Francois,
Far Eastern Economic Review lists article about MYWB. This is great news, the FEER is as respected in Asia as the Wall Street Journal is here.
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TECHNOLOGY COLUMN
Captive Audience
Television access helps promote the Internet in China
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By Susan V. Lawrence in Beijing
Issue cover-dated July 8, 1999
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China has a high level of Internet awareness, just 11 million personal computers, but about 320 million television sets. For promoters of set-top boxes that turn an ordinary TV into a tool for surfing the Net, that combination of factors makes China an obvious and attractive proving ground.
Already, international players are crowding in. On a visit to the southern city of Shenzhen in March, Microsoft chief executive Bill Gates announced the Venus project--plans for set-top boxes that use a Chinese-language version of the Microsoft CE operating system.
On June 24, San Francisco-based MyWeb Inc.com announced its China debut. Its "product" is really two: set-top boxes powered by MyWeb software and a Chinese-language portal, MyWeb Online China. The boxes automatically take users to the MyWeb site each time they log on. The company sees this as a way to guarantee a customer base for its portal--a point-of-entry Web site that typically provides news, shopping or entertainment. Being a provider of Chinese-language content, the company believes, will give it staying power even after set-top boxes become obsolete.
"They could literally give it away for the relationship they are building with the customer," Byron Constable, founder of Madeforchina.com, a Beijing-based Internet marketing company, says of the MyWeb set-top box. If MyWeb succeeds in its "heavy impact marketing," Constable says, it could establish formidable links with customers. Sina.com.cn, China's leading portal, "should be a little concerned about that," he says. "Sina might be getting some competition."
MyWeb is betting that Chinese will be drawn to set-top boxes because they are simpler to use than PCs. Just plug a phone line into the set-top box and plug the box into a TV; the box automatically dials up an Internet service provider. From their couches, users can explore the Web using a remote control and a wireless keyboard.
Another advantage is that the boxes are significantly cheaper than PCs. MyWeb boxes, the remote control and keyboard cost 1,488 renminbi ($180), about one-sixth what a Chinese PC costs. In comparison, Liu Chuanzhi, chairman of computer maker Legend Group, one of the Chinese partners on Microsoft's Venus project, has said Legend's set-top devices, which will also play VCDs, will cost about 5,000 renminbi.
The great hope for set-top boxes is that they will lure a broader range of people than use the Internet in China now. Official surveys show today's users, conservatively estimated at 2.2 million, are overwhelmingly male, young and technically savvy. Bringing the Internet onto the living-room TV would make it more accessible for the whole family.
But obstacles to the TV revolution remain. Although Internet access fees have been falling, they are still prohibitively high for most Chinese, especially the mid- and low-end consumers that set-top boxes target. China has about 320 million TV sets, but it has far fewer fixed-line telephones--about 85 million, both business and residential. And Chinese-language content on the Web is limited. These reasons explain the feeble sales of the handful of Chinese firms already selling set-top boxes.
MyWeb aims to be different. The three-year-old brainchild of three classmates from National University of Singapore, MyWeb flourished through the Asian financial crisis, listed on the Nasdaq stockmarket in February and has a market value of nearly $100 million. Now, the company is taking an innovative track into China. One key element is a deal with Beijing Post and Telegraph, a subsidiary of China Telecom. "Beijing Post and Telegraph wants to increase its Internet access base in Beijing," explains Danny Toe, 29, MyWeb's chief operating officer. "We are a natural partner for them."
The two companies will bundle their services. Beijing Post and Telegraph customers who subscribe to a second home phone line, for example, may be given free time on-line and offered a preferential price for purchase or lease of a set-top box. By the end of 1999, 200,000 boxes--10 times more than in Malaysia and Singapore, the company's core markets until now--will be in Beijing homes, the firm predicts. In Malaysia and Singapore, 70% of MyWeb customers already have home Internet access through PCs, says chief executive Thean Soon Wong, 28. In China, which the company hopes will be its No. 1 market, he says, most customers will be first-time "Netizens"--or users of the Internet.
MyWeb will use the boxes to build up a ready core of customers for the company's on-line services. The boxes take users straight to MyWeb's China portal at www.myweb.com.cn, where they will find news, sports, e-business and fashion channels, as well as competitions and prizes. Days after the official launch of the set-top box campaign and the portal, however, the site was still a work-in-progress. The e-commerce channel had just two offerings: compact discs and a local brand of water beds. Among future e-commerce partners in China, Toe says, will likely be personal-care-product giant Unilever, which sells its products on MyWeb portals in Southeast Asia.
MyWeb hopes to make money in part from advertising on the site. Toe says advertisers will be attracted because "we have a captive audience, we know how many boxes are out there, and we know how much people are using the box." MyWeb revenue will also come from licensing its software to Chinese set-top box makers--the company doesn't make the boxes itself, though it sells them on the portal--and from e-commerce.
Strategic alliances will help get the word out to consumers, Wong believes. Already on board are Beijing Post and Telegraph, leading Internet service provider Chinanet, and set-top box makers Soyea Technology Co. and Lang Chao. In July, MyWeb is to announce a partnership with China's official Xinhua news agency to develop an interactive news channel. An announcement with Chinese banks will follow, outlining plans for credit- and debit-card use for e-commerce.
"The set-top box is a transitional product," Wong candidly concedes. "Within the next 24 months, televisions will be shipping with Internet functionality imbedded." That doesn't seem to worry MyWeb. Toe says the company is already working on deals that will take customers to the portal directly from Internet-enabled TVs and PCs. That, he believes, will ensure that MyWeb will remain popular in China well after set-top boxes go the way of the eight-track tape player.
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