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Business Impact

Web Dynasty

Ben Tsiang leads China’s dot-com surge.

In the frenzy of the Shanghai morning rush hour, Ben Tsiang is calm and composed. The executive vice president of product development for China’s largest Web portal, Sina, is a seasoned veteran of the Internet boom and navigates startups as deftly as he does the traffic around his company’s financial headquarters. “Ten years ago, people here didn’t know what the Internet could do for them,” says Tsiang. Now, Internet companies are helping Chinese users “leapfrog to the leading edge of technology and become even more advanced than the top of the pyramid in the U.S.”

Tsiang, in his mid-30s, is the face of a new generation of developers in the world’s fastest-growing Internet community. Historically, sources of news and information for Chinese citizens have been limited to state-run TV and radio. Tsiang and his peers have made their names creating homegrown Web browsers, portals, and search engines that offer more in-depth content and services than can usually be found on Chinese versions of American websites.

Like the rest of Sina’s top brass, which includes executives Yan Wang, Charles Chao, and Hurst Lin, Tsiang was trained in the West, which seems to have shaped his attitudes about information and business. From a prominent family – his grandfather was secretary general for Taiwanese leader Ching-kuo Chiang – Tsiang was born in California but grew up and went to college in Taiwan. As a graduate student at Stanford University in 1995, he cofounded Sinanet, an online news service directed at Chinese-language readers outside of China. Three years later, Sinanet merged with Beijing Stone Rich Sight Information Technology, a leading Chinese software and Internet company. The result was Sina, an all-things-Chinese portal with an emphasis on news and entertainment.

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It’s been a success by any measure. Since its initial public offering on the Nasdaq in 2000, Beijing-based Sina has grown into a $200 million company with 2,000 staff worldwide and has welcomed a total of 100 million registered users on its site. In China – which already leads the world in mobile-device users and is expected to surpass the U.S. in Internet users by 2007 – Sina’s potential for growth is staggering.

For now, says Tsiang, Sina is fortifying its position as a news leader and is expanding into search, e-mail, and mobile entertainment. In fact, the mobile market now accounts for 60 percent of Sina’s revenues, through partnerships with cellular service providers such as Unicom and China Mobile. And last February, Shanda Interactive Entertainment, China’s largest Internet gaming company and a top-rated IPO in 2004, bought a 19.5 percent stake in Sina – perhaps signaling a future merger.

But hurdles abound. Says Tsiang: “The Internet is a wide battlefield.” Up to this point, he says, China’s Web battles have played out much like in the West, but with the action compressed into two or three years. As Sina expands, it will need to fend off competition from more-specialized firms such as Beijing-based search startup Baidu. Another challenge: Sina and other companies must adhere to famously strict government regulations. Balancing market demand for Internet media, entertainment, and online gaming with state policy is “very delicate work,” says Tsiang.

On the business side, Tsiang warns, “Never make bold assumptions according to old perceptions. Always come back to the market data.” That’s particularly good advice in a country of 1.3 billion people whose tastes have sometimes been perceived as uniform – or at least predictable. Sina originally believed, for instance, that the largest mobile Internet market would be in huge, affluent cities like Shanghai. But demand turned out to be stronger in Henan, a rural inland province; Tsiang says Sina’s market studies hinted that the reason might be that consumers in Henan had more leisure time.

Tsiang’s experience also holds broader lessons for Web companies across the globe. He says it’s not enough to get the technology and business model right – you also have to understand local pockets of culture. Those companies that capitalize on this knowledge stand to do well in China and beyond. Says Tsiang, “This is where the major action will be.”

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