Forming a platform

In 2004, when the Chinese stock market was in the doldrums, Xiong Xinxiang discovered that the transaction fees collected by the government and the exchanges amounted to five times the profits of all the companies listed.

This taught him the power of the trading platform - no matter if an investor loses out or benefits from stocks or if a company is performing well or badly, those controlling the platforms are always winners.

Microsoft and Google consolidated this revelation: Bill Gates has been the world's richest man for almost a decade because Windows is a platform that almost all hardware and software vendors as well as end-users rely on.

Google has become the largest threat to Microsoft because its platform is taking Windows' place in the Internet era.

So when Xiong, a founder of software firm Born Technology Co Ltd, decided to enter the Internet business in 2004, he chose to build an online platform.

"My target is a consumer-to-consumer (C2C) platform without dominant players," says Xiong, the chief executive officer of Born.

The 39-year-old was trained as an engineer and has worked in a number of areas - from computer sales to writing road toll management software.

His approach to the Internet business is unique. While many stars of the Chinese market founded their own websites with their own technologies, Xiong has chosen to act as an investor and borrow the technology to build an Internet empire.

In 2004, Qihoo.com caught his attention. The website searches all major BBS (bulletin board system) sites according to the popularity of articles, which satisfied Xiong's criteria for a C2C website with good business potential.

He took a minor stake in the website. But the firm was sold in 2005 to Zhou Hongyi, former Yahoo! China general manager and dotcom pioneer, due to lack of commercial operation experience and search engine technology.

The investment brought him a good return, but more importantly, Xiong's philosophy was proven effective.

Last year, he invested in four websites - Yiji.com, RSSMA.com, Hupoo.com and Zhubajie.com.

He positioned himself as chairman and investor, asking the websites' founders to continue running the companies, which he coordinated as a whole.

Xiong put Yiji.com, literally meaning a collective of ants, in a central position. The website works like the popular video-sharing website YouTube - users contribute their favorite stories or links and other users rank content and form interest groups.

"This is a typical C2C model. Consumers create content, which is used by other consumers, so the business model is very simple, but many businesses can run on the platform," says Xiong.

It can also be used as an advertising platform. Clients place ads targeting a specific group, similar to the models used by search firms Google and Baidu. And it is also an e-commerce platform, so people can buy or sell goods to people with similar hobbies, competing against companies like eBay or Amazon's Chinese business Joyo.com.

In the Internet era, people usually want things delivered, and this service also effectively hooks users so Xiong invested in another website, RSSMA.com.

The website uses really simple syndication (RSS) technology to aggregate blog updates and news sites, so users with similar interests can subscribe to information.

The search website Hupoo.com provides another tool. Xiong says the website is a search engine, but its results are based on the meaning of words rather than the words themselves, as is the case with popular search engines Google and Baidu.

So, if you search for "World Cup" on Google, you will get an introduction to the FIFA World Cup on Wikipedia and then FIFA's official website.

But Hupoo assumes that few Internet users in China are interested in knowing the history of the World Cup or what FIFA is, and instead want to know what is happening in World Cup qualifications and finals, so it lists news about the games first.

Zhubajie.com is the last website in Xiong's Internet stable. The site is named after Zhu Bajie, a character in the Chinese literary classic Journey to the West, who constantly seeks benefit for himself. Zhubajie, says Xiong, acts as a platform to bring benefit to users.

The site's Witkey service allows users to post a task and call for solutions, which they then pay for.

Local research firm CCID Consulting estimates there were 600,000 people working in the online services business in 2006 and predicts the number will grow to 9 million this year.

Xiong says Zhubajie launched last March but had few registrations until national broadcaster CCTV did a report on it. The website became an instant hit, with 2,000 registrations a day.

"If we can help 10 people to earn 100,000 yuan a year from Zhubajie, Witkey will become widely used," says Xiong.

He says most of the services traded on the site are to do with finding names, logo designs or translation, which command low fees of 1,000 yuan and under.

But Xiong's websites are still at an early stage of development, having been in operation for less than two years. He says increasing visitor numbers is the biggest challenge.

(China Daily 07/23/2007 page6)