As one Chinese media observer noted to Media: “I didn’t even realise it had come back in.”
What’s interesting, though, is that AOL made all the right noises. It relaunched as a portal last year (its previous Chinese incarnation was a doomed attempt to be an ISP). At the time, its China VP Norman Koo claimed it could carve its own niche.
What’s interesting, though, is that AOL made all the right noises. It relaunched as a portal last year (its previous Chinese incarnation was a doomed attempt to be an ISP). At the time, its China VP Norman Koo claimed it could carve its own niche.
He talked about localisation, about partnering with local content providers and about targeting new Chinese users, rather than the hundreds of millions of existing netizens who already have their portals of choice. Yet still it failed.
China and other emerging markets should be the best hope for all-in-one portals like AOL. Such services are great for people when they first get onto the web and need a bit of help to find their way round. But all the evidence from the West shows that once consumers reach a certain level of proficiency (normally just a matter of finding Google then working out how their browser’s bookmark function works), they’re quite happy exploring the web unaided.
But AOL’s latest departure highlights the problem for these foreign brands. They are, well, foreign. The idea that Sohu could set up an English-language version, find a few local content partners that don’t already have web deals then take on the giants of the US market is preposterous. Yet somehow when the tables are turned there’s still an assumption it can work.
The first time the US giants targeted China, they blithely assumed that Chinese users would lap up whatever was popular in the West. That clearly hasn’t happened - MySpace first tried with limited success to introduce its own brand of social networking, and now Facebook is making very tentative steps into the market. Through sheer persistence Google has built itself a decent market share, but still lags Baidu, despite the scandal that engulfed the Chinese search giant last year.
The ones that have not yet retreated with their tails between their legs have realised that China has an internet culture that is completely different to the West and also moves very quickly. We saw last year how social networks such as Kaixin001 could emerge from nowhere on the back of a couple of viral applications. And we saw how quickly rivals will copy such points of difference.
What that means is that there is still very much to play for in the Chinese internet market. The bad news for the likes of AOL is that you have to have your ear to the ground to do it. Brands such as QQ and Taobao now make sizable profits, but it’s taken them a long time to make it work. Most US-based brands - especially now their home market is in decline - have neither the time nor the money to do China justice.
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