When Deng Yaping resurfaced in the spotlight earlier this month as a guest speaker at the annual Camp Beckenbauer sports conference, she was asked the same question that has dogged her ever since 2013: “Did you really splurge two billion RMB (roughly 320 million USD at the time) on Jike for nothing in return?”
This time, the former four-time Olympic gold medalist in table tennis finally chose not to shy away from answering it, “In the end, justice will prevail. Rumors are sure to be refuted.”
Deng was referring to her much-criticized tenure at Jike Sousuo (“Jee-Keh-Sow-Swoh”, literally, Instant Search), a wholly state-owned search engine she spearheaded as a government effort to provide “intellectual property right protected web searches” and elevate the nation’s soft power in the tech sector.
Deng Yaping at the launch event of Jike.com
Jike was a subsidiary of People’s Daily, the Chinese Communist Party’s mouthpiece newspaper. When Jike was launched to great fanfare on June 30, 2010, the ten-year-old Baidu had already been dangling a remarkably large market share (one study by Analysys International said 75.5% as of Q4 2010) that even Google had long coveted.
Deng was anointed as the deputy secretary-general of People’s Daily in October 2010 and placed at the helm of Jike. Some eyes rolled at the announcement: can a former athlete with zero track record in the tech industry live up to the expectation?
Deng Yaping rose to stardom as the world’s most recognized table tennis player in late 1980s and secured the No.1 Seed title for an unrivaled eight consecutive years from 1990 to 1997. Her hair pulled into a pigtail, her cherubic unadorned face and her signature loud cheer to herself during matches radiated confidence and chumminess and endeared her to every Chinese in that era.
Deng, then 23, at the 1996 Atlanta Summer Olympics.
Her fighting spirit was in full play even outside the sports arena. After retiring from table tennis in 1998 at the age of 25, she, despite having no prior knowledge of even the English alphabet, went on to earn a bachelor’s degree in English literature from Tsinghua University, a master’s degree from The University of Nottingham in England and a Ph.D in land economics from Oxford University.
So when her qualifications as the head of Jike were questioned, she was eager to prove once again her ability to overcome insurmountable difficulties. She consulted Kai-fu Lee, former president of Google China, and followed his advice on hiring the top talent in the search engine realm, including Google China engineering director Jun Liu, Google U.S. software engineer Wang Jiang, and Jiang Qian, one of the original developers for Google’s Android operating system, among other mid-level managers from Baidu and Tencent.
Many who joined Jike had the same faith in the seemingly infallible project as Deng did. Indeed, Jike had many advantageous edges over other search engines, including exclusive access to the databases of scientific publications and journals, the sponsorship of state-run media outlets, such as China Central Television and China Daily, which are also rich repositories of information, and above all, government money to provide the kickstart. Former Jike employees told China Business News that initial state investment in Jike totaled 200 million RMB.
Jike was not entirely without accomplishments. In the lead-up to the Chinese New Year in early 2012, Jike developed a software application for fast and easy online train ticket booking, which could aid tens of millions of Chinese on the move for holiday family reunions. It attracted a substantial influx of traffic to the site.
However, leading a star-studded team, Deng Yaping turned into a supercilious orator and distanced herself from the public with her elitist remarks. She commented on Baidu’s dominance by saying, “We represent the state. Fulfilling duties delegated to us by the state, rather than making a profit, is of utmost importance to us. You (Baidu) should be less concerned with beating us and more concerned with helping us and giving us suggestions.”
More notoriously, she took great pride in her employer and claimed that People’s Daily had “never published fake news in the past 62 years,” a baseless assertion that anyone remotely familiar with China’s propaganda organ would dismiss as a monstrous lie.
Deng’s faux pas may be harmless to the overall development of the site, but her lack of experience certainly presented roadblocks. Among reasons industry observers cite for Jike’s failure, one is confusion in management.
“She managed to blend into the tech circle within the shortest period of time, but every time she gave a public speech, there were snickers in the audience, because this circle will only recognize what you have actually done,” says an insider quoted by the China Business Network.
“Being in the tech business, it’s okay if you do not come from the grassroots, but you must have a grassroots mindset, which a person living in the limelight like Deng lacks,” Ge Jia, an analyst said in an interview.
Another is overoptimism. Baidu’s earnings report shows that for the third quarter of 2013, its traffic acquisition cost was 1.04 billion RMB. Although the 200 million RMB initial funds sounded like generous startup capital, it was a mere pittance compared to what Jike needed to find a foothold.
Deng may not be bothered by Jike’s profitability, or lack thereof, but it also means Jike was not at all ready for the market.
In November 2013, Jike witnessed an exodus of its core staff. In December, it merged with Panguso, another state-run search engine owned by the official Xinhua News Agency at the end of 2013 to avoid internal friction and create synergy. Visitors to either Jike or Pangu are redirected to ChinaSo, a new brand born out of the merger. Deng left the post she held for three years, with little market share gained for Jike.
Since then, she has often come under fire for squandering two billion RMB of taxpayers’ money, an accusation some analysts say is out of proportion.
Screenshot of ChinaSo.com
“With its negligible traffic, Jike can’t possibly cost two billion RMB.”
The new ChinaSo has enriched its search offerings compared with its predecessors. It covers seven search categories and 16 channels, including sports, auto, and real estate. But it cannot capture even 0.4% of the search market. Information about the person presiding over ChinaSo is nowhere to be found on the site.
“There certainly is a president. But with Deng’s painful lesson, who wants to be in the eye of the storm again? How many people out there can really bear the criticism of ‘wasting two billion RMB of taxpayers’ money?’” Ge Jia said.