It has been a fascinating year in 2007. A number of events have focussed attention on the Internet and the future. I had originally intended to write a column to look at ten years of the Internet and mobile phones in Southeast Asia. But I'll take up that discussion later.
The first was Baidu's IPO. Baidu is China's leading search engine. The perception that it is "China"s Google' set the stock on fire on its opening day as it rose from around $30 to over $150. (It has since settled at around $80 giving it a market cap of $2.5 billion.) Baidu raised over $100 million. For a brief period, it seemed like the dotcom heydays once again as discussions on revenues and profits were set aside. Investors who perhaps missed out on Google's IPO last year don't want to be left out! Another, Yahoo invested a billion dollars and handed over its Chinese operations to the local Alibaba management in return for a 40% stake in Alibaba. The deal valued Alibaba at $4 billion. Alibaba's flagship site is a marketplace for SMEs - helping Chinese SMEs sell to others in China and globally. Alibaba also operates two other sites: Taobao is a consumer auctions sites (in direct competition with eBay in China), and AliPay, which is a payments and settlement service along the lines of PayPal.
I have followed the fortunes of Alibaba since its early days. I liked the idea of an SME marketplace very much. At that time, Global Sources was the leader in the print media in helping connect SMEs. Alibaba raised a lot of money and went through many ups and downs in its journey. (There are two Harvard Business School case studies on Alibaba's early days.) Alibaba has crossed one mountain - another lies just ahead.
The battle for the China Internet market has been joined in earnest. Google may have a small stake (around 3%) in Baidu but will no doubt be looking for a bigger slice. eBay, which was also rumoured to be in the race to acquire or partner with Alibaba, will be contemplating its next move - hoping to ensure that the history in Japan (where Yahoo is the leader in the auctions space) does not play out again in China. For now, at least, the two events together put the spotlight firmly on the potential of the Chinese Internet. There are over 100 million Internet surfers and broadband penetration is increasingly rapidly. Baidu joins the likes of Sina, Sohu, Netease and Shanda in monetising the growing user base. The mobile users base in China is at over 350 million.
But, next logical question is: what is the end-game? Where are we heading towards? I can think of the answer from a the "Mirror Worlds". Mirror Worlds are what David Gelernter proposed in his book of the same name in 1991. (Another related theme is the Metaverse idea put forth by Neal Stephenson is his 1992 book "Snow Crash").
Today, I use Google as the window to the world of information. But search is just one way to navigate the web. Consider the analogy with a printed book. A book has 3 ways to browse it: table of contents (think of this as a directory or outline), index (the equivalent of search), or jumping to a page (typing a specific URL or finding it, quite literally, via a bookmark). On the Web, the index/search option has become the primary mechanism. For example, if my passion is science fiction, I am likely to have created a set of links and comments on books and ideas which would also be relevant to others interested in that topic. Others can 'include' my directory and build further.
Mirror Worlds are, quite literally, a replica of what I see happening around us. With a mix of user-generated content from their mobiles along with webcams and sensors, it will be possible to almost recreate the real world in the Grid. Mirror Worlds are, thus, microcosms of all that we see around us as updated as the real world that they resemble. They are accessible to us through screens on the devices we have our mobiles, computers, and perhaps, networked TVs.
This, then, is what I read in last year (2007). Emerging markets like China is where the future of the Internet lies. Google's actions only highlight the need for a Google for Emerging Markets - one that has to emerge from these markets themselves. That is the next big opportunity. This New Internet is going to be significantly different from what we have seen in the past decade. The time to get started to building it out is now.
What next?
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