Page 25 - How China Is Winning the Tech Race

well-known local venture capitalists Andrew Yan, Kathy Xu, and Hugo
Shong, who take a 50 percent stake in the new businesses the contestants are
creating.

Shanghai buzz

Back in Shanghai at the diner, Chinese entrepreneur Wang passes his business
card to me. It identifies him as Gary Wang, founder, Tudou.com, which
translates as “couch potato.” Indeed, the site has addictive personalized
playlists and mini video sites that he claims can be customized even more with
layouts, colors, and music than YouTube. The site features standard stuff:
cute kitties, avant-garde clips, and demos of favorite recipes. An overseas
returnee, Wang, age 34, exemplifies the tech talent that is transforming China.
His résumé is power-packed: grad degrees from Johns Hopkins University
and France’s INSEAD and management posts at Hughes Electronics Corp.
and the German media conglomerate Bertelsmann.
Video sites are a new way for members of China’s first me generation to
express themselves in the country’s newly emerging capitalist economy. “I
started Tudou as a way to give power to the people,” says Wang, who grew
up in southeastern Fuzhou as the son of medical doctors and came to the
United States at age 19 on a scholarship to the College of Staten Island.
“There was a need for self-expression in China. We allow more room for
users to change things than most sites. It is amazing what they can do with a
little freedom.”
Tudou is one of several struggling but promising video sites that have
emerged in China’s always-on economy. Not a moneymaker yet, it has $27
million in the bank from venture capitalists. Revenues are insignificant, with
18
video ads by the big brands Adidas, Lenovo, and Sony the major source.
Tudou streams 25 million videos daily, not bad compared with YouTube at
100 million. The Chinese video site crashes about once a month from traffic
surges. Tudou is likely to be snapped up, but so far there have been no offers
such as Google’s $1.6 billion purchase price for YouTube in October 2006.
After the video demonstration, Wang suggests that we tour his office. We
pass Shanghai’s gleaming high-rises in downtown Puxi, cross Suzhou Creek,
and arrive at a gritty district called Warehouse Creativity Park that is home

Introduction xxi