MediaFile

The end of the story…

……is the cash cow for Chinese company Shanda Literature Ltd, a
subsidiary of Shanda Interactive Entertainment.

The company’s business model is simple: read the first half
of a book online for free, and if you want to know the rest
(which usually is the case if you have read that far) you need
to pay for it. Revenues are split with the stories’ authors.

In China, this proves to be successful. According to Shanda
Literature CEO Hou Xiaoqing, the company now has cash reserves
of $1.8 billion, with 800,000 authors creating up to 80,000 new
pages of content per day, he said at the Frankfurt Book Fair.

On web portals such as www.qidian.com and www.hongxiu.com,
customers can chose from a huge variety of stories, and the best
even make it into print.

Xiaoqing said the company has also teamed up with China
Mobile
to distribute literature via mobile phones, a
business model that he said was “very promising”.

Rupert Murdoch: You call it free news, I call you ‘kleptomaniac’

Lest anyone doubt the thrust of Rupert Murdoch’s speech on Thursday (or was it Friday? I’m losing track of time zones) at the World Media Summit in Beijing, it was all about paying for news — as in: You’re going to pay for news, and if you think it shouldn’t cost you anything, you’re a “flat-earther” and a “kleptomaniac.”

For those of you accustomed to the News Corp CEO’s occasional verbal ramblings and hints of ghosts of suggestions, this was a departure. He has gone on the record in great detail about his thoughts regarding paid news, but this is the first time that I recall him using fightin’ words like “flat-earther.”

Murdoch also “urged the Chinese government to take full advantage of the country’s creative potential by opening the door to media competition and ensuring that intellectual property is protected,” according to the speech and the press release, but let’s be clear — the message that resonated was: “You’re going to pay for news as long as we need to pay people to report it.”

from Commentaries:

Bon chance getting this deal done, Alcatel-Lucent

It beggars belief that humbled telecom equipment supplier Alcatel-Lucent could be scooped up by a Chinese rival with nothing better to do. Huawei or ZTE seem credible candidates. The question is, why would they ever bother?

PLA soldiers perform during a rehearsal of a musical drama in Beijing

That didn't stop shares of Alcatel-Lucent from rocketing up as much as 21 percent on Wednesday on rumors of an unnamed suitor. Momentum was helped by a rating upgrade on the depressed stock by French broker Natixis. The shares later settled back somewhat to trade at 2.75 euros, up 12 percent on the day in Paris.

Why would a Franco-American company that is widely considered a failed example of industry consolidation be doing the same thing over again, but with the added complexity of China in the mix?

from The Great Debate:

Forget Microsoft, Yahoo’s value is overseas

-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

eric_auchard_columnist_shot_2009_june_300_px2The fate of Yahoo Inc has become intertwined in the public's imagination with the success or failure of its dealings with Microsoft Corp in recent years.

That's despite the fact that as much as 70 percent of the value investors put on Yahoo's depressed shares are tied up in its international assets or cash holdings -- factors that have nothing to do with Microsoft.

Yahoo's operations trade for just $5 to $6 per share out of its current $15 share price, once you exclude its Asian investments and the value of its cash. Its hidden assets in Japan and Chinese affiliates -- Yahoo Japan Corp and China's Alibaba Group -- alone are worth around $6 to $7 per share.

Demand for iPhone outstrips supply

Setting aside some relatively impressive Mac sales, Apple’s iPhone was the true star of the company’s earnings drama on Tuesday–though the the device might be a little tough for some folks to to get their hands on in the near term.******Apple said it can’t meet current demand for the iPhone 3GS, which launched last month. The 3GS is available in 18 countries and is being rolled out this summer to another 80-plus countries.******Overall, the company sold 5.2 million iPhones in the June quarter, ahead of many analysts estimates. That total includes sales of the reduced-price $99 iPhone 3G.******Chief Operating Officer Tim Cook said “the iPhone 3GS is constrained in virtually every country we’re shipping it in. So the demand has been very robust.”******He later added: “I don’t want to predict today when supply and demand will balance. I know that it will not balance in the short-term. And I don’t want to give a prediction because as you can guess, it’s very difficult to gauge the demand without having the supply there to find out what it is… In terms of affecting the country roll out, I believe the vast majority of the countries that we are selling the 3G in will be selling a 3GS by the end of the fiscal quarter. So it may move the date by a few weeks here or there.”******Cook also delivered some interesting factoids on iPhone adoption by large corporations. He said close to 20 percent of the Fortune 100 have bought at least 10,000 units or more.******But Cook stuck to the company line on AT&T, the exclusive iPhone carrier in the U.S. (“I think it’s an excellent relationship and we’re very happy with it”), and provided no new details on when the iPhone might launch in China.

Facebook reports access issues in China

As the Chinese government worked to regain control of the streets on Wednesday following ethnic clashes in the northwestern region of Xinjiang, Facebook reported some problems with its service, even as Beijing moved to suppress anger and dissent that is simmering online.

“We’ve heard reports of access issues and the service does appear to be running slowly. We’re looking into the matter,” a Facebook spokesman said via email, without elaborating.

On Tuesday, access to Facebook also seemed to be disrupted in some places, although the company maintained it was not seeing any changes in traffic. Still, users in Guangzhou, Shanghai, Beijing and Chongqing said they could not reach the site. In addition, access to Twitter was apparently blocked and search restrictions for Xinjiang topics were in place on Twitter’s Chinese rival, Fanfou.com.

Sniper-blogger grills Taiwan reporters

“Even Reuters’ Ralph Jennings — of whom I’ve been extremely critical for getting the story very wrong when it comes to Taiwan — tells us that ‘half a million’ attended the protest,” a blogger wrote in October after seeing the Reuters’s write-up of an opposition-led demonstration in Taipei against President Ma Ying-jeou.

China claims sovereignty over self-ruled Taiwan. Ma, Taiwan’s president, likes China. The opposition and the blogger don’t like either.

I poured a beer to celebrate because I had it right, up from a score of “lies” that the same blogger gave me on a story earlier that year.

from Summit Notebook:

Apple’s iPhone takes slow boat to China

In China, Apple's iPhone commands a strange presence. Perenially "coming out", already widely available on the black market, viewed with trepidation by local telecom players but with undisguised lust by affluent consumers.

Sanford C. Bernstein Toni Sacconaghi thinks the wildly popular device will arrive in the Middle Kingdom before the end of the year, after a long haul of negotiations with state-run telecom carriers keen to control the content to be sold over the gadget.

Some sticking points thus far: Sacconaghi says Chinese typically spend $10-$15 per month on data services -- everything from stock quotes to weather forecasts -- wheareas your typical iPhone user in the developed world now spends $70. That limits the Chinese carriers' ability to subsidize the iPhone. But the analyst thinks that in one to two months Apple may unveil a cheaper version of the device that can lower the cost of the phone to lower-paying Chinese customers.

Blue Sky for Baidu?

The dreams of Internet moonshot stocks have not disappeared amid the global economic slowdown.

Take Baidu, the No.1 Internet firm in China, which was bequeathed a lofty $432-a-share valuation by Deutsche Bank on Tuesday under a so-called “blue-sky scenario.”

That would be quite a bit above Baidu’s $186.50 opening price on Tuesday, but Deutsche Bank analyst Alan Hellawell points out in a note initiating coverage on Baidu that the stock has traded upwards of $380 in the past 52 weeks and that Baidu’s market cap still pales compared to Google’s.

Note to Yahoo’s Bartz: Ma company, Ma way

 Yahoo CEO Carol Bartz has earned a reputation as a strong-willed, no-nonsense executive.

But she may have her met match in Jack Ma, the founder and CEO of Alibaba, which owns and operates Yahoo China.

 “Personally I have a management philosophy: when you see someone in the kitchen, don’t give them directions. Let them do it,” Ma told Reuters during a visit to New York on Thursday. “I do it my own way. I don’t listen to Yahoo.”