Pony Ma, Robin Li, and Jack Ma's First Dialogue: 37 Rounds of Applause in One Hour
Liu Erfly: Finally, I'd like to ask one or two questions to everyone here at the scene.
Liu Erfly: After listening to their speeches, I am really encouraged and confident about the internationalization of China's Internet. I wish them success. Because we are doing a live broadcast, many netizens have this question: There is a notion that in the field of China's Internet information technology, there is an increasingly severe phenomenon of state-owned enterprises advancing while private ones retreat. What do the two of you think about this issue?
Liu Erfly: Actually, hosting this session was quite stressful, with the aim of getting the two of them to debate. To be honest, this is the first time I've had such a dialogue with them, so whether it would succeed was uncertain. But I will try my best. In my mind, the Internet has three major components, one of which is Jack Ma, who is currently sitting below the stage. Our烽huo (fire) can burn both on and off the stage. I don't think these two need much introduction: one is Pony Ma, Chairman of Tencent, and the other is Robin Li, CEO and Chairman of Baidu. You two can talk about any topic anytime.
Wu Ying: Very impressive! At the beginning, everyone was still quite polite, but in the end, they couldn't help but ask each other some challenging questions. Thank you, host, and thank you to the two guests!
Audience Question: I’d like to ask Mr. Li a question. I feel that Baidu is quite different from Google. Let me give you an inappropriate analogy: Google is like Mercedes-Benz, while Baidu is like Zhonghua Car. For the most basic search, the difference between Baidu and Google is still quite significant. You can compare by using Baidu for a search and then using Google. Since I'm not a nationalist youth (fenqing), nationalists might support you more. In many aspects of use, it also relates to my actual projects; this is my personal feeling. What are your thoughts on this? Is there any way to catch up with Google? Google just moved its headquarters out, but it still exists. Google is indeed very strong; it’s a Mercedes-Benz, and you say it’s a Zhonghua. So, I started related work several years ago, although this may be a relatively long-term project requiring significant investment. But I believe that one day we will see that this investment is worth it. Everyone is now particularly concerned about Google's claim to exit China, and I am thinking: When will we be able to go to a certain country and declare our exit from that country? This requires global influence to be considered truly powerful, and I have confidence in China.
For us as well, if in the community besides individual charges, there should also be relevant advertisements. User activities within social networks, combined with personal data and content analysis, can generate commercial opportunities similar to search engines' business model.
Li Yanhong: Here's how I look at it. China is already the world's second-largest economy, with increasing national strength. It is impossible and unacceptable for a country with such a robust economy to lack globally influential companies. And during this process, we are part of a very sunrise industry. Through free market competition, the companies that emerge through struggles, I believe we have a responsibility to conduct this kind of globalization or internationalization experiment. Several years ago, we began related work. "To be truly powerful, one must have global influence," and I have confidence in China.
Ma Huateng: Our industry is still okay, but media-related fields like video should indeed have some. Recently, there have been many signs of this. This is understandable. I recently heard whether e-commerce needs a national team. I saw someone online write that e-commerce should never have a national gene because it won't work. I also heard Jack Ma say that if the country needs it, he'll hand over Alipay to anyone. Currently, things are still pretty good, and the situation remains relatively free competition.
For example, we are now studying parts of the IDC where 10,000 or even tens of thousands of servers form a super-large IDC. Container-like structures contain thousands of motherboards, massive CPUs, memory, all operating together as one computer, especially for search tasks. Operating in such areas is already a tremendous challenge. Globally, only a few companies can run it. This requires moving forward step by step. Thank you!
Tencent Model Has No Successful Precedent Globally
When discussing the issue of corporate internationalization, Li Yanhong said that given China's current national strength, it is unacceptable not to have globally influential companies. As internet companies in a sunrise industry, we have a responsibility to conduct this kind of globalization or internationalization experiment. Therefore, Baidu started related work several years ago. "One must have global influence to be considered truly powerful, and I have confidence in China."
Ma Huateng: I want to add a few words. I completely agree with what Li Yanhong just said. Tencent's situation is slightly special. We gained strong support from the Shenzhen government during our development. The first round of financing, at that time, we really couldn't reach any channels. Without the platform of the first High-Tech Fair, it would have been impossible to secure financing and thus Tencent's subsequent development. We are very grateful for this, and this is the main reason why we have long-term roots in Shenzhen. I take this opportunity to thank the city for its strong support.
Especially for emerging industries and rapidly growing markets, it is even more so. If your market grows tenfold or eightfold, a few percentage points more or less in market share doesn't make a big difference.
I think sellers have the right to choose Taobao, YaYa, Paipai, and various websites, but ultimately, as Taobao's power grows larger, costs become lower, and more people join, it might be better. It's always improving step by step. Still, this sentence holds true: If your competitor dies, you definitely won't thrive. You need a competitor to develop better.
Now, if we're not allowed to do anything at all, it's unfair. I would like to ask Pony: How can you do so many things successfully? What method do you plan to use to make Soso better than Baidu?
Expecting More Robust Government Regulation
I think the point Li Yanhong mentioned earlier is something I've been pondering too. He said there's nothing new now, just old wine in new bottles. I fear the worst when it comes to old wine in new bottles because you can't clearly see what they're playing with, and when it suddenly bursts, it's the scariest. If it's something you've never heard of, it's not scary. Yahoo did search engines, then Google came along, and many people thought Yahoo wasn't much different, but it almost ruined them.
The 2010 China IT Leaders Summit, co-organized by the Shenzhen Municipal Government and Digital China Association, was held at the Wuzhou Hotel in Shenzhen today. More than 80 CEOs of electronic information and Internet companies, as well as investors, attended the conference.
As the highlight of the main forum, the peak dialogue between Baidu Chairman and CEO Li Yanhong and Tencent Chairman Ma Huateng became the biggest focus of the entire event, repeatedly pushing the atmosphere of the main venue to a climax. Notably, just before this dialogue took place, the Chinese Internet had set two historical records: First, Baidu's stock price on NASDAQ successfully surpassed Google, breaking the American myth. Second, the number of simultaneous users of Tencent QQ broke 100 million people. These two miracle creators were precisely the two protagonists of the dialogue. Once this top-level dialogue between the two Internet giants was revealed, it immediately became the focal point of public attention. This segment was specially arranged by the organizers as the closing act of the main forum. The topics of discussion between the two giants had already become the hotly debated focus among attendees and the media during the lunch break.
Liu Erfly: They both spoke sincerely, but it lacked a bit of explosive flavor. In my mind, Baidu is China's Google. What does Tencent correspond to in the U.S.? Thinking about it, it's becoming more and more like China's Apple. Apple and Google in the U.S. were originally friends, but now they are increasingly moving towards confrontation. Your two companies so far have more complementary factors than competitive ones. If Google enters the mobile operating system, Tencent actually has the potential to enter the mobile operating system as well. Do you have plans to enter this field? Secondly, if there are plans, how will you face each other?
This market value has already exceeded the combined company of Unicom and Netcom, approaching China Telecom's market value. With such a large enterprise being privately owned, have you felt any support or pressure from the government regarding your further development? As private enterprises grow so large, are there any factors that might start to constrain your development? Could you elaborate on this?
Of course, some things here, we often encounter online, and many things become habitual. Newcomers to the internet might not be accustomed to some practices at first. For instance, I've gotten used to seeing posts criticizing me online, and it no longer affects me. However, many people might not find joy in seeing posts criticizing them, so there's an adjustment period. Over time, I believe both those being regulated and those regulating will feel more comfortable.
If future comprehensive business software, including various enterprise management systems within enterprises, can be handled via cloud computing without needing local area network servers, and instead rely on public network infrastructure to provide computing power, processing capabilities, and even logic components akin to water and electricity, these concepts do indeed have imaginative space. Perhaps after hundreds of years or a thousand years, in the era of "Avatar," it might indeed be possible, but currently, it's still too early.
Ten years ago, Sun Microsystems also proposed the concept of network computers, but no one believed it. Because it was too early, it became a pioneer, not only failing to transition successfully but also creating many problems. Its advocated concepts, reviewed now, were indeed premature. Just now, some professional technologies like email and search engines were introduced initially adopting cloud computing methods.
In the past decade, Sun Microsystems also proposed the concept of network computers, but no one believed it. Because it was too early, it became a martyr, not only failing to transition successfully but also causing many problems. The concepts it advocated, looking back now, were still too premature. Some professional services like email and search engines adopted cloud computing methods from the start.
At 2:15 PM, under the chairmanship of Liu Erfly, the standing director of Digital China, the high-end dialogue titled "Internet Storm" officially began. At the start of the dialogue, the host threw the topic to Google's withdrawal from mainland China, the core issue of the Internet storm. Regarding this, Li Yanhong stated, "Some people worry that if Baidu becomes a dominant player, will its technological advancement slow down? Will the user experience get worse? I believe this will not happen." Li Yanhong pointed out that in a rapidly changing market, new opportunities constantly arise, new competitors continue to join, and innovations keep emerging. Ma Huateng, answering the same question, expressed that in China, any internet enterprise or perhaps any enterprise should respect and understand the national conditions more. We see that there are indeed many bad messages that need regulation, but how to regulate or how to do it still offers many ways, and finding a balance point is essential.
Throughout the entire dialogue process, the two giants delivered witty remarks, sparking applause every few minutes on average. The venue was packed, with many people standing to listen to the entire conversation between the two leaders. Even Jack Ma couldn't help but participate multiple times in discussions from the audience. Under repeated reminders from the organizing committee, the high-end dialogue, originally scheduled for forty-five minutes, extended nearly half an hour before concluding satisfactorily.
If the market cannot grow rapidly, changes in market shares among competitors might not necessarily be beneficial for a company's long-term development. Currently, our two companies, including Alibaba, indeed have some competitive businesses, but this should not be the primary conflict in our development.
It is dangerous (laughs). I think it's a misunderstanding. The so-called self-walking, in my view, is a misinterpretation. Whether walking or not, it's ambiguous. From our perspective, last year, our traffic share reached around 75% to 76%, which is not as high as Tencent's IM share.
Liu Erfly: Media is present here, which might influence their speech. In a smaller setting, it might be more exciting. Let's move on to other issues. Now I notice that in terms of market capitalization, Baidu's market capitalization has exceeded $20 billion, Tencent's market capitalization has surpassed $40 billion, and if all of Alibaba's companies were listed, it could possibly reach $20 to $40 billion, or even $50 billion.
As foreign cultures are concerned, there is also the internationalization structure of our own teams. We have done a lot of exploration, experienced some failures, and achieved some successes. Various methods have been tried, including instant messaging communities. We promote interactive entertainment in the "BRIC" countries. Due to the lower labor costs in China's gaming industry, China's online games and interactive business capabilities are fully capable of export, making us very likely to become an export powerhouse in online culture and game creativity. This is already visible in several other game companies, especially those with independent R&D products. Tencent will make efforts in this area.
Li Yanhong: This is a typical media question. The media always likes to see us collide fiercely. From our perspective as business operators, over the ten years of Baidu's history, we have faced many so-called "competitors." I believe the key is that we have focused on doing what we should do, leading to good growth rather than trying to stifle competitors. We have seen many other fields where competitors were eliminated, yet the results were not favorable.
Liu Erfly: It seems that as companies grow larger, regulation becomes unavoidable. Both express understanding and hope for more effective regulation, potentially presenting new demands to Mayor Xu Qín. Both central and local governments may need to take actions.
(Laughter) Even if we knew, we couldn't say it here. Many businesses are hard to operate. Tencent didn't know anything about online games in the past; we only knew instant messaging. Back then, mentioning online games seemed incredibly difficult. Moving further into commerce and search was even harder. We invested three years in search research, and the technical threshold was extremely high—it was the highest among all the businesses we've ever done.
But practically, I think the audience here is quite sophisticated and very interested in technical issues. So I'd like to delve a little deeper. Cloud computing—let's not pretend it's entirely new; it's essentially old wine in a new bottle, nothing new. Initially, fifteen years ago, everyone talked about the client-server relationship. Then later, web-based services on the Internet were discussed, and now we talk about cloud computing. Fundamentally, it's the same thing: the main work is done on the server side, and the client-side requirements become simpler. Is this concept correct?
Ma Huateng: Indeed, that was a great metaphor. Many people ask what Tencent resembles, and we ourselves have been evolving continuously. We're fortunate and unfortunate to be in instant messaging, where there are no successful global examples to reference—they can't exist independently. Search and e-commerce are excellent; the world's largest and second-largest internet companies—Google and Amazon—are their models with great business plans, clear strategies, and excellent profit models.
Liu Erfly: Such collisions will provide some inspiration to all of us here, whether investors or media. Let me ask one final question. If there's still time after this, I'll give the audience a chance to ask questions. This question pertains to internationalization. Practically speaking, Alibaba was born as an international company since it deals with e-commerce. Baidu has started its internationalization, attempting to expand in Japan several years ago, but objectively, it hasn't yet become the mainstay of the company. Tencent is almost 100% focused on the domestic market. Can the two of you share some insights on this issue of internationalization?
In the past, the competition among several portals was quite intense. Imagine if one day Sina or Sohu were gone; the other would surely feel lost. Competitors aren't necessarily brought down by external forces; sometimes they leave on their own. Unlike Jack Ma, who genuinely drove eBay out, I tried to stir up some competition. I see that the evaluations we receive are still quite objective.
Li Yanhong: When I listened to President Huai speak, I noticed his content had some technical depth (laughs). I also observed that our audience was tilting their heads, attentively watching and listening, indicating that discussing some technology might interest everyone. I originally thought people came here just to hear meaningful things or jokes.
However, when planning our platform, we realized that beyond independent search services, search technology is extensively utilized on other platforms. In the e-commerce domain, search plays a significant role. Engineers improving its relevance and accuracy greatly benefit product listings and combinations. This is consistent.
You reach a certain point, and you need to consider the problems at that level. Overall, the early internet was relatively less regulated, whereas now, many people feel it's more regulated. One reason is that relevant regulatory departments or higher-level leadership initially paid less attention to the internet. Now, with more people online, they are also online and concerned about voices on the internet. Thus, stricter or more standardized regulations are natural occurrences.
Government departments have many leaders who previously didn't understand much, but in the past couple of years, they have increasingly focused on the internet. Due to varying levels of understanding, there might be some promising prospects, like the unclear responsibilities of the online gaming department recently, which led to conflicts (situation). We were also confused, and Robin Ding once felt helpless. This issue confuses us, so we have been suggesting to relevant government departments: Could the ministries related to the internet form a coordination bureau or department, making communication easier?
Currently, there are different understandings, so we are gradually promoting this idea. I believe Jack Ma also has deep feelings and meets many leaders. We also hope to jointly promote this. There are cases abroad where functional departments can be separated independently. This is my sharing.
Saying something shocking, isn't it? Including search, the internet is a service. Regardless of how much technical content this service has, the ultimate judgment still comes from the market and users. Search engine services are free; people can choose whichever they prefer. Even if you go to Hong Kong, you can still use it. More users indicate better performance, fewer users suggest otherwise. That's my answer. Thank you!
Ma Huateng: It's still neck and neck. We are following closely behind. In e-commerce, Taobao is undoubtedly ahead, with a larger market share. We are far behind but have our own characteristics. There are a few considerations: first, if we merge, we wouldn't know how much we could occupy, and it would be hard to negotiate; second, merging would be disadvantageous for sellers, leaving them with no bargaining room. They would have to pay whatever fee is demanded. From a competitive ecosystem perspective, having some competition is beneficial.
E-commerce Competition Benefits Consumers
Li Yanhong: E-commerce is an industry that developed earlier than instant messaging and search, at least in China. In the future, I believe there will still be many opportunities. Whether C2C or commercial platforms, there will be many independent stores and various B2C companies emerging. Currently, it is in a chaotic warlord situation in a broader sense of e-commerce. There is still much to be done in this area, as Ma Huateng mentioned earlier. A certain level of competition benefits users and consumers, and we should think in this direction.
But Tencent finds it difficult. Including our management team, we don't lean on either side. We don't have Jack Ma's eloquence or Robin Li's good looks. Neither side leans on us. Sometimes, fate leaves a gap. They encircle buildings that can be lived in, while we have barren land, knowing nothing, having to learn everything ourselves, like shoveling sand and building a building. In the past 11 years, after encircling the land, we had to learn everything. Now we are learning from them; we are the followers.
Ma Huateng: Truly, that metaphor was excellent. Many people ask what Tencent resembles, and we ourselves have been changing continuously. We are fortunate and unfortunate to be in instant messaging, where there are no successful global examples to reference—they can't exist independently. Search and e-commerce are excellent; the world's largest and second-largest internet companies—Google and Amazon—are their models with great business plans, clear strategies, and excellent profit models.
From a purely commercial competition perspective. Since today's topic is "Internet Storm," Google's exit from China certainly creates a new storm, rising abruptly. In the next few years, who do you think will be your biggest competitor—Microsoft, Alibaba, or Tencent? This also gives Pony Ma and Jack Ma a chance to participate in the concept. Who do you think will be your biggest competitor in the search aspect?
Liu Erfly: Listening to you, at least in the short term, there won't be direct conflicts or competitions between the two sides. However, you will use search-related technologies to better serve your customers.
China Internet Does Not Face 'State Advances, Private Retreats'
This innovation includes various fields, some of which we have already attempted, such as recently establishing an independent legitimate video company, which is a new attempt. Some are still being incubated internally, and some haven't been thought of yet, but we can't rule out doing them in the future.
When a new thing emerges, we seriously consider and pay attention to it, which might bring about some new issues. Our company is full of confidence and hope regarding cloud computing. We don't feel like we've found a new mine, but we possess a large amount of consumer data and Alipay transaction data. We believe these data are useful to us, but they might be even more useful to society. For example, from small business information to the overall Chinese economy and even the global economy, providing consumer data to manufacturers allows them to produce better products for consumers. If we can share this data with society, it will be very effective. If one day we don't do this, Baidu and Tencent will drive us out of the e-commerce door. So, this is a customer need; if we don't do it, we will die in the future.
Ma Huateng: Also, as outsiders, we wonder: Is Baidu putting more resources into areas other than search, such as e-commerce, video, and social networks, thereby competing with us again? So, I would like to hear him say more than just surface-level words.
Purely from a commercial competition format perspective. Since today's topic is "Internet Storm," Google's exit from China certainly creates a new storm, rising abruptly. In the next few years, who do you think will be your
