After giving birth to Elaine, my wife had to stay in the hospital for a few days. But today she was allowed to go home, so our family of 4 is now together in our house for the first time. It takes a bit of getting used to, when you suddenly have two kids in the house. Especially when they both decide to cry at the same time 🙂

Scott also needs to get used to Elaine a bit. He is a bit jealous that his parents are holding Elaine as well, and not only him. But I think he will get used to it quickly. He looks at Elaine a lot and even tried to touch her when she was laying in bed. Because he does not understand the difference between hitting and touching, we have to watch out that he does not unintentionally hurt her. Elaine has a small bed in the living room to lay in when she is awake during daytime, and when she is not in there Scott suddenly wants to play in there as well.

I am very happy to have the whole family at home now. It is a bit crowded, especially because we hired a nanny for Elaine as well (Scott also has his own nanny) and because my parent-in-law are visiting, but the house feels alive. Very different from just two years ago when it was just me and my wife, but I actually like it. Welcome home Elaine, you make your father very happy!

This morning my wife gave birth to our second child, a healthy daughter. Her full name is Elaine Claire van der Chijs, she was born on May 21, 2009 at 9:15 AM. Birth weight 3270 gram and a length of 51 cm. Both mother and baby are doing fine, but will need to stay at ParkwayHealth in Xintiandi for a couple of days to recover.

Just like when Scott was born in December 2007, I Twittered a bit before and after the delivery (not during the actual delivery, I was too nervous watching the whole procedure), an overview of the main tweets with the approximate times during the past hours:

6:45 AM Good morning Shanghai! Packing some things to take to the hospital, if everything goes wel’ll have a second child in a few hours!

7:15 AM Driving to ParkwayHealth, bit nervous but also happy. First time in my new car, good timing 🙂

7:15 AM Very busy on the highway into the city already, and it’s only 7:15AM. Hopefully no police yet, we’re driving without license plates.

7:25 AM Did a short video interview with my wife, she says she is not nervous for the delivery. Well, I am. We should be in hospital in 15 min.

7:45 AM In the hospital filling out all kinds of forms about the risks involved in a c-section. Does not make me feel more at ease to be honest.

7:50 AM My wife is now connected to the heart monitor. Our future baby’s heartbeat is 147, she must be nervous as well about her upcoming birth.

8:15 AM Things are going much faster than I imagined. My wife was taken to the operating room already for the epidural.

8:25 AM Going to the operating room myself now!

9:40 AM We have a healthy daughter! Elaine Claire van der Chijs was born at 9:15 AM, 3.270 kg, 51 cm. Happy!!!

10:30 AM Thanks everybody for the congratulation messages, too many to separately answer today. My wife and I read them all and are very happy!

11:15 AM Taking a short break from the hospital to drink a coffee in Xintiandi. Didn’t have time for coffee yet this morning 🙂

11:45 AM Put a few pics of my new daughter Elaine online just now at http://www.flickr.com/photo… Still cannot believe how quick it went today

A good friend of mine is planning to set up a wine bar in Shanghai. Although he is Chinese and pretty well connected, he has not been able to find a good property yet. He has been using Chinese agents, but they somehow seem to miss out on the best locations. During the past couple of months some new bars popped up in locations that he is looking for, but he did not hear about them on time. Most of these bars are run by foreigners, who seem to be able to scout these places before the Chinese agents do, which makes me wonder if there is some sort of hidden channel that I am not aware of?

If you know a good location for a wine bar, please drop me a line (email or comments) and I will put you in touch with him. What he is looking for:
– size 100-150 square meters
– location: French Concession or the area around the Portman Ritz-Carlton. If you know a place in a different location in Puxi not too far from big office buildings that might also be OK.
– price RMB 15,000-25,000

I am sure you’ll get a good bottle of wine if he finds the right place through you.

Picture (creative commons): Thomas Hawk

Last night Chinese instant messaging/gaming/social networking giant Tencent released it Q1’09 figures and they were once again impressive. I have been following Tencent for years and the company keeps amazing me with its figures. Also tech blogs outside China finally start to understand that what Tencent is doing in China is a lot more impressive than Facebook’s and MySpace’s figures, and that these two companies can learn a thing or two from China.

The Q1 revenue for Tencent was USD 366 million, 20% over Q4’08 and 75% over Q1’08. That’s already a major achievement in a global recession, but even more remarkable is where the revenues come from. Most non-Chinese social networks still rely for the majority of their revenues on advertising. Tencent, however, only had USD 21 million in advertising revenue, which is a decrease of 30% compared to Q4’08. USD 342 million came out of virtual items and microtransactions, and out of this amount and amazing 64 million USD was mobile value added services!

Tencent seems to be pretty much recession proof because of its micro-transactions, people keep on spending money on this even when the economy is not doing very well. The main reason is that people always want entertainment, even (or maybe especially) when the economy is getting hit by a global crisis. However, Tencent remains a bit cautious for the future: “The Company’s Internet and wireless value-added services, which are characterized by user-paid small ticket consumption items, have so far been rather resilient in the downturn, although the Company is uncertain of its performance should the economy continue to weaken for a prolonged period. “.

Their advertising income is not very important to the companies bottom line anymore, only about 6% of total revenue is advertising. So the fact that the ad income nosedived by 30% since the last quarter is not good, but the company does not really feel it. The company remarked: “The decline reflected lower advertising spending by customers as they imposed more cautious cost control measures, which include delaying the budget approval process and signing of framework contracts, under the uncertain economic environment.” They also note that for the rest of the year there is not a lot of visibility yet.

For Spil Games Asia I am seeing similar things. Meeting advertising income targets is a challenge, but income from virtual items and micro-transactions is growing very fast (we just started doing this and are now seeing growth rates of 20-30% per week). Mobile games are also doing well, but our main target for now is to grow our mobile audience and not yet to earn a lot of money from it. Our focus will be on monetization of games through micro-transactions, that’s where the real money is. But we won’t neglect advertising of course, both revenue streams will be important for us, especially for casual flash games.

Our compound has a nice pool to hang out at during summer. Over the weekend the thermometer hit 34 degrees Celsius (93 Fahrenheit), but what do you think? Someone at our compound’s management company decided this is a good time to start renovating the pool. To be fair, they actually already started a few weeks ago (when it was just 24 degrees), and they “hope to be finished in June”. Well, I certainly hope that won’t be delayed until July or August.

Today it’s 5.12 and it’s exactly one year ago that a huge earthquake hit Sichuan province. Last year most entertainment websites, including Tudou, game.com.cn and xiaoyouxi.com, shut down for 3 days because of the national mourning. Today you will see that many sites on the Chinese Internet changed their look as well. Tudou for example did not show any ads on its homepage during most of the day and the homepage had a different look and feel – only black and white with some Tudou orange.

Last year Tudou had the first video of the earthquake on the site, shot during the earthquake. The person uploaded it to Tudou immediately after the earth stopped shaking. The film was viewed over 5 million times and the guy who made it won one of the Tudou Video Awards this year because of his reporting. In total there are now about 30,000 films on Tudou about the 5.12 earthquake, and as a reminder of what happened to everybody we put them all together here.

Rupert Murdoch’s announcement that he does not believe in free content on the Internet made me think a bit over the weekend. So far I have always said that I believe that everything on the Internet will eventually be free. I still believe that for the majority of the content this will be the case, but the more I think about it the more I see that a shift may be coming.

If you look at music for example, even though most music is available for free if you search for it, many people are willing to pay for it online. iTunes is big business for Apple. The trick is a combination of an application that is easy to use, with a great user experience and a relatively low price. iTunes combines all three of these. They have a huge catalog of music, from mainstream to very obscure, that is easy to find, easy to download and easy to pay for. You see a similar thing with e-books, if you want to find free versions of books and know where to look for them, you can find them. But Amazon announced this week that 35% of its book sales are e-books (figure still seems incredibly high to me), people prefer to pay for them.

In games you also see similar things. In China you cannot charge anything for a game, people do not want to pay for them because they are available for free all over the Internet and very easy to find as well. But does that mean that Chinese users are not willing to pay anything to have a better gaming experience? No, they are willing to spend money. That’s why virtual goods took off over the past 3 years, and it has become a huge revenue stream for many game companies. Even if the basic service (=the game) is free, people are still willing top pay to enhance the service.

Something similar might happen to news. I don’t think people will pay subscriptions to online newspapers like they do with paper versions, at least not at the same rates that newspapers are currently asking for. But there are other business models possible. First of all it’s important to realize that putting a paper behind a firewall will lead to a huge decrease in the number of readers, which leads to a lot less advertising income (currently the main source of income for online papers). But not only that, you also immediately lose a high Google ranking because links to your articles either don’t work anymore (if you also put the archive behind a firewall) or because nobody will link to you (because readers who click on the link would have to pay, so linking does not make much sense). This means that a paper should think very seriously about the consequences before making this decision.

I think news is available for free everywhere on the Internet, so you cannot charge for it anymore. It’s too late for that now and trying to do that will lead to failure. But you can charge for other things. For example, make the basic paper free (all news stories as sourced through news agencies) and make sure the quality is as high as it used to be. But put other parts of the paper (for example the art, books, travel or real estate section) behind a paid firewall. Link to these articles from your basic free paper but only give the first 1-2 paragraphs (or a summary) away for free. In this way you still have the link in Google, and people might still link to it.

But don’t try to sell subscriptions for this – use micro-payments! Charge a very small amount of money for it. So small that nobody really thinks twice about it. How much? You would need to do some research on this, but likely less than 5 cents (USD cents) per article. If that’s the case many people might decide to read the article, psychologically a few cents does not hurt your wallet.

This will only work if there are easy payment solutions. If you have to get your credit card out first or need to go to Paypal it wont work. There should be a 1-click solution, you click and you have access. Newspapers should cooperate on this, they should come up with a standard payment solution for all newspapers together. E.g. buy a credit online that can be used for all newspapers online with one click. Just like it works with game cards in China, they can be used with many games and only when the credit is used in a certain game that operator gets the money.

I believe micro payments combined with advertising might be a solution for the online newspaper industry. But of course there are other solutions possible. I believe paper newspapers will eventually die. They are just too expensive, both in terms of the material used and because of physical distribution. E-book readers will get better and better and will eventually be so good that the user experience will be as good (or even better) as the old traditional paper newspaper. I therefore believe e-paper will take over the mass media market. Costs will be a lot lower (because no paper and no distribution costs) and the paper could be updated continuously. Newspapers need to reinvent themselves for this for this.

A subscription to a newspaper on an e-book is still a bit too conservative in my opinion. I think you need to think one step further: newspapers should work together and offer combined subscriptions. Because the variable costs for e-papers are zero (or almost zero) the papers should work together and offer a subscription to all papers together. At the end of each month you can do a calculation based on actual usage per newspaper and split the revenues. It’s as simple as that. The customer has more freedom, the paper can still put ads in its e-paper version, and only the quality or marketing of the paper determines whether more people will read it.

This model could be combined with the micro transaction model that I described above: users get credits when they subscribe and use these for non-free content online. And these credits can of course be used for every paper. With these credits a whole new world of possibilities opens up, think about what happens if advertisers start giving away credits.

Just a few thoughts on a Sunday night. I have a lot more ideas about this, too many for a blog post. I am sure News Corp’s Freemium teams will come up with a lot more and a lot better ideas. I look forward to their results and to what News Corp will eventually implement.

I now start to believe that users might accept that they have to pay for good content, but it depends on how you implement it. I also believe that content will only get better when the creators get paid for it. Rupert Murdoch might be able to change the current rules of the game – or at least initiate the change.

Yesterday I was invited to a shareholder brunch for the opening of M1NT‘s new rooftop terrace. I had been there a couple of times during the pre-construction already and was impressed by the end result. The terrace now has a wooden deck with tables, white pillow couches and a hammock with a view over the city. To get a tropical feel they even built a waterfall on the roof. In the middle there’s a well-stocked bar, where M1NT’s Danielo Hotti and his experienced cocktail staff were making excellent drinks all afternoon.

The brunch was as good as expected. Chef Dan Segall was busy running around all the tables serving everybody with salads (we had 6 or 7 salads in total, from simple tomato salads to an exquisite Thai salmon salad) and all kinds of barbecued meat and fish. Lamb, beef, pork, chicken, salmon and large shrimps, the food was all excellent and kept on coming. And so did the drinks: there was a free flow of wine and cocktails, and each time my glass was almost empty a new one was already put in front of me. That’s how I like it!

What I also like were the free head and neck massages that were provided. A few massage girls walked around the venue and gave everybody who wanted one a massage. Heavenly while sitting in the sun sipping on a Pimm’s cocktail!

From next weekend on you can try out the M1NT rooftop terrace brunch for yourself. For RMB 398 you get unlimited high quality food prepared by Dan Segall himself (he told me he will be in charge) and all the drinks you want on the rooftop terrace with the best view in town. More expensive than the average brunch in town, but you’ll get value for money. Looking forward to seeing some of you there this summer!