You might say that Youku, which means “what’s best and what’s cool” in Chinese, is the YouTube of China, except that it is closer to Hulu, a free online video service in the United States that offers hit TV shows. Rather than the user-generated content that forms the core of YouTube, “Youku serves as a nationwide on-demand video content syndication platform with over 1,500 traditional media partners,” explains Koo. “Professional media content constitutes over 70% of our viewership.”

China’s internet audience has exploded this decade to the point where it now is 340 million, the largest in the world. With online video penetration above 80%, an estimated 300 million users are watching video over the internet in China late in 2009.

There were some 200 online video companies when Youku launched in 2006, but Koo says that the company now holds better than a 50% market share in terms of user time spent. It boasts of more than 150 million unique visitors every month, with each spending an average of an hour per day.

How did they get so big so fast? Partly, it appears, by nailing video search technology, partly by nailing customization, and partly by building strong relationships with China’s state-owned media companies.

Search and customization technologies are closely intertwined.

“Video viewing is fundamentally different from reading text,” Koo explains. “One can read 10 headlines together and grasp a variety of information, whereas it is impossible to open 10 different video windows and effectively watch them all at once.

“As such, finding the right video to watch is a lot more important for a video website,” he continues, “as you require a lot more focused attention from your users. We believe one of the most important benchmarks for a leading video platform is the ability to help users find ‘what’s best and what’s cool’ based on each user’s individual preferences.”

Next, Youku had to forge partnerships with government-owned television stations and other state media. The production of professional content is highly fragmented in China, with around 300 TV companies and thousands of channels as well as thousands of media production companies, so this required a nationwide effort.

Complicating this challenge is the fact that not only does the government own the media, it very tightly regulates what types of content can be published, censoring political, religious, and sexual content as well as most foreign media.

News about the rebellion that broke out inside Iran after last spring’s disputed election, for example, has been heavily censored by the Chinese government.

Western observers believe that Beijing fears that news of how tech-savvy Iranians have been able to organize protests and get around a ban on media coverage via social media like Twitter, proxy servers, and a variety of viral communication strategies could prove contagious in the event of future social unrest inside China.

Youku is regulated by the State Administration of Film, Radio, and Television. “We actively monitor video content uploaded by our partners and users,” Koo says. “For example, we actively screen out any pornographic, or even racy, content.”

By early 2008, Koo and his associates were ready to begin recruiting advertisers in earnest. They offered a safe environment for advertisers juxtaposed with highly desirable professional content, and brand names have shown up by the truckload.

Youku has booked ad revenue from over 290 companies to date including P&G, Uni-lever, Coke, Pepsi, Nike, Adidas, L’Oréal, IBM, Microsoft, Google, Samsung, Nokia, Sony Ericsson, Motorola, Mercedes-Benz, BMW, and VW/Audi, as well as the leading domestic brands.

The company also earns search ad revenue through a partnership with search giants Baidu and Google. The company recently launched its 3G mobile subscription version of Youku, and also a video e-commerce partnership with Taobao, the eBay of China.

“Proving our business model is the most important challenge at hand,” says Koo, “and extending our product model from PC to wireless and TV are longer-term challenges. We provide TV-like, cross-media, and internet marketing solutions to our advertiser clients that are growing rapidly. We see a growing
and satisfied advertiser base that is increasing marketing spending on our platform quickly.”

Also on Stanford Knowledgebase:

1. Advice From Alums In China
2. China: Moving Up The Value Chain
3. Consulting to Bridge U.S. and China

Now a professor emeritus of economics at the University of California’s Haas School of Business, Williamson was a freshly married engineer when he arrived at the Stanford Business School in 1958 to pursue an advanced degree. “I took fall quarter economics with Jim Howell and found economics was quite fascinating stuff and that I could bring many of the tools I learned as an engineer to bear,” he said.

Then came the other half of the one-two punch: a young professor named Chuck Bonini, with whom he shared an office. Bonini “could see I had an applied interest even though I was in economics. He had come out of an interdisciplinary program at Carnegie Mellon and he thought I was well matched for it, and he plugged it several times. They were both enormously helpful in reshaping my career.” At the time, he said, the Stanford MBA Program was strong but the School’s PhD Program was being built.

At Carnegie Mellon, Williamson met up with Jim March, a young professor who would go on to build the organizational theory program into a powerhouse at the GSB. “Those were marvelous years,” William-son said of graduate school, where he applied what he had learned in both engineering and business school to economics research.

Williamson is perhaps best known for his 1975 book Markets and Hierarchies in which he developed a theory of transaction costs, initiated by Ronald Coase, the 1991 Nobel laureate. William-son explained why very large firms are sometimes more efficient than smaller firms contracting with each other through markets. His ideas on the efficient boundaries of a firm have been useful to managers in various industries for analyzing the costs and benefits of joint ventures, mergers, acquisitions, spin-
offs, and outsourcing. The Nobel committee cited as an example a coal-burning electric plant near a coal mine. If there is only one coal mine in the region, integrating the two is economically sensible. If more mines are nearby, integrating with one mine could undermine the advantages of allowing coal companies to compete for the utility’s business.

“Olly’s work on transaction cost economics is taught in MBA courses on economics, strategy, organizations, marketing, and nonmarket strategy,” said GSB Senior Associate Dean Glenn Carroll, PhD ’82, who was a colleague of Williamson’s at Haas before returning to Stanford. A half-dozen Stanford faculty in economics, organizational behavior, and political science presented papers at a 1995 conference honoring Williamson, and Carroll co-edited a 1998 book about their ideas called Firms, Markets and Hierarchies.

Also on Stanford Knowledgebase:

1. QOTD: Nobel Laureate Alumnus on Corporate Governance
2. Nobel Laureate Sharpe on Retirement Economics
3. Michael Harrison Named 2009 Davis Award Recipient

“I was helping Fox News produce a documentary marking the 15th anniversary of [Reagan's] Berlin Wall address. After the day’s shooting, [anchorman Tony] Snow and I walked through the Brandenburg Gate to the former East Berlin, a place that once appeared drab and lifeless but now pulsed with color and energy. In a building that had once housed a branch of the old Communist government, Snow and I discovered a particularly vivid demonstration of the victory of free markets: a Rolls-Royce dealership.”
—Peter Robinson, MBA ‘90, a research fellow at the Hoover Institution and former presidential speechwriter, reflecting in Forbes about the speech he drafted for President Reagan, urging “Mr. Gorbachev” to “tear down this wall.”

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Avner Mandelman, director of Venator Capital Management

“In a complicated task involving critical decisions, working with good partners and listening to them is almost always better that working alone. Somehow, the group process ensures that most bad ideas are weeded out, even if their owners shout and cajole, while ideas that make sense influence the group’s opinion, even if their owners speak softly.”
—Avner Mandelman, MBA ‘76, director of Venator Capital Management, writing in the Globe and Mail about applying a lesson he learned at the GSB to his investment strategy.

Also on Stanford Knowledgebase:

1. Retirement Investing: You May Not Be Up To It
2. Personal Finance: Investing for Retirement The Hard Work of Feathering Your Nest
3. QOTD: Nobel Laureate Alumnus on Corporate Governance

“What happened in the world economy is something that happens every 100 or 120 years; it was completely unexpected. … If what you did was an error, there has to be a change in management. But if it was an act of God, and it wasn’t your fault, why? I believe that in many companies [fired execs are] sacrificial lambs, to make it look as if you’re doing something when you’re not. When you’re in a crisis, changing management is a false move.”
—Lorenzo Zambrano, MBA ‘68, longtime chairman and CEO of Cemex, in a Q&A with Business Week, his first since he brought the world’s third largest cement producer back from last year’s financial crisis.

• Zambrano was profiled in Stanford Business magazine in 2008.

Also on Stanford Knowledgebase:

1. QOTD: Opening Remarks
2. QOTD: Rebellion with a Suit and Tie
3. QOTD: In Investing, Two Heads Are Better Than One

Q: With regard to striking a balance, what do you think the right approach is for resource energy extraction and natural resource protection?
A: You start by having a broad approach to energy development. The Bush administration did not advance a renewable energy agenda in any material way. It was all oil and gas. A third of U.S. domestic oil and gas production takes place on public lands within the Interior Department’s jurisdiction, so the department must play an important role in that area.

But the previous administration virtually ignored the huge  untapped potential of renewable energy. So the first step in striking a balanced approach is to also promote renewable energy, which we are doing.

• Legal Matters wtih David J. Hayes and Michael Wara (PDF)
  

Also on Stanford Knowledgebase:

1. Cars and Trucks for Energy Resilience Could Start with Retrofitting Old Models Today
2. A Call to Action for Energy Independence
3. Carbon Sequestration May Enhance Energy Production

“Is it possible that we have weathered the worst of the storm? While there is no doubt that times will remain tough for a while, smart business leaders are beginning to think about what will come next, and how to be ready to make the most of it.”

– Paul Staelin, MBA ‘01, vice president of Birst, a provider of business analytics software, writing in destinationCRM about business recovery in 2010.

Also on Stanford Knowledgebase:

1. Recovery
2. Slow Growth for Business-to-Business Online Buying
3. QOTD: Privatization Urged in Gulf

At Stanford, Prof. Barth is the Joan E. Horngren Professor of Accounting and Robert and the Marilyn Jaedicke Faculty Fellow for 2009-2010. She is a former member of the International Accounting Standard Board (IASB).

• Includes audio interview

Also on Stanford Knowledgebase:

1. New Courses on Financial Reporting
2. From Understanding and Observing to an Established Vision
3. Failure Is a Key to Understanding Success

Also on Stanford Knowledgebase:

1. Leading Innovation
2. Social Innovation: Ask an Expert
3. Stanford Roundtable: Recession Ending, Innovation Needed

Individuals’ implicit racial prejudices corresponded with a reluctance to vote for President Barack Obama and with opposition to his health care reform plan, according to a study coauthored by Stanford Graduate School of Business Professor Brian Lowery. Subjects were more likely to support a health care reform proposal attributed to former President Bill Clinton than the same proposal from Obama.

STANFORD GRADUATE SCHOOL OF BUSINESS—Does racism affect voters’ responses to President Barack Obama’s policies? In September, former president Jimmy Carter argued yes in an interview with Brian Williams of NBC. A Democracy Corps focus-group study published on Oct. 16 disagreed, concluding that racial issues do not affect voters’ beliefs, and that it was time for those who think otherwise to “get over it.”

Recent research from the Stanford Graduate School of Business finds that Carter is correct –– race does matter. People’s implicit racial prejudices corresponded with a reluctance to vote for Obama and with opposition to his health care reform plan, the study finds. In fact, when a description of a health care reform proposal was attributed to former President Bill Clinton rather than Obama, reactions suggested that individuals high in nonconscious antiblack prejudice tended to oppose Obama, at least in part because they dislike him as a black person.

“Many people are influenced by race, and either will not admit it or don’t know it,” says Brian Lowery, an associate professor of organizational behavior. To find evidence for “implicit,” or nonconscious prejudice, he and two other investigators ran a computer-based test on more than 200 subjects prior to the 2008 presidential election. Individuals were asked to quickly pair “black” names (Aisha, Jamal, and so forth) and “white” names (Brett, Jane) with good words such as “beauty” and “friendly,” or bad words such as “evil” and “hate.”

Nonconscious prejudice was measured according to how quickly and easily people could identify the “bad” words after seeing African-American names (Aisha, Jamal, and so forth) as opposed to Anglo names (Brett, Jane). Lowery and his coauthors found that fewer errors, when African-American names (as opposed to Anglo names) were paired with a negative word, indicated that individuals had internalized negative associations with black people –– and served as a measure of nonconscious prejudice.

In the month after the election, participants were asked how they had voted. Those who made few errors on the black/bad pairings were nearly 43% less likely to have voted for Obama than those with average scores. “As implicit prejudice increased, the likelihood of voting for Obama decreased,” explains Lowery.

Nearly a year later, in October 2009, some of the same participants rated their attitudes about Obama’s approach to health care reform. Others were randomly assigned to read a description of health care reform framed either as being President Obama’s plan or Bill Clinton’s plan.

Once again, increasing implicit prejudice was associated with negative attitudes toward Obama and decreasing support for his health care policy. Prejudice scores did not correlate with favorability toward the plan when it was described as coming from Clinton, but they did result in a more negative assessment when it was described as coming from Obama.

“This study represents a powerful demonstration of the fact that racial attitudes still operate in the political arena,” says Lowery, who conducted the research with Stanford doctoral student Rebecca Schaumberg and Eric Knowles, assistant professor at the University of California at Irvine. “It also suggests that Obama is likely to encounter some degree of prejudice-fueled opposition to his policies across the board.”

Clearly, the president has his work cut out for him.

Also on Stanford Knowledgebase:

1. Yes I (Gulp) Can: Peter Henry’s Obama Adventure
2. Business Plans Should Begin with User, Work up to CEO
3. Marketing Obama’s Stimulus Package: It Depends

By Margaret Steen

For Stanford’s ambitious MBA students, Myra H. Strober’s Work and Family course can be full of aha moments. They hear, for example, that women who wait to have children may have trouble conceiving, and that child care can take a big chunk out of a manager’s income or eat up the whole income of some workers. Yet the cost of not working can be greater. And even workers without children may face challenges balancing work and family, including care for adult relatives.

For those not currently in business school, it may be surprising that the course exists at all or that the proportion of men enrolled in it has grown to 40%.

“The men are fully engaged here,” said Strober, professor emerita of education with a courtesy appointmented as a professor of economics at the Business School.. Some are motivated by a desire to be a good father; others want to understand workplace barriers that affect their wives, friends, or employees.

Enrollees in the 10-week course are almost exclusively second-year MBA students, whose “thoughts have turned to life after the GSB,” Strober said.

Strober started teaching the course — then titled Women and Work — in 1972, to undergraduates and a handful of female MBA students. Later, she taught it at Stanford’s School of Education. She started teaching the renamed course at the GSB in the early 2000s.

Students write two group papers, one on combining work and family and one on elder care, plus one individual paper on a topic of their choice. Through readings, lectures, class discussions, and talks by guest speakers, students look at the challenges and explore strategies for dealing with them. “A lot of women and men in the class have very, very strong career goals”, Strober said. “They want to be successful at their careers, successful financially, and also have a family.”

One example is Collin R. Hathaway, MBA ’07, founder of Skylight Capital, who was one of the men in the class two years ago. He returned this year, along with his Kellogg MBA wife, as a panelist. “My perfect relationship, if you’d asked me and I’d been really honest, was with a beautiful, smart woman with an MBA who then wants to stop everything and put me first,” he said.
“It sounds cool, but it’s not a fair or reasonable request of someone you care about.”

Hathaway said the class which he counts among the most valuable courses he took at the Business School changed his thinking on balancing his career goals, political aspirations and family life. One idea that was new to him: looking at earnings over the long term, not just in a given year. Because workers who stop out generally earn less later on, dropping out of the workforce to save on child care costs can be costly. (See related story.)

Strober lists other strategies used by high-performing workers — usually women — to make family life more manageable. Some have only one child. Some have “who play a bigger role in the family than most husbands,” she said.

Guest speaker Sandy Takahashi Shirai, MBA ’89, Northern Pacific regional managing director for Deloitte Consulting, talks to the students about the pros and cons of having children later rather than earlier. “If you’re the boss, it’s easier to be flexible, and you have more financial flexibility,” said Shirai, who had her daughter at 40. On the other hand, having children later is physically harder she said.

As Deloitte’s lead partner on the HP-Compaq merger, Shirai said she worked “night and day on the biggest technology merger in history” before and after her daughter was born. Then Michael Capellas moved from Compaq CEO to WorldCom MCI CEO and asked Shirai (and Deloitte to work for him in Virginia. Shirai’s daughter was a baby broken her leg.

“I was very tempted not to do the job,” Shirai said. “On the other hand, I was very dedicated to Michael and his need to have the company emerge from bankruptcy. Thousands of peoples’ jobs depended on it.”

Her husband a dentist couldn’t leave his practice. “I would never ask him to give up something he loves doing,” Shirai said. So he and their daughter stayed near their extended families in California. Later, a colleague asked Shirai what she had done for her husband. Shirai said she had taken him out for dinner. The colleague said, “’No, no, that’s not big enough. You’ve got to get him a boat,’” Shirai recalled. She protested that her husband doesn’t like boats, but she got the point: “I was taking my husband for granted. When other people help you, you need to absolutely make sure you acknowledge it.”

Some workers choose their field with work life balance in mind. Steve Dostart, MBA ’90, president of Dostart Development Co. in Palo Alto, tells students how he decided to go into real estate development after a summer internship in finance.

“I liked the excitement,” of finance, he said. But when he asked one vice president whom he admired how he balanced work and family, the man started laughing. He said he was going to sneak away from a work event that evening to attend his daughter’s sixth birthday party. “I saw him at six o’clock, darting out through the cubicles, putting his head down so no one would see him,” Dostart said. “I decided that’s not going to be me.”

Lindsey Maynard Cooksen, MBA ’09, however, is drawn to finance. An advisor at Morgan Stanley, easier to go back to work after having children if she is doing work she loves. In the class, she learned “there’s no silver bullet to managing a lifestyle with two working parents but if you can make it work it’s beneficial to both your marriage and your children.”

Dostart and his wife, Sharon Meers, also talk about building a marriage based on equal sharing of household work and importance placed on their careers. “It’s a mindset that says dads are equally important to kids, and moms need careers as much as men do,” said Meers, a former managing director at Goldman Sachs and the co-author of the book Getting to 50/50.

Not everyone follows the same model for having children. Sharon Tetlow, MBA ’86, senior vice president and chief financial officer at Cell Genesys Inc. adopted a child as a single mother. Although she continues to work full time at a high level job, she has taken a job closer to home and less demanding than she might have otherwise. “Stepping back in my career is just not something I ever planned to do,” she said. “Talking on a child completely changes your ability to focus on your career.

Some parents find that the demands of parenthood are not compatible with high powered careers and they opt out of the workforce at least for a time. One of the class sessions has a panel of graduates who are current and former stay at home moms and dads.

“We talk a lot about whether or not people have a moral obligation to work and remain in their field given that they’ve taken up a slot at the GSB,” Strober said. If they do, she adds, then do employers have a corresponding obligation to try to make the workplace more accommodating to workers with families?

“The women in the class feel very strongly that they don’t want to be pushed into working,” Strober said. “They don’t want people to tell them that if they need to leave the workplace, they have sinned in some way.”

In recent years, the course has added discussion of elder care, a subject that’s important even to students who don’t plan to have children. “It was really not on many people’s minds that all of a sudden you could have four parents to deal with,” Cooksen said.

Guest speaker Esther Koch, MBA ’79, a gerontologist and elder care advisor, encourages students to think not just about practical issues but about the emotional ones: “How would you like it if your kids come to you and say you can’t drive? How do you want to be treated when you’re older?”

She also emphasizes that “elder care is not child care for the aged.” With children, the needs are usually predictable, revolve around logistics, and decrease over time. “With elders, the needs increases over time, are frequently emergency in nature, and involve more complex and emotional family dynamics,” said Kotch, who is president and founder of Encore Management.

Students in Strober’s course look at all these issues not just from a personal perspective but through the eyes of a manager. What does it mean to be leading a team or company where some workers are juggling family obligations?

Alumnus Hathaway runs a private equity firm that owns and manages a plumbing company. He has lots of employees — mostly women who work in the call center — who have to take time off because their children are sick. “This class made me a little more empathetic about what our employees face,” he said.

A big part of the class is students sharing their own experiences and ideas. When the class is discussing whether it’s a good idea to leave the workforce while your children are young, students whose parents are divorced speak up about their mothers’ struggles to support themselves.

“They are very vocal about telling the other women in the class to keep their skills alive if they drop out of the workplace,” Strober said.

Cooksen said she enjoyed hearing about how her classmates were raised: some by nannies, some by single parents, some by stay-at-home moms. “I think it was very advantageous to see, one, that all of those methods are used and, two, that all of those children turned
out just fine,” she said.

At one evening session, students were invited to bring their significant others. They questioned a panel of three couples, all students or recent MBA graduates: When you’re both job-hunting at the same time and one gets an offer, do you accept it without knowing if your partner will have work in that city? How do you handle your finances: Is money pooled or do you each have separate accounts?

Many of the questions the course raises haven’t changed over the years. “But I think our answers become more and more sophisticated,” Shirai said, as more women reach the top levels of corporate America.

Meers agreed. “What Myra is doing is revolutionary in the best sense. If every university in the country did it, corporate America would be dramatically more productive and save billions in needless turnover.”

Also on Stanford Knowledgebase:

1. The Decision Tree of Family Business
2. Career Shift
3. Help for Alumni in Career Transition

Also on Stanford Knowledgebase:

1. Spurring Innovation
2. Social Innovation: Ask an Expert
3. Stanford Roundtable: Recession Ending, Innovation Needed

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2. QOTD: Hackers Pose Threat to New Technologies

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Prof. Margaret Neale

Getting (More of) What You Want: Strategies to Follow and Pitfalls to Avoid
Date: Dec. 2, 2009
Time: 9-10 a.m. (PST)
Cost: Free

• Register

Presented by: Professor Margaret A. Neale

We all negotiate. Yet many of us think of negotiation as something we do primarily in the context of buying and selling. Yet, in its various forms, negotiation is a much more ubiquitous process used to resolve differences, influence others to take particular actions, and allocate scarce resources. In this webinar, we will integrate recent research that highlights successful strategies as well as strategies that we think might be successful but aren’t (what we know just ain’t so!). Focusing on factors that influence the choice to initiate a negotiation, the characteristics of good deals, and the strategies to achieve those good deals, we will highlight ways in which we can create and claim more value: getting more of what we want from our negotiations.

Also on Stanford Knowledgebase:

1. Free Webinar: Sustainability Matters
2. Campaign to Free Jude Shao Gathers Force
3. Let’s Make a (Better) Deal