Nov 27, 2019

Alibaba Welcome to the History of Computing Podcast, where we explore the history of information technology. Because by understanding the past prepares us to innovate the future! Today we’re going to look at a company called Alibaba. 1964. This was the year that BASIC was written, the year Kleinrock wrote history first paper on package flow and design, the year the iconic IBM System/360 shipped, the year Ken Olson got a patent for the first magnetic core memory, the GPS (then called TRANSIT) went live. But some of the most brilliant minds of the future of computing were born that very same year. Eric Benioff the founder of Salesforce was born then. As was tech writer and editor of Fast Company and PC World Harry McCracken. Obama CTO Megan Smith, a former VP of Google, Alan Emtage of Archie, and Eric Bina an early contributor and coauthor of Netscape and Mosaic. But the Internet stork brought us two notable and ironically distinct people as well. Jeff Bezos of Amazon and Jack Ma of Alibaba. You would need to have been living under a rock for a decade or two in order to not know who Amazon is. But just how much do you know about Alibaba? But Alibaba makes nearly 400 billion dollars per year with assets of nearly a trillion dollars. Amazon has revenues of $230 billion with assets just north of $160 billion. For those of us who do most of our shopping on Amazon and tend to think of them as a behemoth, just think about that. 7 times the assets and way more sales. Alibaba is so big that when Yahoo! got into serious financial trouble, their most valuable asset was shares in Alibaba. If Alibaba is so big why is it that out of 5 Americans I asked, only 1 knew who they were? Because China. Alibaba is the Amazon of China. They have also own most of Lazada, which runs eCommerce operates sites in Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Like Amazon they have supermarkets, streaming services, they lease cloud services, their own online payment platform, instant messaging, a pharmaceutical commerce company, sponsor FIFA, and a couple of years after Bezos bought the Washington Post, Alibaba bought the South China Morning post for a little more than a quarter billion dollars. Oh and you can get almost anything on there, especially if you want counterfeit brands or uranium. OK, so the uranium was a one time thing… Or was it? Oh, and I’m merging a lot of the assets here that are under the Alibaba name. But keep in mind that if you combined Google, eBay, Amazon, and a few others you still wouldn’t have an Alibaba in terms of product coverage, dominance or pure revenue. All while Alibaba maintains less employees than Alphabet (the parent of Google) or Amazon. So how does a company get to the point that they’re just this stupid crazy big? I really don’t know. Ma heard about this weird thing called the internet after he got turned down for more than 30 jobs. One of those was frickin’ KFC. He flew to the US in 1995 and some friends took him on a tour of this weird web thing. There he launched chinapages.com and made just shy of a million bucks in the first few years, building sites for companies based in china. He then went to work for the Chinese government for a couple of years. He started Alibaba with a dozen and a half people in 1999, raising a crapton of money, saying no to sell assets but yes to investments. Especially Yahoo co-founder Jerry Yang, who gave them a billion bucks. And they grew, and they got more and more money, and sales, and really they just all out pwned the Chinese market, slowly becoming the Chinese eBay, the Chinese Amazon, the Chinese google, the Chinese, well, you get the picture. They even have their own Linux distro called AliOS. They own part of Lyft, part of the Chinese soccer team, and are a sponsor of the Olympic Games. Maybe he buys companies using AliGenie, the Alibaba home automation solution that resembles personal assistants built into Amazon Echo and Apple’s Siri. Ma supposedly has ties to Chinese President Xi Jinping that go way back. Apple makes less money than Alibaba but their CEO gets to go hang at the White House whenever he wants. Not that he wants to do so very often… Bezos might be richer, but he doesn’t get to hang at the White House often. Makes you wonder if there’s more there, like… Nevermind. Back to the story. When Ma bought the South China Morning Post the term “firmly discouraged” was used in multiple outlets to describe other potential bidders. Financial reports have described the same from other acquisitions. Through innovation, copy-catting, and a sprinkle of intimidation, Alibaba became a powerhouse, going public in 2014, in an IPO the raised over $25 billion dollars and made Alibaba the most valuable tech firm in the universe. Oh, Ma acts and sings. He rocked a little kung fu in 2017’s Gong Shou Dao. It was super-weird. He was really powerful in that movie. Strong arming goes a lot of different ways though. Ma was reportedly pressured to step down in late 2018, hading the company to Daniel Zhang. I guess he got a little too powerful, supposedly bribing officials in a one-party state and engaging in wonktastic account practices. He owns some vineyards, is only in his mid-50s and has plenty of time on his hands now to enjoy the grapefruits of his labor. This story is pretty fantastic. He was an English teacher in 1999. And he rose to become the richest man in China. That doesn’t happen by luck. Capitalism at its best. And this modern industrialist rose to become the 21st richest person in the world in one of the most unlikely of places. Or was it? He doesn’t write code. He didn’t have a computer until his 30s. He’s never actually sold anything to customers. Communism is beautiful. And so are you. Thank you dear listeners, for your contributions to the world in whatever way they may be. They probably haven’t put you on the Forbes list. But I hope that tuning in helps you find ways to get there. We’re so lucky to have you, have a great day!