EMOBILE: the mobile broadband revolutionist - Huawei

Tao of Business
Inspiration from
Internet business models
Internet reinforces its leading position with a growing penetration rate and fast-increasing
user base. Can telecom operators transplant the Internet-related technologies and successful business
models, so as to find a new profit stream?
By Chen Fudong
Land of opportunity
or a black hole?
As is known to all, the predecessor
of the global Internet was the
Advanced Research Projects
Agency Network (ARPANET)
developed by the United States
Department of Defense in
1969. In1990, the hyper text
protocols of Tim Berners-Lee and Robert Cailliau allowed
the technology and application to swiftly morph into
the world wide web of today. In less than 40 years, the
Internet has grown from the original four nodes to around
400 million nodes, with over a billion users. This can be
attributed to the web breaking out of the circle of science
and research and being easily accessible to ordinary users
and geeks alike.
Along with constant expansion, network performance
has also consistently improved through software hardening
(which uses hardware devices to replace software modules
for packet forwarding). A number of new stars have been
born.
We can see the shining stars as well as the dark side
in the course of Internet innovation. In reality, there
are far more losers than winners. Microsoft is a vivid
example. They have invested heavily in Internet services
including: Internet Explorer, MSN, Hotmail, MSNM,
Live, Space, and Facebook among others. Their assets
span the industrial chain upstream and downstream,
from television (MSNBC) to consumer electronics (Xbox
360). Nevertheless, the return on the Internet investment
is nothing to crow about. It is obvious that, even for
Microsoft it is difficult to succeed in the Internet.
Transitions of Internet business
models
The earliest mass commercialization was the ISP era
represented by AOL, and the business model was to bill
dialup subscribers by usage or by the hour. Later, the
Internet entered the portal era as represented by Yahoo!,
and it gained revenues from display ads based on the
number of clicks and views by users. The value of an ad
depended on the popularity or amount of traffic on the
site.
Then Google exploded onto the scene and led the
search engine era and the successful model became
targeted advertising. The value of this type of advertising
lies in accurately steering the user to commercial sites he/
she might have interest in making purchase forms.
The current era is represented by social networking
sites such as Facebook and the business model shifts to
recommended advertising. The value lies in word of mouth
marketing, also known as viral marketing.
The commercialization process progresses with how well
the Internet understands people. In the era of the portals
around 2000, subscribers were just contributors of traffic.
A popular saying was, “On the Internet, nobody knows
you’re a dog”. The era of search, however, was focused on
FEB 2009 / Win-Win
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