2012

Great Wall Club 长城会

[G-TRIP]

EXECUTIVE STUDY TRIP TO SILICON VALLEY - THE SOURCE OF MOBILE INNOVATION 16 - 22 OCTOBER

Content

Delegates 4

Itinerary for Company visit 6

Analysis of the U.S. market 7

Official Events | China SF 15

Company visits | TapJoy 20

Company visits| Zynga 27

Company visit | Founders Den 30

Company visit | Evernote 32

Company visit | Fenwick 36

Company visit | Admob 38

Company visit | Linkedin 43

G-Trip 2012

Executive study trips (G-Trip) are arranged to the most innovative and leading geographical markets in the mobile Internet field. In this case, Silicon Valley was the destination.

In return, we aim to help increase cooperation and knowledge sharing among high-level executives from the leading mobile Internet companies around the World.

Delegates

Delegates

Itinerary for Company visit

10/16

Tuesday Activities

China SF – Organization that promotes civic action through the use of technology in San Francisco.

Cruise Dinner Event

10/17

Wednesday

Morning Visit

Tapjoy |Leading global mobile advertising platform

Zynga |Famous social game-maker on mobile and social networks

Afternoon Visit

Founders Den| Private clubhouse for entrepreneurs

Evernote| Popular note-taking software provider Dinner Event - With alumni of UC Berkeley,

Stanford, and Tsinghua

10/18 Thursday

Morning Visit

Innospring | Silicon Valley’s first US-China technology start-up incubator.

Google Admob |One of the world’s largest mobile advertising platforms

Afternoon Visit LinkedIn| The most popular social network for professionals

Analysis of the U.S. market

U.S. Mobile Market Overview

The US Market is developed

The two large regions in the future mobile market Emerging markets - China and India represents the other Asian countries;

consumers will be in contact with the mobile Internet. Developed markets - the U.S., Japan and other countries on behalf of the user

consumption value of emerging market 5-20 times

Software related firms will be easier to access into developed markets Hardware access usually receives security, user awareness, price, and cultural

constraints. Huawei and ZTE took up some portion of the market share in the mid and low range market, but they still lack the ability to influence or power in the market.

Applications (APPs), games, and other software products can undergo through localization and a chance to enter the market fresh. With adequate consideration and it will be easier to expand globally.

U.S. mobile market trends

Mobile Terminal

Q2, two-thirds of the U.S. mobile phone buyers bought a smart phone, and most of them chose Android.

According to Nielsen said Android in the U.S. smartphone market took up 51.8 percent, while Apple's iPhone came in second with 34.3%, BlackBerry is in the third place with 8.1% market share.

Game

U.S. mobile game users have increased to 101 million, and have been distributed beyond the traditional gamers, becoming the largest gaming group in the U.S. gaming market.

Occupy about 8.5% of revenue structure, the Mobile game advertising revenue in 2011 reached $ 080 million, is expected to reach $ 190 million in advertising revenue in 2014, advertising revenue share increase to about 14%.

Mobile Advertizing

Till Quarter 2 in 2012, Apple iOS occupies 59% of the mobile advertising market, substantial lead compared to Android. 75% of the ad was rendered via Wi-Fi. iPod Touch took up the largest ad margin, up to 14.9%

Educational related App was the most profitable，on an average of 0.92USD

revenue per thousand exposures (eCPM).

NFC and e-payment From the VC's point of view, NFC and e-payment of e-commerce related ideas maybe

more profitable. This is because, as the market the advances, more users and companies got involved. Been quite some time since the market was bragging about concepts and the number of users, but as the industry and investment environment advances, the market has turned to apps that are profitable or those with new added functions.

Original hot topics such as LBS, Pinterest, and Html5 have gone through gradual consolidation and subdivided: LBS has become basic attributes of apps; Pinterest receives less attention; Html5 development will be more rational.

Market keywords

Product Product is the keyword for all business. We put it here because we were impressed by the visit to Evernote and other local enterprises. Compared to Chinese startups, these companies focus more on products instead of how to compete for users or how to seize the market. For example, Evernote has been emphasizing: "We only pay attention to our own things."

Capital Japan's consumption rate is times of that of the US, 22 times of that of China, but VC remains optimistic about the mobile Internet market in China. VC pays more attention to mobile-first platform companies; to new services instead of optimizing existing services. With regard to Chinese market, Fu Yuquan, Vice President of

Wondershare Software, believes that ultimately it will be a battle of the capital and only a few giants will survive.

Market keywords

HTML5

After the hype in the first half of this year, HTML5 gradually cools down like the LBS. Chinese products appeared. Facebook also begins to reorganize its approach: It has been going too fast on HTML5 before, ignoring the demand for native app. But HTML5's future remains bright. We believe that this will remain a position for future mobile Internet will coexist with native APP.

Mobile payment

VC favors mobile payment the most, because it has the clearest mode of monetization. Yet, the entry level is high: firstly, mobile payment is a channeling business and not a profitable by one itself. Secondly, mobile payment is not only about card reader but more about payment experience. Thirdly, do not underestimate the importance of knowledge. Knowledge of the industry, policy, and finance are all required for you to play in the field.

Market keywords

Globalization This has been the key word of GMIC and of the industry. As the industry advances, the picture gets clearer, eg. minor differences between Asian markets, cultural differences between Asia and European markets, localized design and the promotion of globalization. Take our member company for example: Wondershare has more overseas users covering more than 160 countries and regions around the world; 70%

of the 3G.CN (3G 门户) users are overseas users and its GO products have been

released in more than 30 languages globally.

We hope that through visits and the two-day Conference in Silicon Valley, we can make significant progress in business development.

Market Watch – user habit

According to the analysis, the average users spend 2 hours a day on their mobile terminals and the App takes up 85%.

Other: 85% users cannot live without a mobile phone, and 88% use thier mobile phone everyday.

Mobile gaming is the most commonly used type of Apps, accounting for 49%; social networking, 30%; entertainment, 7%; News, 6%

Users spend an average of 47 minutes everyday on gaming.

In addition, the number of paid users for new apps plummeted. Mobile game revenue is expected to fall from 92.5% in 2010 to 12.5% in 2014.

Official Events | China SF

China SF in San Francisco, through conllaboration and cooperation with the local government, hopes to help the Chinese companies in SF to deal with arising issues while settling down in US. It has offices in San Francisco, Shanghai and Beijing.

In this event, SF has sent their authoritative and business representatives for a face-to-face exchange with the delegates.

SV Angel

Founded by the legendary angel investor Ron Conway who invested in Google, Facebook, Twitter and Zynga, and headquartered in Silicon Valley, the Fund worths about $ 60 million and makes small investments in early stage startups.

As of 2011, it has invested in Twitter, Foursquare, Groupon, Dropbox, Square, Filpboard, AirBnB and other 220 startup projects. More than half of the startups received 1st round financing, and 25% of them have received investments from Top 10 venture capitals.

The average investment is about US $ 150,000 (approximately 1%~5% of equity). Priority investment projects are approximately between $ 0.5 to 1 million.

Projects with long-term influence are preferred, especially those founded by elite entrepreneurs and with the possibility of future cooperation.

SV Angel views:

Two main market driving forces: mobile and global 3 future directions for future market:

New Media Channel, Real Time Data Consumption O2O Commerce Collaborative Consumptions

A technology update cycle generally lasts for about 20-25 years, so it is only in its early stage now. This industry is far from being called a bubble. SV Angel's investment will keep this momentum for at least 5 years. SV Angel has never been so optimistic about the industry, and doesn't think the

industry shown any trend of slowing down. The next Google and Facebook will come from of the Y Combinator.

Oracle

Focused on developing computer hardware and software solutions

Not too much spending on advertising.

Challenge - 53% of the customer's budget is spent on business technology, only 37% on new investment.

Rackspace

Invests in seed stage companies in Silicon Valley

Founded in 1998, and went public in 2000

Leader of open cloud computing, the same contribution as Linux and Android in terms of cloud technology.

Cooperates with NASA and Open Stack Platform.

Twilio

Integrates features such as phone and SMS API for app developers.

Launched Twilio Client service that helps developers integrate flexible and low-cost Internet phone (VoIP) function.

Looking for Chinese investments and cooperation with Chinese developers

SF Citi sharing

The association, together San Francisco tech companies, aims to improve understanding of the development and progress of science and technology.

It has 345 member companies and organizations. Twitter, Google and Zynga are also members of the Group

Overall, there are 1600 tech companies in Silicon Valley

20,000 professionals in Silicon Valley, with 29% annual growth.

Ron Conway, the prominent angel investor, and the Mayor of San Francisco will come to China next month (November)

Its social network has now expanded to other areas beyond San Francisco

Company visits | TapJoy

Introduction

A platform that allows user to select customized and distribution. Leader in gaming revenue solution and traffic allocation services

Founded in 2007, and has 15 offices in the United States, Europe, Asia and other parts of the world.

Operation

Tapjoy has over 9 million mobile users around the world

75,000 apps

About 900,000 monthly active users

Cooperates with 7,000 develoers

Financial situation

In 2011, it announced a $ 21 million financing. This round of financing was led by Rho Ventures. Other major supporters included InterWest Partners, North Bridge Venture Partners and d. E. Shaw Ventures and other companies.

Tapjoy: committed to connecting developers with the advertising industry

Previous road

Started from mobile gaming. There were some difficulties on the way: one was a how to make money from a successful game; another was the way to promote and to attract users. These difficulties are related to the promotion platform.

Analysis

Users don't like paid game, while ads keep free games profitable. About 5%-6% percent users are willing to buy contents in a free game. The rest 95% will be the audience of mobile ads. Mobile advertising reaches 2 billion people in the US.

Business Model

Developers can use the Apple platform to buy these points; or, Tapjoy can sign with the advertisers to demonstrate these points for free. Tapjoy has a Website to offer guidance to the user.

Current situation

At present it has 70,000 App, more than 900 million mobile users (with a daily increase of 100 million) and 15 branch companies. Cooperates with Google and other large companies.

Business model

Professional mobile value exchange platform

Consumer-oriented HTML5 mobile app market

Compared to the ad units of the mobile apps, 6 times more has been monetized

In China

The Beijing Branch was established at the beginning of this year. Shanghai was set up in October. China has seen faster growth on IOS and Android platform. 25 million IOS devices and 3 million Android devices use its service. The service is activated 100,000 times everyday. Tracking survey found that after one month, 45% users will have second visit.

Business model

95% is for unpaid customers. 3 main parties: advertisers, developers, and users. Advertisers are primarily app advertisers, such as weather reports. When they raise their needs, users will see. When users meet advertisers' needs, they will get gold coins that can be used for paid contents so that they can continue to play.

Developers can receive income from the advertising. Not only the developers, traditional advertisers can also make profit with this mode.

Let users eventually complete the registration. Advertiser's registration fee is also in proportion with the total registration number. This is different from the traditional.

54% of the users 25% of the users 19% of the users

Game Addicts Time Killers Entertainment Seekers

Andriod users: 36%IOS users: 64%

Andriod users: 56%IOS users: 44%

Andriod users: 56%IOS users: 44%

Male: 45%Female: 55% Male: 65%Female: 35% Male: 52%Female: 48%

Average age: 31 Average age: 29 Average age: 29

College graduates: 31% Professionals: 24% High income: 18%

College graduates: 33% Professionals: 22% High income: 19%

College graduates: 35% Professionals: 23% High income: 16%

Revenue from Smartphone: 26USD Revenue from notebook: 31USD

Revenue from Smartphone: 4USD Revenue from notebook: 22USD

Revenue from Smartphone: 16USD Revenue from notebook: 24USD

Company visits| Zynga

Introduction

Top social game company.

Founded in June 2007, it began to make profit in the same autumn.

Headquartered in San Francisco,it employs more than 2000 people, and has office in Beijing

Core team： Mark Pincus (CEO)、 Cadir Lee (CTO)、 Dave Wehner (CFO)

Discussion

Zynga is expanding its gaming market to other devices such as PC, notebook and phone,

and its game type to holiday-specific contents and board games. User base is also expanded to the elderly.

Mobile distribution platform: it is starting to open up, allowing other developers to create the games in order to grab market shares and expand profit channels.

Operation

306 million monthly active users, distributed in 175 countries

More than 3,000 employees spread across 22 offices in 19 countries

Beijing Office has 160 employees. Cooperates with Tencent and SINA

About 72 million users in China

Financial situation

Q3 financial statement have dropped as expected, besides decreasing the number of staff in the Austin Studio by 5%, Zynga also stops operating in the Boston studio, and plans to close the Japan and the UK offices.

Q2 revenue was $ 332 million, it was below analyst's expectations of $ 344 million; earnings per share was 3 cents a share, below the expectations of 5 cents.

Business model

Virtual goods transactions and advertising

Social platform game

Mobile distribution platform

From the beginning of June this year, Zynga changed its strategies and started to allow other developers to use its platform and APIs, utilizing Zynga's huge cross-marketing potential to expand the coverage of games from other games developers.

This distribution platform not only brings more powerful promotion and marketing for other developers but also expand revenues of Zynga's own channel, without relying solely on its own games, which makes the company eliminates the need to constantly develop new flagship games to maintain revenue growth and relieve the pressure as a social gaming leader.

At the same time, Zynga increases its efforts in the Chinese market, trying to lead Chinese developers to the more profit-making overseas market, thus driving revenue growth of two sides.

Company visit | Founders Den

Company profile

A small club for entrepreneurs based in SOMA, San Francisco CA,

Joint office model: to provide private and shared office space for entrepreneurs

Operation

Founded in 2011, its now has hundreds of partners

Now about 15 startups are settled in, and more than 30 have left.

Founders Den has four founders. Recommendations are needed for settling in.

Business model

Currently 15 startups are settled in. Since its founding one and a half years ago, more than 30 startups have gone through their early stages and left.

Room for five people is about $ 1200 per month

Private space of three people is $ 400 a month

Founders Den is like a private entrepreneur Club

A non-profit organization

It hopes to gather these entrepreneurs and brainstorm together.

The founder planned to reserve 10% seats for potential startups, but the enthusiam was so intensive that all seats are taken.

Company visit | Evernote

The No.1 multi-platform /cloud storage note-taking software, founded in 2007.

Core team: Stepan Pachikov (founder), Phil Libin (CEO), Dave Engberg (CTO)

66 days after the product was released it has 1 million users, and by August this year, Evernote has had 38 million users, with a daily growth of 50,000 on average. Several months ago it received a $ 70 million D round of funding. It is valued at $ 1 billion, with 1.4 million paying subscribers.

Business model: Free+Premium

Gather early core users through free services (The easiest way to have 1 million paid users is to have 1 billion free users--Evernote CEO Phil Libin)

By providing amazing free product, the accumulation of time and customer experience, as well as ongoing updates of high quality value-added services, Evernote pushs active users to become paid ones, and the conversion rate is above 1% (Phil Libin initially assumed 1% conversion rate will be profitable, and now the actual conversion rate is more than 5%).

Gross profit margin if ensured by good cost control.

Average revenues per user of different OS With respect to the mobile platform, the number of BlackBerry users is much lower but they are more willing to pay for the services. Average revenue obtained from an user using different OS is: Android: $1.06, Windows Phone 7:$1.44, iPhone: $1.79 BlackBerry: $2.01, iPad:$2.18

Desktop platforms Desktop Web: $1.81, Windows PC: $2.33, Mac OS: $3.16

Company visit | Discussion of Evernote

Evernote US and Evernote China are relatively independent. Why it is designed in that way? Why do you know so much about China?

We cannot run a different system in Chinese market. So we clone ourselves in China. Also, local users trust local servers more. So we divided them.

Is the service mode still "charging the users"?

It is still the paid business model. We will not make profit from your personal data (advertising). We will launch new products for enterprises, especially SMEs.

Your goal in China?

Evernote is a global enterprise, so we are aiming 100 to 200 million users in China.

Will you make adjustments for Microsoft Windows Phone?

We have compatible versions for iOS and Android. We will also have one supporting Windows phone.

Company visit | Fenwick

Company profile

At first, it offered legal services to bio companies etc. Gradually it turned into a famous law firm for IT industry.

It started in 1939 at the same place where HP was founded.

Discussion during the meeting

Engineering students had always wanted to build a company in Silicon Valley

It helped Apple to merge in 1976

It helped Electronic Arts, Symantec, Intuit, Cisco, Netscape, Ebay, Google, Yahoo, Napster, Salesforce and other enterprises

Now, their clients include 40 large and 400 smaller enterprises.

It also helped Chinese clients: it assisted in the negotiation of Yahoo and Alibaba's license

Recommend that Chinese investors have more confidence in US

Engineering students had always wanted to build a company in Silicon Valley

It helped Apple to merge in 1976

It helped Electronic Arts, Symantec, Intuit, Cisco, Netscape, Ebay, Google, Yahoo, Napster, Salesforce and other enterprises

Now, their clients include 40 large and 400 smaller enterprises.

It also helped Chinese clients: it assisted in the negotiation of Yahoo and Alibaba's license

Recommended that Chinese investors have more confidence in US

Company visit | Admob

Global leader of mobile advertising platform. On November 9, 2009, Google bought $ 750 million stocks of AdMob, marking its official entrance into mobile ad.

Covering more than 160 countries, it

is the largest mobile advertising platform in US. Over 55 billion ad impression globally per month, among which 9 billion were in China.

During the past year, Google AdMob received 120% more mobile ad requests in China.

To increase traffic: more downloads, higher ranking, and larger customer base. More ad coverage, and more profit.

First, 30% downloads are from family members or friend recommendation. 90% Chinese people use social networks. They are the key targets.

Second, grow with the developer.

Third, if you have more than one apps, you can use one to promote the other.

Four, gaming platforms can promote other apps.

Five, if you have a VC investment, ad is also a good channel.

Developers make money in three ways:

Paid app: 4% paid apps drive away a lot of customers. This paid model develops slower, and you have to spend a lot on promotion.

Freemium: 45% of the freemium users only buy for the first time. They won't buy again.

Advertising: the ad model has limitations. The market has a monitoring effect on this model. Improve brand image and increase revenue.

Conclusion: combine advantages of all these models. Paid users will generate the earliest profits. If there is no customer base, advertising in other ways to gain the advantage.

What is the difference of C2C and B2C ADMOB platforms? How will they develop?

No clear answer to the first question. Both two are being promoted. For developers, they can increase the number of users and do more analysis to improve profit; for advertisers, they are concerned about the user information and the benefits it can brings. Bears the name and other resources of Google that helps in branding and other functions.

Impact of Admob integration?

The highlight is that users on both platforms can be integrated and use the same account to filter spams. App development market is different from the desktop market. For developers with both app and desktop development, they help them both to profit.

Changes of Click-through-rate? How high is the wrong Click-through-rate?

Current developing ad mode. Click-through-rate is around 1.5%. Measures have also been taken to solve wrong Click-through-rate. For example, larger buttons to reduce the rate.

Mobile advertising has certain disadvantages: small screen size, content limitations, long loading time. What do you think?

It is a challenge. In-screen ad. Under caching technology can save the ads first, so they can open even without Internet access. While the ad is small, but it takes 20% of the screen. Traditional ad only takes 5% .

Company visit | Linkedin

Company profile (NYSE:LNKD)

• World leading professional social network

• Founded in 2002, and launched in 2003, and IPOed in May 2011.

• Speaker:Allen Blue, founder and VP of product management

Operating status

• 175 million registered users in more than 200 countries

• 2,447 employees and 6 offices around the world

• 15% users are registered through mobile devices; 23% of new visitors are visiting through mobile devices

Financial status

Q2 Revenue: $2.28 million, Q2 gross profit: $1.98 million

Business model, Income is generated from 3 parts:

Advertising – 45% Membership fee – 35% Recruitment – 20%

Focus on business expansion rather than making money. 60% of resources will be spent on strengthening the value proposition and 40% spent on innovation and expanding products

Linkedin financial indicators (Q2 of 2012)

Total revenue rose 89% over the same period last year, reaching a record $ 228.2 million

Recruitment solutions revenue was 121.6 million, a 107% increase compared with the same period last year. In the quarter, revenue from recruitment solutions raised from last year's 48% to 53%, taking up a big proportion of total income. There are solutions for more than 12,000 companies.

Marketing solutions revenue was $ 63.1 million, an increase of 64% compared with the previous year.

At the end of Q1, advanced subscription revenue was $ 4.35 billion, an 82% increase over the last year.

According to data from comScore, visitors (including members and non-members) increased by 30% compared to the same period last year, and in Q2 2012 the number of users reached 106 million. Page views increased by 31% to 930 million. LinkedIn's

acquisition of SlideShare in May 2012, it had the 131 millionth visitors, making LinkedIn the 26th most visited Websites in the world.

Shared topics

Compared with Facebook and Twitter, it has different relationship with the users and different projects.

On mobile: it will improve the search function and information connection features to be more user-friendly. It is difficult on mobile devices to edit and write, so it decided to focus on reading and information-sharing.

LinkedIn pays special attention to the Chinese market.

60% resources are spent on product value, and 40% on product development and research.

Discussion Linkedin's success is based on the growth of social networking

Scalability has always been the primary value. Linkedin is focused on building

quality user group

This comprehensive platform provides benefits to businesses and professionals. Linkedin is quite differen from Facebook and Twitter in attributes, relations

with users, and user numbers.

The feature of Linkedin is that its market position is clear: it is designed for professional social networking. Facebook is personal social networking, while Twitter is like broadcasting. Most Linkedin users are professionals and their colleagues. On Facebook are

relatives and friends; on Twitter are direct relations. Related activities are required on a platform to facilitate social networking. On

Linkedin it is hiring and expanding networks. On Facebook it is sharing between friends, and on Twitter is about expressing oneself.

On mobile devices, Linkedin will optimize search, reading and information-sharing functions. Because for users, it is difficult to fill in and edit information on mobile devices.

The fifth iteration of the Global Mobile Internet Conference – Beijing, will be held May 7-8, 2013 at the China National Convention Center in Beijing.

GMIC is Asia’s most influential mobile industry event, and now a rising star in Silicon Valley with GMIC SV in October 2012. For five years, GMIC is at the

forefront of the global mobile Internet industry by bringing influencers abroad to educate and inspire attendees, and outlaying potential for cross-border

cooperation among companies throughout the mobile ecosystem.

This year’s theme is Transforming Mobile Internet. GMIC Beijing 2013 will highlight how mobile internet is no longer only changing personal communication,

entertainment, and information consumption, but now making a stronghold in changing corporate operating philosophies towards sales, market channels,

healthcare, transportation, agriculture, social development and other multi-industry, multi-faceted sectors. The world is now thinking with a truer and more

comprehensive understanding of the influence technology has on our lives.

GMIC Beijing 2013 will bring together executives, entrepreneurs, and investors from 30+ countries to discuss with leading CEOs the future of the industry, as

well as showcase the latest technologies and products.

GMIC 2012 was a resounding success, attracting over 5000 attendees to Beijing. GMIC Silicon Valley 2012 was also a success attracting more than 5,400

attendees from 40+ countries, and featuring executives from Google, Facebook, Zynga, Groupon, Tencent, and more. For more details.