China’s mysterious Internet outage; speculation over a ‘kill switch’

 

Temporary blackouts leave China’s Internet users unable to access many Chinese Web sites as well as other unblocked foreign sites. Chinese Telecoms deny any network issues.

At approximately 11am local time yesterday, Internet users around China reported significant Internet blackouts. Not only were they unable to access some Chinese sites, but also many foreign Web sites that had not previously been blocked.

The issue was not isolated to China. Web users in Hong Kong and Japan also reported issues with accessing Chinese sites. A number of explanations immediately came to light, with the most viable cause being the 8.7 magnitude earthquake in Indonesia on Wednesday, that might have damaged undersea cables.

However, reports from China’s major telecommunication companies — China Telecom and Unicom — suggest that this was not the case. China Telecom confirmed that the earthquake had not interfered with the underwater cables in any way.

Both companies also shot down theories that the outage could have been caused by some sort of blip in the system, with Telecom insisting that there was no issue with their network. As all Chinese Internet traffic passes through the two networks’ infrastructure to get overseas, this had seemed like a likely culprit.

With the mystery of what happened  becoming murkier, many have been speculating as to what could have caused the blackout.

It was arguably far too quick to be a response to Anonymous’ war rally against China’s Great Firewall, which even they admitted will take time to crack.

Others have suggested that the temporary outage might have been a test run of an emergency ‘kill switch’, in case extreme measures need to be taken in the ongoing crackdown of the Chinese Internet.

According to Tech in Asia, VPNs that had previously allowed Internet users to get around the Great Firewall were down, but that smaller VPN providers seemed to be unscathed. This could suggest a deliberate targeting of such services, but at the moment, we can only speculate.

Admittedly, it does seem as though such a ‘kill switch’ would be extreme and far-fetched. However, the absence of clearer explanations lends the theory some credibility. China’s Ministy of Industry and Information Technology has been silent over the blackout, and so have much of the state-run media.

China Daily, People’s Daily and Xinhua, some of China’s major news publications are continuing to cover the growing ‘rumours’ issue, but not the blackout.

It could be relatively insignificant, but as Wall Street Journal’s Josh Chin points out, “the episode did illustrate just how jumpy China watchers and China Internet users have become in recent days.”

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Pork Donuts Being Introduced to Dunkin’ Donuts in China

 

Pork donuts may not be palatable to Americans or Europeans, but the parent company of Dunkin' Donuts and the Baskin-Robbins ice cream chains is catering to local tastes in China, where it aims to open another 100 stores in the next two to three years.

Dunkin' Brands Group Inc (DNKN.O) also announced a multi-year marketing agreement on Monday with National Basketball Association star LeBron James, who has a big following of Chinese fans. The company now has about 150 stores in China, the world's second-largest economy.

"Donuts are a very flexible product. You can do savory donuts, you can do donuts with shredded pork -- that's in China," Chief Executive Officer Nigel Travis told Reuters in an interview.

"We also have a range of other savory products that we have been testing and introducing country by country."

 

Getting the menu right in each market is critical. Pork donuts, for example, are not likely to sell well in Indonesia and Malaysia, where people are predominantly Muslim.

In the whole Asia-Pacific region, where Dunkin' Brands has over 5,400 outlets, it looks to open at least 250 net new stores for both its brands by 2015. Net new stores refer to the number of stores that open minus those that close.

Dunkin' Brands, which has a market value of $3.5 billion, competes in Asia with the likes of Krispy Kreme Doughnuts Inc (KKD.N), Starbucks Corp (SBUX.O), McDonald's Corp (MCD.N) and J.CO, an Indonesian donut and coffee chain.

Private equity firms Bain Capital, Carlyle Group and Thomas H. Lee Partners bought Dunkin' Brands from global spirits maker Pernod Ricard SA in 2006 and took the company public in 2011.

Of 15 analysts covering Dunkin' Brands stock, seven have "buy" or "strong buy" ratings, seven have "hold" and one has a "strong sell," according to Thomson Reuters data.

Dunkin' Brands shares closed at $29.02 on Friday and have risen around 16 percent so far this year.

FOCUS ON THE CONSUMER

Dunkin' Brands picked James as its brand ambassador in Asia partly due to the Miami Heat star's huge appeal in China, Travis said.

James will promote Dunkin' Donuts and Baskin-Robbins through advertising, online media and in-store marketing, as well as personal appearances at certain locations.

John Costello, chief global marketing and innovation officer, told Reuters that Dunkin' Brands is also developing milk tea and bagels with pork floss topping to cater to tastes in China.

"While we compete in very competitive markets, I think the key is to focus on the consumer, to understand their needs better than anybody and deliver on that," he said. "We think the best strategy is to execute on brand differentiation."

Travis said the target market tends to be young people with a reasonable level of income who are often "busy and on the run" and live in urban areas.

He also said global commodities prices, which saw heavy volatility last year, are stabilizing partly due to improving weather conditions that could lead to better harvests.

Dunkin' Brands is a huge consumer of commodities like coffee, wheat and dairy products.

"The spike in coffee that we saw last year seems to have subsided," Travis said. "Some other products like wheat have gone up but overall we think this is going to be a much better commodity year than last year."

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China Looks at Baidu 

Baidu said Chief Executive Robin Li was visited recently by two senior Chinese officials.

Search Firm Joins List of Internet Companies Under Scrutiny

 

BEIJING—Chinese Internet-search company Baidu Inc. said Chief Executive Robin Li met recently with two senior Chinese officials, the latest in a series of high-level official visits with Web companies as the government tries to tighten control of the sector.

Meanwhile, Qunar.com Information Technology Co., a travel-search company of which Baidu owns a majority stake, said it planned to list its shares in the U.S. next year.

Baidu on Thursday said Chinese propaganda chief Li Changchun and Liu Qi, secretary of the Beijing Municipal Party Committee, visited a Baidu exhibition in Beijing on Sept. 5 to learn more about the company's business and to give "important instructions." Both officials are members of the Communist Party's Politburo, which is made up of the party's top 25 leaders. Baidu's CEO was at the exhibition, the company said.

The company said the propaganda chief encouraged Baidu to "continue growing and become stronger, winning honor for Chinese companies." Baidu has expressed interest in international expansion and offers services in Japanese, Thai and Arabic, in addition to Chinese.

A Baidu spokesman declined to provide further details on the visit.

Central-government officials couldn't be reached for comment.

The visits to Baidu and other companies this year underscore the government's growing anxiety over the explosive growth and spreading influence of the nation's Internet sector. Chinese Web companies are required to follow orders from authorities, including requirements to censor their content. Internet companies must walk a fine line, offering services that draw users without angering the central government.

In some cases, the executives' efforts veer into unusual displays of patriotism. Robin Li and other Chinese Internet executives traveled in June to the Shanghai site of the first meeting of the Chinese Communist Party, where they sang revolutionary songs and made speeches praising China's blend of socialism and free-market elements to help celebrate the 90th anniversary of the party's founding.

Last month, Mr. Liu visited online video company Youku.comSina Corp., which operates one of China's biggest Twitter-like microblogging services. According to state media, he told executives that Internet companies should "step up the application and management of new technology, and absolutely put an end" to "fake and misleading information," a term often to mean information not approved by Chinese authorities. Inc. and Web portal

Tencent Holdings Ltd.—which operates China's most popular instant-messaging service, QQ, as well as a microblogging service and a games portal—said in July that China security chief and Politburo member Zhou Yongkang visited its offices. The company said also that Politburo member Liu Yandong and Tianjin Party Secretary Zhang Gaoli appeared at Tencent's Guangdong and Tianjin offices, respectively. Ms. Liu and Mr. Zhang are potential candidates for promotion to the Politburo Standing Committee, China's top decision-making body, in next year's once-a-decade leadership change.

During his visit, Mr. Zhou said "online virtual society's influence on real society is becoming bigger and bigger" and that "the government must strengthen oversight of it in accordance with the law." The visit included an inspection of an office set up by local Web police within the company, according to an article by state-run Xinhua news agency posted on Tencent's website.

Tencent's site quoted Mr. Zhou as saying that Internet companies "must strengthen industry self-discipline" and play a more proactive role in "upholding harmoniousness and stability."

Tencent spokeswoman Catherine Chan said the company often receives central-government officials at its offices. As for the company's cooperation with Shenzhen authorities, she said, "We have a responsibility to protect the security of virtual items on our platforms and will stay in touch with relevant departments to help resolve such user complaints."

Qunar's stock-market listing would come despite investor skittishness in light of market volatility and accounting worries involving some U.S.-listed Chinese companies. Qunar's ties with Baidu, long listed in the U.S., likely would bolster the offering, however.

A Qunar spokeswoman said details aren't yet available on Qunar's IPO plans. Baidu in June said it would make a $306 million investment in Qunar. It didn't specify the size of its stake but said the move made Baidu the company's majority shareholder. Baidu said Qunar would continue to operate as an independent company while cooperating with Baidu in travel-search services.

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China seeks to tether the microblog tiger

 

(Reuters) - Mao Zedong famously said a single spark could start a revolutionary prairie fire. That fear is now driving his Communist Party successors to grapple with how to tame China's expanding legions of microbloggers.

A stream of warnings in state media has exposed how nervous Beijing is about the booming microblogs and their potential to tear at the seams of party censorship and controls.

Chinese microblogs, especially Sina Corp's dominant service, carry plenty of celebrity gossip and harmless fare. But they also offer raucous forums for lambasting officials and reporting unrest or official abuses. It is their potential to stoke popular discontent, even protest, that worries Beijing.

"The government feels it's on the back foot about this," said Li Yonggang, a professor at Nanjing University who studies Internet policy, adding researchers and think-tanks had been mobilized to study how to strengthen microblog management.

"There's a feeling that additional regulation, formal or informal, is on the way."

The number of Chinese users registered on domestic microblog sites reached 195 million by the end of June, an increase of 209 percent on the number at the end of 2010, according to the China Internet Network Information Center.

Most use Sina's "Weibo" service, launched in August 2009, or rival Tencent Holding's "QQ" service.

Officials, however, have not been singing the same tune about how far the government should go to rein in microblogs. Dozens of rival agencies claim a stake in regulating China's Internet and "there are certainly different stances," said Li.

Some officials have decried "Weibo" (pronounced "way-baw") as a tool for reckless rumors and subversion; others have defended it as a challenging, but much-needed, window into the public soul.

Despite the jitters, Beijing is extremely unlikely to close microblogs, a step that experts said could unleash its own prairie fire of public anger and distrust that would give even China's thick-skinned leaders pause.

"There's this Chinese proverb, 'qi hu, nan xia' (once riding a tiger, it's hard to dismount), and that's the problem the government has -- that it got onto this thing, allowed it to start, and now to shut it down, that would be a nuclear option," said Bill Bishop, a Beijing-based investor and adviser on China's Internet sector who runs the DigiCha.com blog.

"It would be surprising if they kill it or completely neuter it, but I think a likely outcome is a set of incremental tweaks and controls," Bishop said of Beijing's approach.

"You've got to remember that this is basically a real-time stream of what Chinese people are thinking, and that's not just incredibly valuable to people who care about public opinion, but also for those monitoring security problems," he said.

Stricter controls could include time delays so comments are more finely filtered before spreading online, and demanding at least some classes of users register with their real names, which many do not do now, said several industry analysts.

Beijing also could impose new license conditions on microblog operators, slimming down the number of players to a more manageable and compliant number, some analysts also said.

"Microblog regulation will be a game of cat and mouse," said Wang Junxiu, a Beijing-based Internet investor and commentator who follows debates on China's microblogs.

"There's clearly a trend toward stricter controls, but the costs of outright shutting them down would be too high."

A MEGAPHONE FOR EVERY CITIZEN

Ever since the Internet arrived in China, the Communist Party has been figuring out ways to monitor and restrict online information and images, and its controls are among the most sophisticated and pervasive in the world. China also blocks popular foreign sites such as Facebook, YouTube and Twitter.

But the explosion of microblog use has pushed China's contest over information into unfamiliar terrain, where censors have lagged like pot-bellied and puffing hunters left flatfooted behind hordes of fleeing rabbits.

Microblogs allow users to issue bursts of opinion -- a maximum of 140 Chinese characters -- that can cascade through chains of followers who instantly receive those messages, challenging censors who have a hard time monitoring the tens of millions of messages sent every day. Inventive users adopt alternative words to get around censorship filters.

"We have no other venue for speaking out, because the public's voice can't appear on television or news or newspapers, and so microblogs have become the most effective way for instantly expressing the heartfelt feelings of the public," said Liu Zicheng, a 20-year-old student trawling through his microblog on a web-connected cell phone in a Beijing cafe.

"If my microblog was shut down, it would be like I'd lost a habitual part of life, like putting on socks every day before you step out the door," said Liu.

Beijing's worries go beyond the embarrassing exposes of officials' misdeeds and mistresses now common on microblogs. It worries that the torrents of messages could overwhelm censorship and trigger unrest -- a fear reinforced by the role of social media in Arab anti-government uprisings and riots in London.

"Weibo can be like a megaphone in the hands of every user," said Li, the Nanjing University professor.

"If you shout fast enough and loud enough you can attract widespread attention and there can be a snowball effect so everyone joins in and feels bolder about speaking out."

China felt that force in July when microblogs became a forum for lashing the government over a deadly high-speed rail crash. Images of a peaceful protest against a north China chemical plant in August also spread on microblogs.

Earlier this year, searches and message forwarding on Sina's "Weibo" site were briefly suspended during government alarm over online calls for protests inspired by the Arab uprisings.

"At present, microblogging is still tolerable to the government, but there is a fear of a potential crisis such as the London riots," said Wang Wen, a newspaper commentator in Beijing who has advocated tighter management of microblogs.

"If there's a collective incident related to microblogs, the government will step up management of it."

NO SHUT DOWN

But China's leaders would consider shutting microblogs only in extreme circumstances, such as nationwide protests or panic, said Yu Guoming, a professor of journalism at Renmin University in Beijing and co-author of a recent study of microblogging.

Instead, Beijing is exploring ways to tame the microblog so it remains a useful forum for monitoring opinion, but stays within the ultimate grip of authorities. The government is "still at the stage of collecting ideas" about how to better manage microblogs, said Yu.

Ways of putting microblogs on a tighter leash that have been floated include a time-delay so operators can monitor messages more thoroughly before they go out, and demanding that users who forward messages use their real names, which could deter many of them from challenging censorship.

Even relatively limited steps could draw an outcry from microblog users, said Mark Natkin, managing director of Marbridge Consulting, a Beijing-based company that advises investors about China's Internet and telecommunications sectors.

Tighter controls could also come tied to new license demands, which could be used to reduce the number of Chinese microblog operators and keep only those seen as reliable enforcers of government demands. For now, Chinese microblog sites are formally operating on a "trial" basis.

Sina has a reputation as a trusted partner of regulators, and might even welcome tougher licensing conditions that deter upstarts, said Li, the professor.

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MAGLEV Train - 430 KPH Train Pass

Shanghai - China - High speed train passing on coming train , the other train is over 300 feet (100m) long yet passes in the blink of an eye.

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China’s Twitter Weibo Gains on Original

 

There are more than a billion Chinese people and a lot of them are not using Twitter, because it’s banned.  These are the two major advantages of Weibo (which translates in English as “micro-blogging”) that has allowed it to cross the 200 million registered user milestone in two years, a feat that took Twitter about five years.

Just to show off it’s emerging dominance in Chinese cyberspace, which should include not only the People’s Republic of China but all countries where people read Chinese characters or speak Mandarin or Cantonese, Weibo took out a seven story ad on Times Square.  Clearly, the message to the markets of the world is that if you want to sell anything in Chinese cyberspace, then you have to deal with Weibo.

The thing is, with Chinese being the language with the largest number of speakers and readers, the English world’s social networking rivalry may be overshadowed by Chinese social networking.

Weibo’s growth has been charted for some time now.  Forbes says “Weibo had more than 5 million users in early March 2010, according to global marketing and media relations firm Ogilvy.  By the end of the first quarter 2011, the Weibo population swelled to 140 million users, the company said in an earnings statement dated May 11.”

SINA owns Weibo and an article on Yahoo Finance cites that according to financial group “Mirae Asset, currently 14% of Chinese Internet users are microblog users, of which 54% are using weibo, with 21% going to Tencent. Accounting for page views, Sina Weibo has an 87% market share compared to a mere 8% for Tencent.”

SINA is also looking at going into more global territory as it eyes launching an English version of Weibo.

But more than the sheer number of users, Weibo is trumping Twitter in terms of its revenue model.

Twitter’s main revenue model is basically sponsored tweets, promoting trends and data analysis for enterprise accounts.  On the other hand, Sina’s business model is more varied and is based on interactive, precision ads; instant search; paid content; e-commerce; social games like Farmville and a wireless value-added service.

Years of self-censoring experience have earned Weibo acceptance from the Chinese government, giving it a  a very strong position in China while locking out Twitter.  The thing is, by the time Twitter does get into China, the chances are that the world would have moved on to other forms of rapid-fire social networking, or committed to other brands.

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China airs documentary proving military university is hacking U.S. targets 

 

For a long time now there has been suspicion that China is a hotbed of hacking activity either endorsed or ignored by the government and targeting foreign individuals, companies, and even governments.

The Chinese government has always denied this, but high-profile pull outs such as that threatened by Google last year, demonstrate there is definitely something going on, and now we have proof hacking tools are being developed and attacks carried out at official institutions in the country.

In July, a documentary full of military propaganda was aired on TV across China. The footage happened to contain proof that a Chinese military university is using hacking software it has developed along with compromised U.S. IP addresses to target dissident groups.

The damning footage only lasts for 6 seconds, but that’s all we need to see the evidence. The screen you see above taken from the documentary shows a piece of software developed at the Electrical Engineering University of China’s People’s Liberation Army. The compromised IP being used is 138.26.72.17, which belongs to the University of Alabama in Birmingham.

With the IP selected the attack target is selected from a drop-down list. In this case it is Minghui.org which belongs to the Falun Gong spiritual discipline. Due to its size and independence the communist Chinese government viewed Falun Gong as a threat and banned it in the late 90s. Now it seems, they are remotely attempting to wipe it out completely if they can.

With the IP ready to use, and the target selected, the bottom left button is pressed in the video and the attack starts.

By including the footage by mistake or otherwise, it forms clear proof that at least one university in China is actively developing hacking tool and targeting overseas locations. The fact that this university is directly funded by the People’s Liberation Army either means they aren’t keeping an eye on what students are doing, or this is encouraged. The fact the footage was recorded and put in an official documentary suggests the latter.

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Baidu Launches Social Music Experience With Major Label Support

 

 

When China search company Baidu began pointing users to copyright-infringing websites via their Baidu MP3 service they came under fire by major labels around the world and now the company is looking to rectify that PR nightmare by launching a new social music service which has received support from major record labels.

Known as Baidu Ting, the program has partnered with Warner Music, Sony Music Entertainment and Universal Music Group. The new system offers music downloads and streaming capabilities, much like options we’ve seen from services such as Spotify, Pandora and Grooveshark.

Among the sites best features are music browsing and streaming, the ability to download free songs and social networking aspects that includes the ability to create and share personalized playlists and check out popularity charts based on what other users are listening to.

The program does offer a language conversion option for non-Chinese users, just be warned that the program is quite awful and I highly doubt that the Google competitor will allow Google Translate to be used in order to help make their pages more readable outside of their search engines region.

Users can expect to eventually see more than 500,000 songs from the major participating labels, all of which will be free to download in one form or another, however those songs are expected to be uploaded to the service in batches, which means the service is slightly sparse upon launching.

Baidu officials have also promised that the system will continue to develop and add new and improved features as users voice their opinions.

The program is also a smart strategic move for Baidu as the term “MP3″ now accounts for less than 1% of the search engines traffic, a sharp decrease from the days when MP3 downloads were a popular internet feature, an option that has largely been dwarfed by music sharing services which have replaced MP3 downloads with streaming capabilities.  In comparison the question and answer service Baidu Zidao accounts for 8% of all site search traffic.

With China mobile earning $3.1 billion off music rights downloads  in 2010 it’s simply an area that Baidu can’t afford to ignore.

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