Charles Zhang, founder and CEO of Internet Technologies China is in Boston, on a trip to promote his company's product, Sohoo.
He has reason to feel a sense of pride when he returns to his college town, because it was there that he convinced some MIT acquaintances (among them Nicholas Negroponte) to invest in Internet Technologies, which is now thriving.
Sohoo, mainland China's equivalent to Yahoo, has rapidly become the country's most popular search site and has attracted the business of major companies wishing to gain entry to this gargantuan market through advertising to its growing online population.
This month Zhang was listed by Time magazine as one of the world's top 50 Cyber Elite.
Wired News spoke to Zhang by telephone in Boston.
Wired News: You have been portrayed in the press as a Silicon Valley-style CEO, in a land without the equivalent structure of venture capitalism. Has getting investments gotten any easier?
Charles Zhang: Yes, 1998 has really been a year for rethinking venture capital here. Sohoo has actually become one of the first venture capital successes. It has stirred a lot of interest and talk among the government officials and the private sectors about China developing its own venture capital culture. So now it's getting easier, because a lot of Chinese companies are thinking of venture capital investments.
Because we are riding the wave of China's Internet content revolution, a lot of things we do are firsts. We are China's first venture capital-backed Internet company. We are Intel's first venture capital investment in China. We are the first major [Chinese] search engine and directory. We are the first to use an outside company to audit online traffic. So a lot of firsts draw media attention, and people talk about us on TV and in newspapers. All these things help, and in China Sohoo's brand perception is very high.
WN: How have your company's plans developed?
Zhang: At the beginning of 1997, there was a critical change: I decided that we would focus on content and not infrastructure. By the end of the year, we realized that original content might not be the way to go, that the intrinsic nature of the Internet is information sharing, so the best way is to aggregate content and do a search engine and tell people where to find things. That way, the whole Internet becomes a library or electronic marketplace.
WN: Do you think that the Chinese will turn increasingly to the Internet for news?
Zhang: Yes, and you can demonstrate that from the growth of the Internet population. People's enthusiasm for the Net is really very high. Now the infrastructure, bandwidth, and access cost is too expensive, but still it's growing so fast. Last October, there were 600,000 online, now it's beyond 1.5 million people.
WN: You have conducted a series of polls of your audience. What did you learn from this?
Zhang: Polling in the United States is a quite ordinary thing, but in China it is really groundbreaking. People actually had a place to vote, to express their opinion, like on the marriage act, and other things, like whether Clinton should be impeached. It has encouraged people's participation, whereas there are very limited opportunities for people to participate in things in China.
WN: Did anything from the polls surprise you?
Zhang: Yes, that a lot of people have the intention to buy cars next year. I forget the exact percentage. It really demonstrates our users: They are young, well-educated, and they look to the future.
WN: How do you see the Internet infrastructure changing in China?
Zhang: Access is still very expensive. It's now a dollar an hour. Competition is coming up this year, so that will drive the price down.
The competition is basically from a spinoff of the MPT, the Ministry of Post and Telecom. A lot of spinoffs of this former ministry are starting to compete with each other. Telecom has been accumulating wealth for the last 40 years, so they have the ability to build infrastructure throughout China. This is a positive force to accelerate China's Internet usage.
WN: Is there much dialogue in China about discouraging the development of information have and have-nots?
Zhang: There haven't been talks like this, because being an information have or have-not does not constitute a wealth difference yet. It doesn't reflect immediately into the rich becoming richer. I think it takes time for the economic value to be realized. Each municipality, however, wants to develop, and all the mayors want their city to be information-rich.
WN: How about Internet terminals in public spaces, like libraries?
Zhang: There has been talk about this, but that is slow because it's a government agency, and anything with the government is slower.
Internet cafes are another force for public access. They are doing quite well. There are hundreds of them, and they have access to capital.
WN: Back at the time of the Tiananmen Square massacre there seemed to be governmental worry because so many people used fax machines to get information from outside the country. Is there any resistance from the government toward what you're doing online?
Zhang: Eight years has been like eight centuries in China. People are busy doing things, and have less ideological concerns. Yes, there is concern, and we have formal contacts with the government officials about what to do and what not to do. We won't venture too much into talking about domestic policy or pornography.
ITC distributes Webmonkey content in China. Webmonkey is owned by Wired Digital, which also owns Wired News.
