucks than other social networking for its servers, so it would be more difficult for them to achieve break even. Though gaining some momentum, Clip will find it difficult to stay independent, just as original YouTube had. Therefore, an acquisition by a power player should be best for Clip’s investors.

Newcomer CyVee should be the most interesting to watch. With more than 11,000 members since its debut early this year, CyVee is doing quite well in a country where business users’ social networking habits is a novelty to most. The biggest challenge for CyVee is how to scale up and recruit a critical mass user base, otherwise it would be not easy to find decent display ads revenue. Even much heavier trafficked business online news website VnEconomy is finding out that online display ads revenues are so small compared with its stable of magazines and newspapers, then how CyVee scale its growth is a thorny subject. The Chinese clone of LinkedIn is thinking of a “cooperation” with the original LinkedIn, so can we expect a similar move for CyVee? Of course not, at least until LinkedIn goes IPO, which might be a far future. Maybe CyVee should wait until Vietnamworks IPO in 2009, and sell to them or IPO with them.

Scale. Monetize. Scale. These should be three biggest challenges to all Vietnamese social networking services. In the next few months, expect more Vietnamese SNS players to join the game just to see how they solve these three challenges.

Zing Chat prepares to sword Yahoo Chat

VinaGame is final testing its Zing Chat IM for an official launch in early November. In fact they bought the popular QQ IM from Tencent and localized it for the Vietnamese market.

VinaGame is more known in Vietnam for its online game. Some PR work in Vietnamese media stated the company’s revenues at $40 million (amazing!). Their games are mostly licensed from Chinese supplier. Now the company is hoping it can become Vietnam’s Tencent and its coming IPO next year would make it laugh all the way to the bank, at least similar to the story of Mr. Ma’s Tencent in Hong Kong. Tencent is worth $8b, so why Vietnam with 17 million Internet users, a tenth of China’s Interent population, should not be worth north of $800m?

VinaGame is dreaming big before with the launch of social networking Yobanbe and music search engine Zing MP3. They’ve just launched their Zing portal. Now came in the IM sword. It seems VinaGing is very serious.

Zing Chat has a bundle of strong points. It offer many cool and cute avatars, very 3D polished indeed. This might be welcomed by Vietnamese teenagers, who are using Chat services like there’s no tomorrow. It can webcam chat with 5 persons at the same time. Sending file is a click at ease. It is integrated with Zing MP3 so that you can listen to popular Vietnamese songs. VinaGame plans to develop more entertainment apps for their QQ pet, so expect more to come.

However, it seems Zing Duck will find it difficult to sword at elephant Yahoo IM’s back. Vietnamese users has so attached to Yahoo that leaving Yahoo IM for Zing QQ seems unbelievable to most. Zing Chat is heading to become the multifunctional Swiss knife with a strong confidence than ever. However I very suspect the effectiveness of this approach.

You can listen to Vietnamese music song with Zing Chat. Ha! Teen should be more comfortable using another online music services like Baamboo, 7Sac, Uizaa, NhacVui, and even Zing MP3 itself. Or for a very smart teen, why should not download the songs she likes from these services and play it from her desktop with Microsoft’s zurassic Music Player? How about sending multi GB file? You can use yousendit, or megaupload, or FPT’s xiklo. Cool and polished avatars cannot help here. The only thing that I like is webcam chat with 5 persons. Might be VinaGame has just found out that Vietnamese teenagers love video conferencing, as many of them love to become future business executives some time? Even that way, can you chat with 5 people and looking at 5 screens at the same time and find it’s a worthy Internet experience?

I like Zing’s ideas and their ambition, but feel anxious if they are going to battle Yahoo this way. You cannot overcome the market leader by becoming better.

Or maybe you can, and you make the history.

Of course I have enough time to wait and see.