Weibo: TCL, ZTE on road trips; Ominous kudo for Sina Weibo
Two of China's top tech executives were on the road last week, with ZTE (0763.HK; Shenzhen: 000063) and TCL (Shenzhen: 000100) officials making overseas visits that could hint at their future directions. Meantime, congratulations were pouring in from around the tech world for Sina (Nasdaq: SINA) on its IPO for (Nasdaq: WB), which struggled to find an audience among big investors but then managed to make a respectable trading debut. Such kudos aren't unexpected for the popular microblogging platform, often called the Twitter of China. But one particular message from controversial tech titan and Qihoo 360 (NYSE: QIHU) CEO Zhou Hongyi looked just slightly ominous to me, even though the message itself was purely congratulatory.
The sudden series of road trips by top Chinese executives is probably at least partly due to the arrival of spring, when the warmer weather makes travel more pleasant and everyone is finally returning to work after the Christmas and Chinese New Year holidays. ZTE's smartphone chief Zeng Xuezhong made the unusual decision to launch one of his company's newest smartphones during a South Korea trip that included a visit to Samsung (Seoul: 005930), the world's smartphone leader.
I call Zeng's decision unusual because ZTE and Samsung are technically rivals, even though ZTE is more focused on the low- to middle range of the smartphone market while Samsung is squarely focused on the upper end. Zeng didn't say much in his microblog post beyond to disclose his visit and also compliment Samsung in general.
What's most interesting is the fact that he made such a visit at all, which perhaps could hint of some kind of potential future partnership between the two companies. Such a tie-up would be a bit unusual but not completely unthinkable, since the two companies' products are quite complementary. A notable precedent would be the 2001 combination that saw Japanese electronics maker Sony (Tokyo: 6753) and Swedish telecoms equipment giant Ericsson (Stockholm: ERICb) combine their cellphone assets into a joint venture that become known as Sony Ericsson.
While Zeng was in Korea, TCL's Chairman Li Dongsheng was on his own road trip to Silicon Valley, where he paid visits on Google (Nasdaq: GOOG) and also on legendary venture capital firm Sequoia Capital. Similar to the case with ZTE, what's most interesting is the fact of Li's visits rather than the content of his posts.
Li was once considered one of China's tech visionaries back in the 1990s when he built up TCL to become China's biggest TV maker. But lately he has been looking for new directions for his fading empire, which have included his company's recent launch of a video gaming console and an Internet TV tie-up with online search leader Baidu (Nasdaq: BIDU). These two latest meetings could hint at potential similar new partnerships with Google or one of the many tech firms backed by Sequoia, as TCL tries to claw its way back onto the China technology map.
Lastly I thought I'd just briefly mention the many congratulations that came in for Sina Weibo's IPO, which failed to generate the kind of hype and raise as much money as the company had originally hoped. The kudos from tech executives like Tudou founder Wang Wei and Sungy Mobile (Nasdaq: GOMO) President Zhang Xiangdong are probably testament to Weibo's popularity, as well as the likability of Sina's chief executive Charles Chao who led the IPO campaign.
But another congratulatory message from Qihoo's Zhou Hongyi did seem just a tad ominous. The message itself was rather bland, with Zhou simply offering his congratulations to Weibo. Weibo is probably one of the few major Internet companies that Zhou feels comfortable congratulating, because it's one of the only ones that hasn't sued Qihoo in the last few years for overly aggressive business practices.
Chinese web watchers will recall that Zhou Hongyi offered similar congratulations to search engine Sogou last year when his company lost in the bidding for the company, which ultimately ended up signing a strategic alliance with Internet leader Tencent (0700.HK). But that friendly atmosphere quickly disappeared just a short time later when Sogou sued Qihoo for unfair competition, and Qihoo countered with its own lawsuit. I doubt we'll see that kind of acrimony appear so soon this time, though Zhou certainly has a way of making enemies out of most of China's top Internet companies.
To read more commentaries from Doug Young, visit youngchinabiz.com