This is Bessemer's first investment in China (excluding Mosel Vitelic in Taiwan), and stems from the great work of Hans Tung in our Shanghai office. Bokee exemplifies the kind of high-margin consumer technology venture I profiled in my road map post--with consumer generated content, viral growth, and proven consumer appeal. And Bokee benefits from all three major catalysts behind Bessemer's interest in consumer ventures: rapid evolution of mobile services (Bokee sells mobile access to blogs), emergence of consumer classes in India and China, and the highly accelerated adoption rate of successful applications.
As Red Herring reports (though I couldn't tell you why), it was Bokee that first compelled me to explore the blogosphere.
http://cyber.law.harvard.edu/globalvoices/2005/08/04/chinese-bloggers-criticism-over-bokeecom/
ReplyDeleteIn China, Bokee is not known to be best or the most honest of corporate citizens (see above link from Harvard's Global Voices). Similar coporate practices by a US company would have created so much backlash that VC's would have stayed away (Claria). My question is whether 1) Bessemer was not aware of those issues 2) did not care cause bottom line was more important 3) believe there is another side to the story. I'm assuming #3 and would like to hear Bokee's version.
Will,
ReplyDeleteAs you can tell from the tone of my response below, I resent the implications in your question.
Most VCs stayed away from desktop advertisers because those companies successfully installed difficult-ro-remove adware (what some would call malware) on millions of desktops, not to mention certain other practices like affiliate revenue theft. Not only did these practices run legal risks, but success was unsustainable due to consumer backlash.
Your issues with Bokee are, in contrast to desktop adware companies, ridiculously trivial. According to the post you reference, there is semantic disagreement as to the accuracy of the meaning of the company's name. (Did you know that Google INTENTIONALLY mis-spelled the word googul?) Secondarily, there are prudish bible thumpers who don't like the sexually explicit nature of some bloggers, as if they have no choice but to read it. (How many times has your own company eBay been sued for the content you've posted?) Finally, there was some legal ambiguity as to the extensibility of copyright to the internet--exactly the kind of ambiguity that Google is currently fighting in federal court.
Your subjective comment that "Bokee is not known to be best..." seems to contradict the reality that in one short year Bokee has overtaken the competition to become the dominant blogging platform. (in fairness, though, your blog profile does warn your readers "not to expect logical reasoning")
So the answer is: 4) We see no problem in any of Bokee's behavior. You know from my blog that I readily concede errors, but first you're going to have show me something infinitely more convincing than a random post about the Chinese etymology of Bokee's name.
Mr. Cowen,
ReplyDeleteI certainly did not expect your resentment nor solicit it. (that would spell career suicide for someone so insignificant compared to you :) ). As such, I would first apologize for the implications of my questions, it was rash and inconsiderate.
I should have been more specific. I do not find the commercialization of blogging an issue (the real concern of naming blogs=bokee) and nor do I find sexual content offensive. I do find the copyright issues mentioned in the article a concern. A search engine serving explicitly crawled search results (with proper attribution and hyperlinking) vs. copying content from someone else's blog to draw traffic w/o proper quoting and hyperlinking is not trivial (based on US journalistic standards). Whether that is better or worse than adware, I'm not sure. (In fact I have no other evidence Bokee did so except in the article and hearsay from friends in China). I was expecting choice #3, where the article did not get the facts correctly.
My reference to Claria was meant to show that sometimes even when a company changes its pratices (as Claria wants to do) and what Bokee obviously is not doing anymore, its impact can be long lasting and irrepairable (but not in Bokee's case). I did not try to imply whether one is worse than another or even comparable. Again I apologize for a short and cryptic comment. What I wanted to get from you was whether as someone from the US, we should or should not apply the same ethical standards to companies outside of our culture. 3721 could easily be considered a spyware/adware company but Yahoo! and many Chinese do not seem to care/mind (some do) due to its popularity (also seeing Bokee's popularity). I can infer from your comments that you believe we should not impose our standards upon others and should let market (locally) apply their own (vote based on adoption/traction). As for for my employer, I cant speak for it nor can it speak for me. Again I'm just a cog in a big machine. . . insignificant cog at that :)
There are a few well-known issues with bokee:
ReplyDelete- creditability issues: bokee obviously blowed the number of their users. they claims they have more than 2 million users. however the true number of bloggers in their site should be less than 1 million. The trick is the 2 million is the registered users in their forum. but who knows how many users they really have. their traffic is also doubtful. their team members have been criticized for their own credibility issues for a long time. Both Fang Xingdong and Lu Liang have use ph.d. titles before graduation. Fang has not finihsed his phd after 9 years!
- Copyright issues: bokee is notorious on this. they stole other Internet writers' work without paying a penny. Fang is also notorious for his theory of anti-copyright.
- Spyware issues: their bookmarking tool has been criticized as a malware.
Good luck with your investment. If you think you can understand bokee assuming you can know some chinese, i have to say that's kind of naive.
have to put this point in a seperate comment otherwise the system blocks me
ReplyDelete- Ethics issues: they criticized the spreading of adultcontents and sexblogger Mu Zimei about one year ago. but in order to boost traffic, they provide adultcontents and mobile services and hired Mu Zimei recently.
Anonymous and Anonymous:
ReplyDeleteI will never delete comments on my blog (except from spammers), but neither will I condescend to respond to every anonymous coward who maligns a person or company with unsubstantiated reports of supposedly "well known issues", "notorious" behavior, software that "has been criticized" and having "obviously blowed [sic] the number..." These characterizations fail to meet the test of relevant and scientifically verifiable hypotheses. (well known, obvious and criticized by whom? you?)
I will however, respond to the characterization of me as naive. Bessemer has been doing this VC thing for a while now. Our experienced team of investors--some fluent in Mandarin--assessed this investment with seasoned due diligence. (You ask "who knows how many users they really have?" The asnwer is: we do.)
True, I said I would investigate Bokee's business once I learned to speak Chinese. That was a joke.
Will,
ReplyDeleteThe copyright question is past--not one that we expect to haunt the company forever, which is why we didn't really focus on it.
A better question might be how we feel about investing in a company like Bokee that must censor political expression in order to stay in business? In the US, such behavior would be worse than malware.
I think you raise an excellent point in general--that as we invest more in China and elsewhere, we ought to have a clear sense of how we think about cultural ethics.
Hi David,
ReplyDeleteAs a Taiwanese American who is very familiar with Chinese culture and the way the mainland Chinese do business, I tend to view opportunities in China with a very skeptical eye. It's hard to believe any claims from Chinese companies after seeing my parents and family friends plow millions of dollars into China only to see their meager profits and original investment completely eaten by corrupt government official and untrustworthy local partners. Most Taiwanese businessmen still bank primarily back home in Taiwan because they never know when some official might freeze their assets in China. Rule of law is very weak in China and subject to the whims of the Communist party official in power. Beware!
John Yau
Some rumors about Bokee:
ReplyDeletehttp://www.haiguinet.com/showtopic.asp?ID=862742
Hi David:
ReplyDeletedo you know how many percentage of Bokee's take does the $10 million investment take?
Bokee Lays Off 100, Strategic Shift
ReplyDeleteConflicting stories from different sources. The English news sources seem to imply a pretty dire situation. The Chinese source signals only a strategic re-focus onto blogs rather than making a portal play. It'll be interesting to see how this one turns out.
See:
http://www.interfax.cn/showfeature.asp?aid=8636&slug=BLOG
http://www.pacificepoch.com/newsstories?id=P49143
For those of you that read Chinese:
http://tech.sina.com.cn/i/2005-12-22/1909800256.shtml