September 2006

Robin Li from humble engineer to a net worth of 3 Billion USD

Just as Ying Fang grew up in the Cultural revolution Robin's life was shaped by it as well. He was born in 1968 the fourth of five children. He was a gifted student and as such attended China's top university, Beijing University in 1988. A year later we would hear about Tiananmen Square and the pro democracy demonstrating, for Robin Li it was much more personal, His campus would be shut down.

The series of challenges for Robin would steer him to State University of New York-Buffalo in the early 90's. Coincidently the same university as Ying Fang who we also profiled in our newsletter. After graduating in 1994 with a Masters degree he developed a software program for the online edition of the Wall Street Journal as well as working on sorting information from the internet. In 1996 he developed a search mechanism called "link analysis" ranking web sites on the number links it had to it--thereby sorting web sites by popularity.

Though he was excited others were not -- a chance meeting came in Silicon Valley soon after when William Chang, Chief Technology Officer at Infoseek met Li at a conference. Change recruited Li to manage search dev elopement.

In the summer of 1998 Eric Xu introduced Li who was 30 at the time to John Wu who was head of Yahoo's Search team. Li was passionate about search engine dev elopement but Infoseek and Yahoo were not losing interested in the search engine dev elopement in and around 1998 and Yahoo had outsourced its search engine functions to a little known startup called Google.

In 1999 all the pessimism surrounding search engine dev elopement did not discourage Li, he set up a company called Baidu. Baidu has a market capitalization of over 3 Billion USD and operates the 4th most popular web site in the world. Baidu is gaining market share in China, even when the Chinese government sensors the site. The strategy of aligning with the Chinese government is paying off for Baidu, which has let censors oversee the site and in exchange the Chinese government has imposed strict rules and censorship on other foreign Internet companies , such as Google. The effect is Baidu has sealed its dominance in the Chinese market through government protection.

This is not new, Chinese entrepreneurs have been out competing stronger brands from the US for the last few years. The global US Internet companies have failed to dislodge the Chinese Internet companies.

This is yet another example of how business, politics and connections are all intertwined in China. To run a successful business in China there is a need to have some political backing at various levels.