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Interview with Charles Chao

Aired August 3, 2011 - 05:30:00   ET



KRISTIE LU STOUT, CNN INTERNATIONAL ANCHOR (voice over): China is home to the world's biggest internet population with almost 500 million people going online every day. But you won't find web favorites like YouTube, Facebook, or Twitter here. All those sites are blocked in China. Instead, netizens use local web alternatives such as Youku and Tencent. Companies which are far more accepting of Beijing's strict content rules.

One of the largest and most popular is Each day, more than 10 million Chinese users tap into its email, news, and search functions. Sina is also the parent company of the hugely popular Twitter-like microblog, Sina Weibo. Now, Weibo has a bigger fan base than twitter and is used by local mega celebrities like basketball player Yao Ming and actress Yao Chen. Even Bill Gates, Tom Cruise, and British rock band, Radiohead have joined to interact with fans in China.

The man at the helm of Sina is 45-year-old Charles Chao. Educated in the U.S. and armed with knowledge of Western and Chinese sensibilities, Chao has made a success of Sina's microblog service when Western models in China have failed.

This week on TALK ASIA, we meet the journalist, turned accountant, and now Sina president and CEO. Find out what he really thinks of China's ever- present censors and how his time in the U.S. has given him an edge in China's hyper-competitive internet industry.


STOUT: Thank you very much for joining us here on TALK ASIA. Now, Charles, you were recently named in Time Magazine this year as one of the top 100 most influential people in the world. You're right up there with Oprah Winfrey. How did that make you feel?

CHARLES CHAO, PRESIDENT AND CHIEF EXECUTIVE OFFICER, SINA: Well, I was surprised when they named me as one of the, you know, 100 people - most influential people in the world. I mean, obviously, I was flattered. But, on the other hand, it's not so much speaks for myself, I think. It so much speaks for the influence of Sina Weibo and the influence it has brought to China ever since it was launched.

I think the real question, I mean, ever since our product was launched, it got a lot of attentions from domestic users as well as international media. I mean, we have 100 million users and we have a lot of famous people, influential people on our microblog. Where they talk, where they think, where they exchange intents of their ideas, their opinion - it become very influential. So, it provides a very free platform for people to express themselves and exchange ideas. And, in a way, it does a lot of good to China's - I mean, our - progress into a more open, more transparent society, I say.

STOUT: Now, Sina is a leading internet portal in China. You have news, finance, sports. But is Weibo the star attraction?

CHAO: Well, I mean, no question about that, I think. We used to be called the leading portal or "China's Yahoo", I think. These days, people saw us, they would call us "China's Twitter". But I think we are probably more than that. We are still the leading portal in China, but adding to that piece, we are adding the leading social media platform in China. Which is what you called Weibo, basically.

STOUT: Now you are the number one microblog in China. So, why do Chinese netizens turn to you?

CHAO: Well, I think, first of all, among the big players we started early. I mean, we launched the product about almost two years ago in August (INAUDIBLE). And, since then, I think we had a very good execution in attracting, you know, the celebrities and the grass-roots users. And have been able to grow very rapidly. But I think that we have been very focused and have been doing very well in terms of the user base. And I think there's a lot of competition, but are still working a comfortable lead right now.

STOUT: As a cultural phenomenon, what do Chinese do on Weibo? How do they express themselves?

CHAO: Now Weibo is the next stage allow people not only to express their opinion and their ideas, share their content, but also, because of these kind of social relationship being built up on the platform, they're able to distribute content themselves through these kind of social relationships. So, I think different, you know, group of people. I mean, from very young students to very old people like 80, 90-years-old. And from old age groups. But, of course, the core users are between like 20 to 40 age. And I think they're the ones probably are the ones really, I mean, opinion leaders in China. And so, I think the populace share a very diversified from their personal life, daily life, to the hot topics, events, and, of course, entertainment, sports, and everything.

STOUT: Now, there are close to 500 million internet users in China.

CHAO: Right.

STOUT: So, of them, how many use your service, Weibo?

CHAO: Well, I think, as of last reporting - they were published was at the end of April, it was almost a month and a half ago - our registered user number was about 140 million. And that number is keeping growing very fast. It took us about 20 months just to get that number. And so, it's quite impressive and I think there has never been an internet product that has been growing users so fast in China.

STOUT: So, in the world's largest internet market, one of five individuals online here in China use Weibo.

CHAO: You can say, at least register for Weibo.


CHAO: I think there's probably more, because we're not only one net provider service. So, there's a lot of competing service. I think the total, probably, is already over 200 million, I think.

STOUT: Weibo is basically Chinese for "microblog", right?

CHAO: Yes, yes.

STOUT: OK. Now, earlier you described yourself as the "Twitter of China", but a number.

CHAO: People call.

STOUT: OK, people call you the "Twitter of China", but a lot of analysts out there say that you're more than Twitter. In fact, that Twitter should learn something from you. Do you agree with that?

CHAO: Well, I'm not sure they have to learn a lot of things from us, but definitely there are a lot of differences between our Weibo product and the Twitter. I think when we launched our Weibo product, we already incorporate a lot of new features that Twitter did not have. For example, we allow people to comment on specific tweets. I mean, a person's post. And also allow people to comment when they re-tweet.

And another difference, probably, is that we allow people to post multimedia content from the very beginning like pictures and video. Somebody says that it's a product more like between Twitter and Facebook. I think there's some truth to it and we're adding more of these kind of features - Facebook features - in our next version.


STOUT: I respect that, and I can tell discussing this political topic is making you a little bit uncomfortable.




CHAO: So, this is actual plane. I mean, we paint that plane. Yes.

STOUT: An actual plane that says on it?

CHAO: Yes, yes, yes.

STOUT: With Tianjin Airlines.

CHAO: Yes. Sina Weibo. Yes.

STOUT: You're spending a lot of money on marketing right now. It's growing the audience.

CHAO: Yes. Yes. In your normal market, you don't have to spend too much marketing money for social media or social network, but in China, because there are so many people doing that, you want to recruit users early and quickly. So, we are spending a lot more this year than last year.


STOUT: Now, you studied journalism.

CHAO: Yes.

STOUT: In America at the University of Oklahoma. Now, as a journalist, I'm curious about this.

CHAO: Yes?

STOUT: What did you learn as a journalist that you are still applying to your work today as the CEO of Sina?

CHAO: Actually, my formal journal education was in China. I went to for the university in Shanghai. And my major was in journalism. And, actually, in the last year.

STOUT: And you were a broadcast journalist.

CHAO: Yes, yes. I was working for a Shanghai TV station - I mean, after I graduated from Fudan. And then I went to the University of Oklahoma for graduate study in journalism. So, I paid a lot of attention to the media industry. Not only in China, but also in the U.S. And, on the other hand, I think the journalism graduate degree was not about writing, not about production anymore. It was more about research and more about media management. I think that helps me a lot in terms of understanding media as a business versus media as a profession.

STOUT: You use Weibo, right?

CHAO: Of course.

STOUT: And how many - it's "fans" right? Not "followers" in Twitter- speak. It's "fans" in Sina Weibo-speak.

CHAO: Yes.

STOUT: How many fans do you have on Sina Weibo?

CHAO: I don't have that many. I only have - the last time I checked was 165 thousand.

STOUT: Only 165 thousand. And what do you share with them?

CHAO: No, actually I don't write anything because I'm kind of the owner of this platform. So I usually don't want to write anything controversial. Otherwise, I mean, you get little comments from your friends and people will give (INAUDIBLE) hard time. And so, I tend to be very neutral in terms of what I say, what I do.

STOUT: But it does surprise me - the number of people who do express opinion on Sina Weibo. In fact, there's a lot of anger and outrage in certain corners of Sina Weibo, especially against corruption or social injustice in China. All of that being conveyed on your platform. How does the Chinese government view that?

CHAO: If you understand my background as a journalist, I mean, I had - obviously, I had - a luxury, in a way, to observe, I mean, what has happened in China's media industry in China's society in the last 20 years. So, there's a lot of changes. I think China becomes much more open, much more transparent, I mean. And the people has - in a lot of way, on the web site, have a lot of freedom to express themselves.

And so, Weibo actually bring that freedom to the next level so not only they can express, they can also distribute their content and opinions with their Weibo account. I think there's a lot of freedom on that. And, I think, because our experience working in China, we understand the law and regulations and we're very experienced in terms of working in this kind of environment. Understand what's, I mean, is tolerable, what is probably out of line a little bit. So, I think, so far has been good.

STOUT: Everyone knows this. China is in the midst of its harshest crackdown in 20 years.

CHAO: Yes.

STOUT: There's the continued detention of the Ushabuah (ph). There's a young woman serving time in a labor camp for sending out a single satirical tweet. I'm not going to ask you why this is happening.

CHAO: Yes.

STOUT: That's not your job. How, though, as the CEO of Sina/Sina Weibo - how do you operate in this type of environment?

CHAO: Well, I think, like any society, I would say, there is a degree of censorship of our media. I mean, ours is just a value of the censorship based on a different.

STOUT: Even in the United States, where you studied.

CHAO: Yes. I agree. So you have self-censorship based on your value - what you believe, what you don't believe, I think. So, I think in China there is no exception here. I mean.

STOUT: I just want to step up and say, as an American journalist, I usually - and I do not participate in self-censorship. So, I disagree with that statement.

CHAO: OK, that's fine. I mean, but it's - in a way, it's censored by your own value system. What is correct, what is not correct. I mean, I think. And I would say that, in China probably, I mean, I think a stage of society development is very different. And I think it's a very diversified society and its very dynamic. And a lot of changes.

So, there will be different opinions, different kind of inner changes in this society. So, I think in order to keep growing, this - I mean, Chinese society or Chinese economy - there should be a stable, you know, kind of environment. And I think we honor that. And so, we, as a company working in China - I think whatever we do, we follow the local law and the regulations. There's no question about that.


STOUT (voice over): This is unusual to see on a Sunday afternoon in Beijing. Hundreds of police in one of the capital's busiest shopping district. An anonymous call on the internet directed people to gather here and in a dozen other cities across China to stage a Tunisia-style Jasmine Revolution.


STOUT: Take me back to the so-called Jasmine Revolution. Which was not a revolution, but it was a sensitive event in China. And I know that when the news broke on Sina Weibo, your search was disabled and people weren't able to forward photographs on Sina Weibo. Could you tell me what happened that day?

CHAO: Well, I don't recall. I mean, usually, I don't get into this kind of level of operation, myself. I mean - so I don't know exactly what happened, basically.

STOUT: So, were you following some sort of government directive or was this part of your internal policy of content management? Self-censorship?

CHAO: I would say usually we're managing our own content. Yes. Yes.

STOUT: OK. And what were the words or the comments or the video or the images that triggered your editorial teams to manage the content and to disable search on that day?

CHAO: I'm not sure we disabled search. I mean, actually this the first time I heard about that. And I think, in a way, it's sad. I mean, we have our own, you know, kind of judgment call in a lot of areas in terms of what we should do, we should not do. Yes?

STOUT: I respect that and I can tell, discussing this topic - this political topic, is making you a little bit uncomfortable.

CHAO: Yes. I think that - I would say that one thing that's very common about Western journalists, I mean, most of the time - that's probably the only topic they're interested. In a way, I think that's something that's - this shows your bias. That's what I said as kind of your own censorship. I mean, self-censorship in that your own interest of topic, whether there's censorship or not or whatever.

STOUT: No, this is not the only topic that I'm interested in.

CHAO: No, I understand. But that's without, you know, kind of, I would say, exception, right? This is the topic that people pay most attention to. I mean, but on the other hand, why are you paying a lot of attention to that? I mean, people tend to not pay attention to that. 99 percent of the internet industry product and development has been going very, very well in China. And, despite all the concerns, I think, of all the media has, China's internet industry has been growing very fast and, in fact, it becomes the - I was saying -- second-largest internet industry in the world, I think.

So, I think this internet with its growth - with more connection, more transparency, and more participation by users. And it helps to make China a much better and advanced country, I would say.


STOUT: Coming up, Charles Chao reveals how celebrity power is boosting business.




YAO CHEN, ACTRESS (text translation): I came to know about microblogging in September 2009 when my friend signed me up for an account. I had a blog account but blogging is more formal and the writing takes longer. Microblogging is more convenient. You can use your cell phone to record and express thoughts. Microblogging gives me the chance to write whenever and wherever I go. Sometimes I go back and read what I posted before and the thoughts I had. I think it is quite interesting. A microblog is like a camera and the messages are like photos.


STOUT: Yao Chen is the most popular, most followed celebrity on Sina Weibo.

CHAO: Yes.


CHAO: Well, I think she was popular because there was a very hot miniseries - TV miniseries - I don't know if you heard about called "Qian Fu" (ph) in China. And she got a lot of, you know, kind of popularity in China. And then she started to write microblog. And she works very hard and she writes a lot of microblogs. And she really tries very hard to write good, you know, microblogs. And so, she got a lot of attention. And so, all these factor together - she becomes the top one.

STOUT: Now, another point of distinction between Sina Weibo and Twitter is, and correct me if I'm wrong here, you sign contracts with celebrities. Is that right?

CHAO: We don't sign contracts, per se, because part of the reason we were able to recruit a lot of celebrities for Weibo is because we have been doing that many, many years. So, our blogging platform probably one of largest in the world right now. And we're getting more than 10 - almost 20 million bloggers. And among them, we actually recruit a lot of celebrities writing blogs for us. So, we have almost 20 thousand celebrity bloggers. I mean, on our blogging platform.

STOUT: Yao Chen has become your killer app. So, do you have to keep her, keep her happy?

CHAO: Well, I think there's a lot of mutual benefit. I mean, once you become so famous and so popular on a microblog, you become more famous and more popular in the society. And there's no question about that. I think she's getting to really, I think, pop into self-stars in China. And she caused a lot of commercials and these type of things. She's very famous. So, I think that microblog not only brings a lot of fun to these stars or to ordinary users, but also makes these stars more famous and they can interact with their fans more easily. And I think there's a lot of benefit and a lot of fun for these stars, too.

STOUT: Sina Weibo is the leading microblog in China. But there are other players out there. There are other rivals including Tencent, which has an active and growing weibo of its own. So, how do you plan to keep your lead?

CHAO: In terms of user engagement activities, we are still in a big lead right now. Because I think social media is not about - just about number of users you have - number of registered users you have. It's about the activity, the engagement and the content published on the social media platform. And, in that sense, we're in a very comfortable leading position in China.

First of all, our user base tend to be more high-end than other competitors, I mean, in China. So, these people tend to be opinion leaders, I mean, in China. So, whatever they say, whenever they talk, got a lot of attention. And secondly, because we earlier, so there's a lot of critical mass having formed on our platform, so there's a lot of user engagement. Actually, the time spent on microblogs is much higher than average time spent on Twitter. So, that's actually something that we think is one of the reasons that we are still taking a very good leading position here.

STOUT: So, you're looking at a number of different metrics.

CHAO: Yes.

STOUT: And you're also highlighting the quality or the earning power of the audience that you've garnered on Sina Weibo. Is Sina Weibo making money?

CHAO: No. Actually, I mean, if we want to make money, probably from advertising, it's very easy. But, at the current stage, I think we're still in a period they want to accumulate more users. We're much more focused on the product improvement. Launching new product, attract more users. And also launching different marketing campaigns to attract more users.

STOUT: But, you're already huge. Why not monetize the audience now?

CHAO: I think any kind of - if you look back - any internet platform, whether it's Google or Yahoo or Facebook right now - I mean, it takes years for them to build user platform first. And then they talk about monetization. And so, I think we have been there only for like 22 months - less than 22 months (ph) right now. So, I think our priority right now is more focused on product. And try to make our platform bigger.

STOUT: Now, you plan to launch Sina Weibo in English.

CHAO: Yes.

STOUT: Why? Do you want to go after Twitter? Do you want global domination? Why?

CHAO: No. I think part of it - it's the way (INAUDIBLE) think about international market too much. But, in terms of English version, I mean part of it. And we actually have a lot of people using Weibo from English community. I mean, people only understand English, they write in English, they communicate in English on Weibo. But they have to use the Chinese version. So this something that we got a lot demand from these users say, "Hey guys, just do an English version". I say, "Sure, we can do that".

And so we're going to launch an application first. iPhone/iPad first for English version. And then we'll see how the market accept that and we'll gradually probably introduce more market product for international market. But, at current stage, international market is not our priority.

STOUT: All right, Charles Chao, good luck to you and your team. Thank you very much for joining us here on TALK ASIA.

CHAO: My pleasure.